The sky rocketing real estate prices in urbanised Japan belies the fact that rural areas have cheaper rates and in fact the industry has been facing a slump since the last two years. Rules on selling foreigners forestland with water rights attached has attracted a good amount of foreign investment, more so because of the water proposition.
Countries like India and China have a foreseeable shortage of water, which is why it’s not surprising to learn that many Chinese investors have bought land in Japan. This is of course majorly invested in areas where groundwater is abundant. People like Morihiro Oguma, owner of Japan Mineral, get bids for their water-bottling plant on a daily basis.
Japan is the only country in the Asia-Pacific region that doesn’t regulate property investment by foreigners. Land can be bought for just 60¢ a square meter, including the groundwater beneath. This however raised concerns in the Hokkaido region where a lot of the investments are based. Statistics show that the land owned by non-Japanese investors is about 37 sq. km; almost a third of the foreigner-owned land is on Hokkaido. China leads the purchases of Hokkaido forest and water rights and accounts for 21 transactions out of a total of 57. It doesn’t take a genius to figure out that the investors are hoping to cash in on the water reserves when the time is right. Some are already bottling the water and exporting it back to China.[via BusinessWeek]