Authored by the expert who managed and guided the team behind the Japan Property Pack
Everything you need to know before buying real estate is included in our Japan Property Pack
Nagoya's rental market offers investors average gross yields between 3.5% and 4.7% as of September 2025, with significant variations depending on property type and location. Central condos typically deliver lower yields around 3.5-4.1%, while suburban houses and older apartments can reach up to 4.7%.
The Nagoya residential property market presents a compelling opportunity for investors seeking higher yields than Tokyo while maintaining stability. Central districts command premium prices but offer steady tenant demand, while suburban areas provide better percentage returns with slightly higher vacancy risks.
If you want to go deeper, you can check our pack of documents related to the real estate market in Japan, based on reliable facts and data, not opinions or rumors.
Nagoya rental yields range from 3.5% to 4.7% depending on property type and location, with central condos at the lower end and suburban properties at the higher end.
Net yields after mortgage payments, taxes, and fees typically fall to 2-3% for leveraged investors, while long-term leases generally outperform short-term rentals like Airbnb.
| Property Type | Average Gross Yield | Monthly Rent Range |
|---|---|---|
| Central Condos (New) | 3.5-4.1% | ¥60,000-¥90,000 |
| Suburban Houses | 4.2-4.7% | ¥80,000-¥120,000 |
| Studio/1K Units | 4.0-5.0% | ¥50,000-¥80,000 |
| Family Units (2-3LDK) | 3.3-4.0% | ¥80,000-¥200,000 |
| Short-term Rentals | 2.0-2.5% | Variable |
What are the current average rental yields in Nagoya across different property types?
Nagoya's rental market delivers average gross yields between 3.5% and 4.7% as of September 2025, with clear variations based on property type and age.
Central condos, particularly newer buildings near Nagoya Station and Sakae districts, typically generate yields of 3.5% to 4.1%. These properties command higher purchase prices but offer stable tenant demand from young professionals and expatriates working in the central business district.
Suburban houses and older apartment buildings push yields upward to the 4.2-4.7% range. These properties benefit from lower acquisition costs while still attracting steady rental demand from families and students attending nearby universities.
Studio and single-room apartments consistently deliver the highest percentage yields, often reaching 4% to 5% for older units or those strategically located near universities. The strong demand from singles and students keeps these smaller units well-occupied throughout the year.
It's something we develop in our Japan property pack.
How do rental yields vary between central districts and suburban areas of Nagoya?
Central Nagoya districts consistently deliver lower yields but higher rental stability compared to suburban areas.
The central business districts around Nagoya Station and Sakae area generate average yields of 3.5% to 4.1% for modern condominiums. These prime locations command purchase prices of ¥365,000 to ¥500,000 per square meter, which compresses yield percentages despite strong rental demand.
Suburban areas across Nagoya's outer districts can achieve yields reaching 4.7%, particularly for older properties or houses. The lower acquisition costs in these areas significantly improve percentage returns, though investors should factor in potentially longer vacancy periods between tenants.
Mid-tier residential areas between the city center and suburbs typically fall in the 4.0% to 4.5% yield range, offering a balanced approach between accessibility and returns. These neighborhoods often attract families and working professionals who prioritize value over central location convenience.
What's the typical rental yield difference between small units and larger family properties?
Studio and single-room units significantly outperform larger family properties in terms of percentage yields across Nagoya's rental market.
Studios and 1K/1R apartments deliver yields of 4% to 5%, with some older units near universities achieving even higher returns. These compact properties benefit from lower purchase prices, typically starting from ¥10 million in outer areas, combined with strong demand from students and young singles.
Larger family-sized units ranging from 2LDK to 3LDK+ generate more modest yields of 3.3% to 4.0%. While these properties command higher absolute rental amounts of ¥80,000 to ¥200,000 monthly, their significantly higher purchase prices reduce percentage returns.
The yield advantage of smaller units stems from their broader tenant appeal and faster turnover rates. Single professionals, students, and young couples represent the largest rental demographic in Nagoya, creating consistent demand for compact, affordable accommodations.
Larger units also experience longer vacancy periods between tenants, as families typically take more time to decide on rentals and have more specific location requirements related to schools and family amenities.
What is the average purchase price per square meter and how do fees affect total costs?
Central Nagoya condominiums cost between ¥365,000 and ¥500,000 per square meter as of September 2025, with additional acquisition fees adding approximately 5-7% to the total investment.
| Cost Component | Amount/Percentage | Notes |
|---|---|---|
| Agent Fee | 3.24% + ¥64,800 | Standard real estate commission |
| Stamp Tax | ¥10,000-¥30,000 | Depends on property value |
| Annual Property Tax | 1.4% of assessed value | Ongoing annual cost |
| Monthly Maintenance | ¥20,000-¥42,000 | Condo buildings only |
| City Planning Tax | Variable | Additional municipal tax |
New condominiums in central areas typically range from ¥40 million to ¥60 million for 70-80 square meter units. Starter properties in outer areas begin around ¥10 million for older or smaller units, making entry-level investment more accessible.
