Notices on properties up for sale are seen on a window of a real estate agency in Tokyo in this undated image. Captured from Google Street View

More wealthy Koreans are on a real estate buying spree in Japan, as these properties are more affordable and lucrative compared to those in Korea, real estate industry officials said Tuesday.

The persistently weak yen has been attracting Korean buyers, who either take out cash from Korea or apply for loans from Japanese banks, they said. Korean investors are expected to go shopping for real estate in Japan for a while, as the exchange value of 100 yen is still lower than the yearslong norm of 1,000 won despite the Japanese central bank's recent shift to a rate hike policy.

In Korea, a housing bubble that has shown no sign of letting up, along with strict regulations, is seemingly driving buyers away from the domestic market to the Japanese market.

“Buyers possibly do not want to miss an opportunity of owning properties in Japan for affordability and profitability reasons,” Kwon Dae-jung, a real estate professor at Sogang University, said.

The professor was referring to data concerning Korean nationals' purchase of properties overseas, which was compiled by the Ministry of Economy and Finance and submitted to the National Assembly.

Buidlings are seen from Tokyo Tower in this undated photo. Korea Times file

Data showed that Korean nationals remitted a total of $39.2 million to Japan in property payments there in 2024, which nearly tripled from $13.1 million in 2023.

In particular, the remittance to Japan last year accounted for 9.4 percent of the entire amount sent abroad for real estate purchases the same year. The figure was the highest in the past seven years, according to the finance ministry.

Kwon said the actual amount spent by Korean buyers in Japan in 2024 is about twice larger than the aforementioned $39.2 million, considering they generally finance about 50 percent of the cash they need through loans from Japanese banks.

Another real estate expert said on condition of anonymity that demand for Japanese properties is likely to go on as buyers can find more profitable assets for more affordable prices than the ones in Seoul.

“For instance, buying an apartment in a neighborhood where public transportation, shopping malls and hospitals are easily accessible requires more than 1 billion won ($689,000) in Seoul,” he said.

“But it is surprisingly not the case in Japan,” he said, noting multiple Korean individuals have bought such units for less than 1 billion won in Tokyo and other metropolitan areas.

Kim Woong, the head of Hana Bank's Estate Investment Center, also said that, for wealthy Koreans, the value of the yen is still low against the won and as such, “weak Japanese currency will sustain real estate shopping in Japan.”

Kim noted that 100 yen has been traded in the upper 900 won range in recent months after being traded in the 800 won range. The yen's value is in line with the Japanese central bank's base rate, which marks a 17-year high of 0.5 percent.

Kim Je-kyung, a chief consultant at real estate agency Tumi, noted that regulations and the housing bubble are “prompting Koreans to search for overseas properties.”

Kim noted that wealthy Koreans are buying properties for investment purposes, and that they complain over “excessive and even punitive taxes” for owning multiple homes in Korea.

Meanwhile, market observers said Korean buyers should be aware of the risks associated with properties in Japan.

These risks include distance, which restricts owners from inspecting and managing their properties when necessary. Capital gains tax might also be high for those who own real estate for a short term, as Japan imposes around 40 percent tax for those who sell their respective properties within five years of ownership.