Japan's real estate market may be in a slump, but that is not deterring the Chinese from scooping up properties.

Chinese money - that is, from ethnic Chinese living in Japan - is making its presence felt in a big way, according to a Japanese newspaper yesterday.

Businessman Tsuyoshi Tsuyusaki is typical of this new breed of customers.

Hailing from China, Mr Tsuyusaki arrived in Japan from Beijing in 1987 and obtained Japanese nationality in 1996, hence his Japanese name.

He buys properties cheaply, mainly at court-ordered auctions following foreclosure, the Asahi Shimbun daily reported.

Amid the sounds of electric drills reverberating on the slope of a hill, with snow-covered Mount Fuji in the background, Mr Tsuyusaki cannot hide his pride at a six-storey building in Yamanashi Prefecture where renovation will soon be completed.

The resort hotel has a total floor space of 12,000 sq m. 'There will be 150 rooms in total,' he said.

The company that had originally been developing the building went bankrupt, with the collapse of the asset-inflated economy in 1992. Construction work, which had already eaten up nearly four billion yen (S$63.2 million), was suspended.

In 2008, Mr Tsuyusaki picked up the property for a song: 200 million yen.

Mr Tsuyusaki, who used to run a milk delivery business, started buying real estate in 2001 and has purchased more than 10 buildings, the Asahi said.

The real estate market in Japan became sluggish due to an investment boom that started around 2000 and resulted in an excessive supply of properties. The situation was exacerbated by the global financial crisis that flared in the fall of 2008.

The influx of Chinese interest has prompted real estate companies and banks to pay closer attention to the purchasing power of Chinese residing in Japan.

'If you want to achieve better business performance, the best thing to do is to target them,' said Mr Zhang Gan, director of the business promotion division of HSBC Premier.

Amid Japan's current recession and deflation, a growing number of Chinese residents are turning to real estate investments in major cities as well as rural areas, Asahi said, but the paper did not provide any figures.

This has coincided with falling demand among Japanese for upscale accommodation, market watchers told Asahi.

The current market condition also provides an attractive opportunity for Chinese to own their own homes.

'For people, like us, who have lived in Japan for five to 10 years, our main interest now is real estate,' said a 46-year-old company president who declined to be named. He organised a seminar on Japanese real estate prospects last October in Tokyo for Chinese from the coastal province of Zhejiang.

'We have sufficient savings. With the fall in property prices, our enthusiasm for owning our own homes in Japan has grown,' he said.

This article was first published in The Straits Times.