New property purchase disclosure rule in Japan sparks fears it may curb foreign investment
Tokyo’s implementation of a rule that requires all property buyers to declare their nationality is raising concerns among investors, according to analysts. Japan’s shift from an ultra-loose monetary policy to gradual normalisation of its interest rates was also likely to force investors to reconsider whether real estate assets were still attractive, they added. “Japan has had a really strong run…
Japan's new rule requiring all property buyers to disclose their nationality has raised concerns among investors, according to analysts. The shift from ultra-loose monetary policy to gradual normalization of interest rates may force investors to reconsider the attractiveness of real estate assets. Neil Brookes, head of Asia-Pacific capital markets at property consultancy Savills, noted that Japan has seen strong growth over the past seven or eight years, but higher interest rates have led to less demand.
The world's fourth-largest economy attracted $27.2 billion in property investment in the first half of the year, ranking second in Asia-Pacific, but transaction volume was 7% lower than in the same period in 2025. The Bank of Japan's recent interest rate increase of a quarter-point to a 31-year high of 1.25% has raised financing costs, particularly for highly leveraged property investors, potentially dampening demand for speculative transactions.
Yasuyuki Nozawa, president and CEO of Tokyo-based LogProstyle, said international customers are an important target market, especially for renovated residential properties. While foreign nationals bought only 0.7% of large-scale land deals in Japan in the six months to December 2025, with Chinese individuals and businesses being the most frequent investors, the new rule requiring nationality disclosure may still deter some investors.
However, Asia Bankers Club founder and CEO Kingston Lai believes the rule is unlikely to dissuade clients, as both Japanese nationals and foreign holders must declare nationality when registering new property ownership or transferring property. Lai added that the rule could signal potential tougher measures like those in Singapore or Canada, such as punitive levies on residential transactions by foreign buyers or bans on home purchases for most foreigners.
Despite these concerns, LogProstyle's Nozawa emphasized that Japan still welcomes legitimate international investment and remains an important contributor to the economy through foreign investment and inbound tourism.
Written by urgent.news from SCMP Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
