The yen’s accelerated depreciation – fuelled by the election victory of Sanae Takaichi as head of the ruling Liberal Democratic Party ( LDP ), which sets the stage for her to become Japan’s first woman prime minister – opens up a double-sided opportunity for Hong Kong ultra-high-net-worth ( UHNW ) investors to profit from Japan’s real estate.

On one hand, the yen’s weakness, resulting from the stock market surge following Takaichi’s surprise win on the strength of her dovish “neo-Abenomics” stance, makes Japanese assets, particularly real estate, more attractive to foreign investors with stronger currencies, particularly the HK dollar and the greenback.

On the other hand, Takaichi’s election is seen as paving the way for the approval and implementation of current legislative proposals to restrict foreign property ownership, particularly amid concerns over speculative buying, which is driving up prices in urban luxury markets.

There is an observable trend among Japanese property agents and real estate firms to urge foreign UHNW and institutional investors to “buy now” in the luxury and prime segments, intensified by the yen's post-election plunge ( USD/JPY hitting 150+ on October 6-7 ) following Takaichi's win on October 4, according to Toshihiko Yamamoto, founder and CEO of Yamamoto Property Advisory, a Tokyo-based firm specializing in UHNW foreign real estate investments.

This trend is consistent with the currency’s weakness, making Tokyo real estate assets 1%-2% cheaper overnight for HKD/USD holders, as a “bargain window” opens before a potential regulatory tightening under Takaichi's administration

Balancing act

Even before the LDP election, property agents had been pitching this line, citing policy risks like foreign ownership curbs, which Takaichi has advocated.

Yamamoto’s report, Inside Tokyo’s Billionaire Real Estate Market: Trends and Opportunities for 2025, published on April 22, synthesizes data from local real estate trackers and UHNW investor surveys, emphasizing how these factors create a compelling “buy now” environment for foreign capital.

However, other analysts say that although Takaichi’s leadership is likely to accelerate these proposals, given the LDP consensus and her personal advocacy, the implementation will likely balance security with tourism/economic goals.

For UHNWIs, this means navigating a more regulated but still open market, potentially favouring established players over new speculators.

Enhanced purchasing power

No outright bans on foreign ownership are expected, as Japan values foreign capital, according to Ziv Nakajima-Magen, partner and executive manager, Asia-Pacific Nippon Tradings International ( NTI ), in his report, Japan's Real Estate Market 2024-2025: Trends, Challenges, and Opportunities, published on February 19 by Plaza Homes, a Tokyo-based real estate company.

At the current exchange rate of about 18.955 yen per 1 HKD, UHNWIs holding HKD, or other strong currencies like USD, enjoy significantly enhanced purchasing power in Japan.

The HKD/JPY mid-market rate ( the rate that banks use to buy from each other ) moved into the 19.0-19.6 range in early October. That kind of move materially improves the purchasing power of HKD and USD holders, though retail bank and money-changer quotes are typically weaker by some basis points than the mid-market rate once spreads and fees are included.

As of October 8, Japan's UHNW population stands at around 16,500 individuals ( with 6,500 in Tokyo ), but inbound foreign capital is surging, driven by safe-haven appeal, economic reforms, and a booming M&A landscape.

The key opportunities in Japanese real estate available to UNHW investors, typically those with a net worth of over US$30 million, focus on high-yield, legacy-building strategies, as these leverage the yen’s 1.44% YTD depreciation against HKD, potentially amplifying returns by 3–5% on entry costs alone.

The weak yen is boosting foreign demand in Tokyo’s ultra-luxury property market, where limited supply and rising prices create a “buy now” window for wealth preservation.

Supply shortage

There is also a shortage of supply as no major ultra-luxury completions are scheduled to come to market until 2030. Land scarcity and construction inflation are also pushing prices towards 50-60 million yen per tsubo ( a traditional unit of area ), roughly equal to 3.3 square metres ( 15-18 million yen per square metre ) by decade-end, aligning Tokyo with London or New York benchmarks.

Target legacy residences start at 1 billion yen ( HK$52.8 million ) in prestige areas like Aoyama, Azabu, and Roppongi. Standouts include Aman Residences ( ultra-privacy ), Toranomon Hills ( 8.8 million yen/sq m in resale ), and MARQ Omotesando ONE ( 9.9 million yen/sq m ). For diversification, commercial plays in hospitality-linked retail market ( e.g., Omotesando boutiques ) offer 4-6% yields after 37 million inbound tourists were recorded in 2024, according to data from Savills and JLL.

For UNHWIs, the yen’s continuing weakness enhances affordability ( e.g., a 1 billion yen property costs HK$52.8 million, compared to HK$54 million at stronger rates ), with tax-efficient structures via family offices. This is expected to generate a projected 10-15% appreciation by 2027, plus rental yields from short-term lets to tourists, according to analyst forecasts.

In terms of risk, over the next short-term ( 6-12 months ), analysts say there is “medium risk” due to election-driven policy flux, but the yen dip is creating a “buy now” window before potential rules tightening in 2026.  Over the long term ( 3-5 years ), there is “low to medium risk” as Tokyo's scarcity ( no major luxury builds until 2030 ) and global UHNW inflows support a 10-15% appreciation.