Monthly maintenance fees for condominium buildings represent a significant ongoing expense, potentially reaching ¥42,000 per month for premium buildings with extensive amenities. These fees directly impact net yields and should be factored into all cash flow calculations.
Foreign investors should budget an additional 6-8% above the purchase price for transaction costs, legal fees, and initial setup expenses when calculating total investment requirements.
How much does a typical mortgage payment reduce net rental yield for investors?
Mortgage financing substantially reduces net yields from gross returns of 3.5-4.7% down to approximately 2-3% after debt service and related costs.
Current mortgage rates in Japan range from 0.7% to 3.69% depending on the loan type and borrower profile. Flat 35 fixed-rate loans reach maximum rates of 3.69%, while variable-rate products start as low as 0.7-0.95% for qualified borrowers with strong credit profiles.
Most lenders require down payments of 20% to 50% for investment properties, limiting leverage potential compared to owner-occupied purchases. A typical investor borrowing at 2.5-3.5% interest with 30% down payment will see debt service consume approximately 40-60% of gross rental income.
After accounting for mortgage payments, property taxes at 1.4% annually, maintenance fees, and vacancy allowances, leveraged investors typically achieve net yields of 2-3%. This calculation assumes conservative vacancy rates and normal maintenance expenses.
Cash investors avoid debt service costs but must factor in opportunity costs of capital deployment, making the yield comparison between leveraged and cash purchases more complex than simple percentage calculations suggest.
Don't lose money on your property in Nagoya
100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
What are the average monthly rents for different property types and sizes in Nagoya?
Nagoya rental rates vary significantly by property size and location, with central areas commanding premium pricing over suburban alternatives.
Studio and 1K apartments rent for ¥50,000 to ¥60,000 citywide, increasing to ¥60,000-¥80,000 in central districts near major stations. These compact units represent the most liquid rental segment with consistent demand from students and young professionals.
Mid-size apartments including 1DK and 1LDK units typically rent for ¥60,000-¥70,000 and ¥70,000-¥90,000 respectively. These properties attract single professionals and young couples prioritizing modern amenities and convenient locations.
Family-sized properties ranging from 2DK to 3LDK+ command monthly rents of ¥80,000 to ¥200,000+, with significant variation based on age, location, and building quality. Suburban family units often rent for ¥10,000-¥20,000 less than comparable central properties.
Premium family properties in desirable school districts or near international facilities can exceed ¥200,000 monthly, particularly when targeting expatriate families working for multinational corporations in Nagoya's industrial sector.
What kind of tenant profiles are most common in Nagoya and how does this affect rental demand?
Nagoya's rental market serves four primary tenant categories, each driving demand for specific property types and locations.
Students represent a major tenant segment, particularly around Nagoya University and other educational institutions. These tenants consistently seek affordable studio and 1K apartments within cycling distance of campuses, creating steady demand for smaller units in specific neighborhoods.
Young professionals working in Nagoya's central business district favor modern 1LDK and 2LDK apartments near major train stations. These tenants prioritize convenience and modern amenities over space, supporting premium rents for well-located smaller units.
Families with children drive demand for larger 2LDK to 3LDK+ properties in suburban residential areas. These tenants prioritize proximity to quality schools, parks, and family amenities over central location access, creating distinct market segments.
Expatriate professionals, often working for automotive and manufacturing companies, seek premium properties with international-standard amenities. This segment supports higher rents for quality properties but represents a smaller overall market compared to domestic tenants.
The demographic mix heavily favors smaller units, as singles and young couples significantly outnumber families in Nagoya's rental market, explaining the yield advantages of studio and 1-bedroom properties.
What are the current vacancy rates by area and property type and how do they impact returns?
Nagoya's residential vacancy rates average 10-13% across the greater metropolitan area as of September 2025, significantly higher than commercial properties but varying substantially by location and property type.
Central Nagoya districts maintain vacancy rates below 10% for well-maintained properties, benefiting from consistent demand from professionals and students. Prime locations near Nagoya Station and major employment centers experience the lowest vacancy periods.
Suburban areas face higher vacancy rates, often exceeding the metropolitan average due to oversupply and demographic shifts toward urban living. These elevated vacancy rates partially offset the higher gross yields available in outlying areas.
Larger family units experience longer vacancy periods between tenants compared to studios and 1-bedroom apartments. Families typically require more time for housing decisions and have more specific location requirements, extending average vacancy duration.
The 10-13% vacancy rate significantly impacts cash flow projections, requiring investors to budget for 1-2 months of lost rental income annually. Conservative investors should calculate returns assuming vacancy rates at the higher end of this range to ensure adequate cash reserves.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Japan versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What is the rental yield comparison between short-term rentals and long-term leases in Nagoya?
Long-term leases significantly outperform short-term rentals in Nagoya's current regulatory and market environment.
Airbnb and similar short-term rentals typically generate net annual returns of 2.0% to 2.5% after accounting for operating costs and regulatory restrictions. Japan's 180-day annual operation limit for short-term rentals severely constrains revenue potential compared to year-round traditional leasing.
