The Japanese property market is heating up as global buyers show increasing interest in prime areas of Tokyo, the world’s largest metropolitan area. Through May, the number of existing condominiums sold in Tokyo increased by 5.4% to 16,152 units year-on-year, while existing detached house sales rose by 14.3% on an annual basis to 8,224 units, according to the Land Institute of Japan (LIJ). In 2015, land prices in Japan rose for the first time in eight years.

The residential market in Japan is of particular interest to Taiwanese buyers, analysts say. Given the soaring costs of property in Taipei, poor rental yields, and the historic close ties between Taiwan and Japan, Taiwanese are among the most active foreign buyers in Japan’s property market. In an October 2014 report, the English-language Nikkei Asian Review noted that Taiwanese investors comprise more than 70% of property agency Tokyu Liveable’s transactions with foreign clients.

“Japanese residential real estate offers Taiwanese much more for their money than anything at home, from the initial cost of the property to yields and even the quality of the units, observes Luke Lee, vice president of the Taipei office of Joy Life, a Tokyo-based property agency with a large Taiwanese client base. “Japan is also seen as a safe and stable country with the rule of law, making it ideal for a second home or purely for an investment.”

According to the Global Property Guide, yields in Tokyo’s central districts range from 3.4% to 5.4%. By contrast, yields in Taipei often fail to reach 2%.

Borrowing terms are attractive, too. Taiwanese borrowers can typically apply for 15-year mortgages with interest rates of 2.5-2.7%, Lee notes. The six banks offering services to Taiwanese borrowers include the Japan branches of First Commercial Bank, Chinatrust Commercial Bank, Chang Hwa Commercial Bank, Bank of Taiwan, and Mega International Commercial Bank, as well as Japan’s Tokyo Star Bank.

Taiwanese began buying Japanese property in earnest in 2013, Lee observes. Since then, Joy Life’s business has steadily increased. Lee credits Japanese Prime Minister’s “Abenomics” economic policy for boosting investor interest in the Japanese property market. Abenomics refers to Abe’s pledge to end deflation and stimulate the economy with quantitative easing, higher public infrastructure spending, and devaluation of the yen.

A number of Taiwanese property realtors, including Taiwan Realty and Sinyi Realty, have opened Tokyo offices since Abe took office, seeking to take advantage of the rising appetite among Taiwanese for Japanese real estate. Last year Sinyi Realty added three more offices, bringing the total number of its Japan offices to eight. It also doubled its broker staff from 20 to 40 to meet rising demand.

Lee says that syueki bukken, the Japanese term for property purchased for investment purposes, offers the best potential for Taiwanese buyers. Typically one building contains 4 to 10 studio units. “Syueki bukken provides the land as well as the building,” he explains. “There’s more potential for the property to appreciate than if you buy a condo, which doesn’t include any land.”

At the same time, syueki bukken is more likely to attract a local tenant – and thus has a much wider range of potential tenants –  than a condo, notes Lee, who has lived in Tokyo for 11 years and is currently in Taipei to launch Joy Life’s local office. “Japanese people can buy a condo with a 35-year loan with a low interest rate. They aren’t likely to rent one for 250,000 yen monthly. Foreigners who don’t plan to stay in Japan long term are the ones who generally rent condos.”

It is questionable how long Japanese property will remain a bargain. In a February report, researchers at property consultancy Jones Lang LaSalle (JLL) noted that the 2020 Tokyo Olympics are likely to push prices up, pointing to previous Olympic host cities as evidence of that assertion. Property prices in Beijing rose 20% prior to the games while those in Athens surged 75%. JLL expects real-estate prices in Japan to increase 20% to 30% between 2016 and 2020.

Buyers from mainland China, who in recent years have contributed to surging property prices in Hong Kong and Vancouver, are another key factor. Juwai Data, a research firm that tracks overseas purchases by Chinese buyers, reported in July that Chinese buyer inquiries for Japanese properties on Juwai.com increased 191% on an annual basis in 2015.

Like their Taiwanese counterparts, Chinese buyers see Japanese property as a safe bet and good value. Juwai notes that yields in mainland China are just 2.6%, which is not much better than those in Taiwan.