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Yes, the analysis of Osaka's property market is included in our pack
Osaka's rental yields currently average between 4.5% and 6.5% gross, making it one of Japan's more attractive property investment destinations. The city offers stronger returns than Tokyo while maintaining lower property prices and vacancy rates around 3.8% to 4.0%.
Property prices in Osaka typically range from ¥18-20 million for older apartments to ¥55-57 million for new condominiums, with additional fees and taxes adding 6-8% to the purchase price. Studio apartments near universities deliver the highest yields at 5-6%, while larger family properties offer lower but more stable returns.
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Osaka rental yields average 4.5-6.5% gross, with studio apartments delivering the highest returns at 5-6% in student areas. Central neighborhoods like Kita and Chuo offer stable yields of 4.5-5.5%, while outer wards can reach 6-7%.
Property prices range from ¥18-57 million depending on size and location, with net yields typically 1.5-2 percentage points lower than gross after expenses. Vacancy rates remain low at 3.8-4.0%, and rental demand continues growing from students, professionals, and international residents.
| Property Type | Gross Yield (Central) | Gross Yield (Outer) | Monthly Rent Range |
|---|---|---|---|
| Studio/1K | 5-5.5% | 6-7% | ¥60,000-¥80,000 |
| 1LDK-2LDK | 4.5-5.5% | 5.5-6.5% | ¥90,000-¥200,000 |
| Detached Houses | 3.5-4.5% | 4.5-5.5% | ¥117,000+ |
| Student Housing | 5.5-6% | 6.5-7% | ¥50,000-¥70,000 |
| Luxury Condos | 3.5-4% | 4-4.5% | ¥250,000+ |
| New Developments | 3-4% | 4-5% | ¥100,000-¥300,000 |
| Short-term Rentals | 7-8% | 6-7% | ¥8,000-¥15,000/night |
How much do properties typically cost in Osaka when you factor in fees and taxes?
Property prices in Osaka range significantly based on location, age, and property type, with additional costs adding 6-8% to the headline price.
New condominiums in central Osaka cost between ¥55-57 million ($390,000-$410,000), while secondhand condominiums of around 70m² in good condition average ¥45 million ($320,000). Older apartments or those in outer areas can be found for ¥18-20 million ($130,000-$143,000).
Detached houses in suburban areas typically range from ¥20-40 million ($140,000-$280,000), depending on size and exact location. The most affordable options are older studio apartments or small units in peripheral wards, which can start around ¥15 million.
Beyond the purchase price, buyers must budget for additional fees including agent commissions (typically 3% plus ¥60,000), registration taxes, stamp duty, and property taxes. These combined costs add approximately 6-8% to the total investment.
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What are the main differences in yields between small, medium, and large surface properties?
Smaller properties consistently deliver higher rental yields in Osaka, with studio and 1K apartments achieving 5-6% gross yields in central areas.
Studio apartments and 1K units (typically 20-30m²) offer the strongest yields because their lower purchase prices don't scale proportionally with rental income. These properties rent for ¥60,000-¥80,000 monthly and are in high demand from students and young professionals.
Medium-sized properties like 1LDK and 2LDK apartments (40-60m²) provide moderate yields of 4.5-5.5% in central locations. These units rent for ¥90,000-¥200,000 monthly and attract working professionals and small families.
Larger properties including detached houses and family-sized apartments typically yield 3.5-4.5% because their purchase prices increase faster than achievable rents. A detached house costing ¥35 million might only rent for ¥117,000 monthly, creating lower yield percentages.
The yield gap becomes more pronounced in premium locations where large property prices carry significant premiums but rents don't increase proportionally.
Which neighborhoods in Osaka currently offer the strongest rental returns?
