TOKYO • A Chinese investor has paid the highest price for a newly built Tokyo house in more than a decade as residential property values in Japan's capital accelerate.
The unidentified person bought two adjacent houses for about 690 million yen (S$8 million) and 680 million yen each in August, said Mr Mitsuo Hashimoto, the president of Housing Japan, which developed and sold them.
That is the most expensive price for a new house in Tokyo since at least 2004, according to data from the Tokyo-based Real Estate Economic Institute.
Residential property prices in Tokyo's 23 wards gained 2.1 per cent in the year to July 1, accelerating from a gain of 1.9 per cent a year earlier, according to a Land Ministry report in September.
Land prices for homes in Tokyo are still less than 60 per cent what they were during Japan's property bubble in the late 1980s.
With wealthy Chinese snapping up luxury homes from Sydney to Vancouver, real estate agencies have also been bringing property buyers to Japan as the Japanese yen has declined against the Chinese currency.
There are very few Western- style luxury houses in Tokyo for sale at 500 million yen or more, said Mr Hashimoto on Tuesday.
"If you compare Tokyo to the world's other major capitals, ownership of property by foreigners in the Japanese capital is tiny," said Mr Hashimoto.
The recent downturn in China's stocks is prompting wealthy mainland investors to put money into less volatile property assets, he added.
Unlike in many Asian nations, home owners in Japan can also gain title to the land that accounts for about 70 per cent of the value, he said. About 30 people viewed the two properties, with the final buyer among three bidders.
"The number of wealthy Chinese is rising and Japan is near China, so we will probably see more purchases," said Mr Masahiro Mochizuki, a Tokyo-based real estate analyst at Credit Suisse Group.
Overseas buyers purchase only about 5 per cent of new homes in Tokyo's central wards, and they are mainly apartments, he said.
The two three-storey houses are a five-minute walk from the Canadian Embassy in Akasaka, which is home to the embassies of many countries, including the US. Each of the two houses has a floor area of about 390 sq m.
The homes, which have a grey exterior, sit on top of a hill where there are older residential apartments. Both have a roof terrace area. In one of the properties, it is possible to lower a car to the basement level for display in an area adjacent to a theatre room and wine cellar, according to marketing material from Housing Japan.
The developer completed the properties in February on land that previously housed a dormitory of Tokyo Electric Power, according to Mr Hashimoto.
Visitors from mainland China to Japan more than doubled to 3.35 million in the first eight months of the year from the same period a year earlier, making them the single largest group, according to data from the Japan Tourism Agency.
An additional 2.47 million visitors came from Taiwan and 991,800 from Hong Kong.