Tsushima Island for Korea?

“Buy a Piece of Beautiful Tsushima Island.”

Stepping into a fishing village near Aso National Park in the town of Toyotama on Japan’s Tsushima Island on March 3, a large billboard with Korean writing came into my sight. It was a real estate advertisement telling Koreans that they could buy land and buildings on Tsushima, as well as offering the information that the minimum transaction amount was 20 million won.

To the question, “Has any Korean really bought real estate here?” a local resident pointed to a villa that had just finished remodeling. “Koreans own three or four villas here,” he said, “and quite a lot of the residents are negotiating with Koreans at the moment.”

Belonging to Japan but lying closer to Korea’s Busan than the Japanese mainland, Tsushima is seeing a wave of real estate investment from Korea. Its real estate investment and tourism began to show signs of picking up in 2004 and began to grow rapidly starting last year, when Japan temporarily extended short-term visa waivers to Korean tourists. In 2005, a total of 36,000 Korean travelers visited Tsushima, a dramatic increase from 20,000 the previous year.

“Korean tourists are nearly doubling in number every year,” said executive Baek Suk-gi of Dae-a Express Shipping, which has been exclusively operating ships between Busan and Tsushima Island since 1999. “Last year, tourists from Seoul and Gyeonggi Province also grew more than 15 percent.”

More than 90 percent of the total tourists in Tsushima are from Korea, and a growing number of Korean investors intend to build facilities catering to Korean tourists. In the island’s Izuhara town, one Korean-owned tourist hotel and three guesthouses run by Korean travel agencies all opened for business in 2005.

“Last year, I successfully conducted six cases of Koreans buying property,” said real estate agent Masaharu Nishiyama. “Korean companies talking real estate business with me number about 200.”

Koreans are mostly investing in holiday villas, accommodations, golf resorts and other such tourist facilities, but local real estate agents say some are making a speculation on the property, predicting that Tsushima will grow into a famous tourist destination in five or six years, driving up the prices of land.

They believe that although Tsushima’s land prices, which were around one million won per pyeong (3.306m²) a decade ago, plummeted to 100,000 won per pyeong due to an economic recession, it is still worth investing in since the number of tourists continues to grow.

Kim Kyung-nam, owner of Ocean Bay Tours, built a guesthouse on 100 pyeong of land near Aso Bay. “Tsushima Island is in another country, but is close to Korea, and the land is cheaper compared to Jeju Island,” he said.

The local government of Tsushima is devoting its heart and soul to attracting foreign investment in order to revitalize its economy.

Nagasaki Prefecture, which governs the island, adopted a “Tsushima Special Zone” bill in 2004 easing land use and purchase regulations, and allowing foreigners to buy real estate if they show identification cards. The island’s authorities also give tax exemption benefits to foreign businesses.

As Korean investment grows along with the number of Korean tourists, the Korean Wave is rising even higher on the island. Most restaurants and bars are equipped with signboards and menus in Korean, and all road signs will be written in Korean as well as Japanese within this year.

Tsushima now has Korean program-only TV channels, and the city has begun Korean language classes for the public. Most of the island’s public officials as well as workers in restaurants and bars can speak some simple Korean already.

weappon@donga.com