Outer wards and developing areas provide the highest rental yields, often reaching 6-7% gross, while central districts offer more stability at 4.5-5.5%.
| Neighborhood Type | Gross Yield Range | Key Characteristics |
|---|---|---|
| Central (Kita, Chuo, Namba) | 4.5-5.5% | High demand, stable rents, premium prices |
| University Areas | 5.5-6.5% | Strong student demand, consistent occupancy |
| Outer Wards (Joto-ku) | 5.5-6.5% | Lower entry costs, growing infrastructure |
| Bay Area (Konohana-ku, Minato-ku) | 6-7% | Development potential, transport improvements |
| Expo 2025 Adjacent Areas | 5-6% | Recent appreciation, sustained interest |
| Traditional Residential | 4.5-5.5% | Family-oriented, stable but modest growth |
| Transit-Connected Suburbs | 5.5-6% | Good accessibility, affordable entry points |
Areas near universities consistently outperform due to reliable student rental demand and lower property acquisition costs. The bay area neighborhoods are experiencing infrastructure development that supports both rental demand and property appreciation.
How do rental yields compare between apartments, houses, and newer developments?
Apartments deliver the most consistent yields at 4.5-5.5% gross, while houses and new developments typically underperform due to higher purchase premiums.
Apartments, particularly mid-sized units near city centers, provide the most reliable returns because they match tenant demand patterns and offer efficient rent-to-price ratios. One-bedroom apartments in central areas consistently achieve 5-5.5% yields.
Detached houses generally yield 3-4.5% due to higher purchase costs relative to achievable rents. A house costing ¥35 million might rent for ¥117,000 monthly, creating a lower yield percentage than a ¥20 million apartment renting for ¥85,000.
New developments often yield 3-4% because developers add premiums to sales prices that aren't reflected in rental rates. New buildings may command slightly higher rents but not enough to offset the purchase premium.
Older, well-maintained properties frequently outperform newer ones on yield metrics, especially when located near major transit stations. These properties offer better entry pricing while still attracting quality tenants.
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What are the typical examples of monthly rents across different property types in Osaka?
Monthly rents in Osaka vary significantly by property type and location, with studio apartments starting around ¥50,000 and luxury condos exceeding ¥250,000.
Studio and 1K apartments, popular with students and young professionals, typically rent for ¥60,000-¥80,000 monthly in central areas. Student housing in university districts can be found for ¥50,000-¥70,000, representing some of the most affordable options.
1LDK apartments attract working professionals and rent for ¥90,000-¥130,000 monthly, while 2LDK family units command ¥120,000-¥200,000 depending on location and amenities. These mid-range properties represent the bulk of Osaka's rental market.
Detached houses average around ¥117,000 monthly but can vary widely based on size and location. Luxury condominiums in premium buildings start at ¥250,000 and can exceed ¥400,000 for penthouses or prime locations.
Location significantly impacts rents, with central areas like Umeda and Namba commanding 20-30% premiums over outer wards, while properties near major universities maintain stable demand regardless of location.
Who are the main renter profiles in Osaka and how do they influence yields?
Students, professionals, and expats form the core rental market in Osaka, each driving demand for different property types and rent levels.
1. **Students** create consistent demand for budget properties, particularly studios and 1K apartments near universities. They support high occupancy rates and accept smaller living spaces, making them ideal tenants for yield-focused investors. Student areas maintain vacancy rates below 2% during academic periods.2. **Young Professionals** drive demand for 1LDK and 2LDK apartments in central areas with good transport links. They're willing to pay premium rents for modern amenities and convenience, supporting higher rental rates in business districts.3. **International Workers and Expats** increasingly choose Osaka over Tokyo, seeking larger spaces and better value. They often prefer furnished apartments and are less price-sensitive, supporting premium rental rates in expat-friendly neighborhoods.4. **Families** focus on suburban areas and larger apartments with multiple bedrooms. While they offer longer tenancy periods, they're more price-conscious and drive demand for value-oriented properties rather than premium units.5. **Business Travelers** support short-term rental demand in central districts, particularly near major hotels and business centers. This segment can achieve higher daily rates but requires more active management.It's something we develop in our Japan property pack.