Long-term leases deliver gross yields of 3.5% to 4.1% for comparable properties, with net yields of 2.8% to 3.5% after standard expenses. The regulatory stability and predictable cash flow of traditional leasing creates more reliable investment returns.
Short-term rental operations incur additional costs including cleaning services, utilities, guest management, and higher vacancy risks during off-peak periods. These expenses often consume 30-50% of gross short-term rental income.
Market demand for short-term accommodations in Nagoya remains limited compared to major tourist destinations like Tokyo and Kyoto, reducing occupancy rates and pricing power for Airbnb operators.
Most successful investors in Nagoya focus on traditional long-term leasing strategies, reserving short-term rental approaches for premium properties in highly touristic areas with demonstrated demand patterns.
How have average rents and yields changed compared to five years ago and last year?
Nagoya's rental yields have compressed moderately over the past five years while property prices and rents have grown steadily above national averages.
Rental yields declined from approximately 4.2% in 2020 to the current range of 3.5-4.1% in 2025, primarily due to property price appreciation outpacing rental growth. This yield compression reflects increased investor interest in Nagoya's stable market fundamentals.
Property prices and rents have increased by 2.8% to 3.5% annually over the five-year period, significantly outperforming Japan's national averages. This growth reflects Nagoya's economic stability and continued population retention compared to other regional cities.
Year-over-year changes show stable but slightly declining yields as property prices continue rising faster than rental rates. The 2024-2025 period maintained this trend with modest price appreciation and steady rental demand.
The yield compression trend reflects market maturation as more investors recognize Nagoya's advantages over higher-priced Tokyo markets, increasing competition for quality investment properties.
It's something we develop in our Japan property pack.
What are the projected rental yields and price trends for the next one, five, and ten years?
Nagoya's rental market outlook suggests continued stability with gradual yield compression as the city attracts more investment capital.
The 2026 one-year outlook anticipates stable market conditions with yields potentially softening slightly due to continued price appreciation. Rental growth is expected to remain steady but modest, maintaining current supply-demand balance.
Five-year projections through 2030 forecast continued moderate price growth of 2-3% annually with modest rental increases following similar patterns. This scenario would result in gradual yield compression but maintained market stability for long-term investors.
Ten-year forecasts through 2035 depend heavily on demographic trends and urban development projects. Current projections suggest continued modest growth with potential regulatory changes affecting investment returns, particularly regarding foreign ownership and taxation.
Infrastructure improvements and urban renewal projects could positively impact specific districts, creating localized appreciation opportunities above market averages. Investors should monitor municipal development plans for emerging growth areas.
The overall trend points toward market maturation with smaller yield premiums over time, but maintained stability compared to more volatile regional markets elsewhere in Japan.
How do Nagoya's yields and rental market conditions compare with other major Japanese cities?
Nagoya occupies a middle position among major Japanese cities, offering higher yields than Tokyo while maintaining comparable stability to Osaka and Fukuoka.
| City | Average Yield | Price Premium vs Nagoya | Market Characteristics |
|---|---|---|---|
| Tokyo | 3.2-3.4% | 70% higher prices | Declining yields, strongest demand |
| Osaka | 4.2-4.7% | Moderate prices | Stable market, similar yields to Nagoya |
| Fukuoka | 4.2-5.0% | Lower prices | High yields, strong regional growth |
| Nagoya | 3.5-4.7% | Baseline | Moderate growth, attractive balance |
Tokyo's market offers the lowest yields at 3.2-3.4% but commands premium prices approximately 70% above Nagoya levels. Tokyo's market benefits from the strongest rental demand but provides limited yield opportunities for value-focused investors.
Osaka delivers comparable yields to Nagoya at 4.2-4.7% with similar market stability characteristics. Both cities offer attractive alternatives to Tokyo's premium pricing while maintaining strong economic fundamentals.
Fukuoka achieves the highest yields among major cities at 4.2-5.0% with lower acquisition costs than Nagoya. However, Fukuoka's smaller market size may limit liquidity for larger investment strategies.
Nagoya's positioning provides an attractive balance between Tokyo's stability and regional cities' yield advantages, making it particularly suitable for investors seeking moderate risk-adjusted returns in Japan's property market.
It's something we develop in our Japan property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Nagoya's rental market presents compelling opportunities for investors seeking higher yields than Tokyo while maintaining market stability comparable to other major Japanese cities.
Success in Nagoya's rental market requires careful property selection, conservative vacancy assumptions, and thorough understanding of local tenant demographics to optimize returns within the 3.5-4.7% yield range.
Sources
- BambooRoutes - Nagoya Property Analysis
- Global Property Guide - Japan Price History
- E-Housing - House Prices in Japan
- BambooRoutes - Nagoya Price Forecasts
- INA Group - One Room Apartment Investment Guide
- X-House - Rental Market Analysis
- All Japan Relocation - Nagoya Housing Rates
- RealEstate.co.jp - Purchase Fees and Taxes
- Wagaya Japan - Real Estate Costs
- GaijinPot - Home Buying Costs in Japan