What are the current vacancy rates by property type and area, and how do they affect returns?
Osaka's overall residential vacancy rate stands at 3.8-4.0% as of mid-2025, significantly lower than Japan's national average and supporting strong rental returns.
New buildings under one year old show higher initial vacancy rates at 22.96%, but these drop rapidly as properties lease up and establish tenant bases. This temporary vacancy period should be factored into first-year return calculations.
Premium central areas and student-focused neighborhoods maintain vacancy rates below 3%, reflecting strong ongoing demand. Properties near major universities rarely experience extended vacancy periods due to consistent student enrollment and turnover patterns.
Family-oriented properties and peripheral locations show slightly higher vacancy rates around 4-5%, particularly for larger units that require more time to find suitable tenants. However, once occupied, these properties often maintain longer tenancy periods.
Low vacancy rates directly support rental yields by minimizing income interruption and reducing the need for rental concessions or price reductions to attract tenants.
How do yields differ if I rent out a property long term versus short term to tourists or business travelers?
Short-term rentals in core tourist districts can achieve 7-8% yields during strong occupancy periods, but long-term rentals offer more stability at 4.5-6.5% yields.
Short-term rental properties in prime locations like Namba, Dotonbori, and Shinsaibashi can generate higher daily rates, particularly during peak tourism seasons and business periods. Daily rates of ¥8,000-¥15,000 can translate to monthly incomes exceeding traditional long-term rents by 40-60%.
However, short-term rentals face significant volatility from tourism fluctuations, seasonal demand variations, and changing regulations. Operating costs are also higher due to cleaning, management, and platform fees that can reduce net yields by 2-3 percentage points.
Long-term rentals provide predictable monthly income with lower management requirements and operating costs. Tenants typically handle utilities and daily maintenance, reducing landlord responsibilities and expenses.
Regulatory considerations increasingly favor long-term rentals, as local authorities implement stricter short-term rental licensing and taxation requirements that can impact profitability and operational complexity.
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How have rents and yields in Osaka changed compared to one year ago and compared to five years ago?
Rental rates in Osaka have increased 3-4% year-over-year as of September 2025, while property prices have risen more dramatically at 9.4% annually, creating yield compression in some segments.
Compared to 2024, rents have grown modestly across most property types, with studio apartments and student housing showing the strongest increases due to sustained demand. However, property purchase prices have outpaced rental growth, particularly in central areas experiencing strong investment interest.
Over the five-year period from 2020-2025, yields have remained relatively stable in outer wards and student-focused areas while experiencing slight compression in premium central locations. Areas that attracted significant development investment saw faster price appreciation than rental growth.
Student housing and smaller apartments have maintained or improved yields over the five-year period due to consistent demand growth and more modest price increases. These property types have proven more resilient to yield compression trends.
The post-pandemic recovery and upcoming Expo 2025 have influenced market dynamics, with rental demand recovering strongly while investment capital has driven up property prices in anticipation of future growth.
What are the best-performing strategies or property choices today for an investor looking at Osaka?
Budget-focused student properties in well-connected outer wards currently offer the best risk-adjusted returns, combining high yields with low vacancy risk.
1. **Target student-centric properties** in areas with established universities, focusing on studio and 1K apartments that consistently achieve 5.5-6% yields with minimal vacancy periods.2. **Invest in mid-market properties** in developing neighborhoods adjacent to major infrastructure projects, particularly areas benefiting from new transit connections or Expo-related development.3. **Consider renovation opportunities** with older apartments near train stations, where modest improvements can command rental premiums while maintaining attractive purchase prices.4. **Focus on international professional markets** by selecting 1LDK and 2LDK units in neighborhoods with growing expat populations, balancing yield with appreciation potential.5. **Maintain long-term holding strategies** in fast-developing areas rather than pursuing short-term speculation, allowing properties to benefit from ongoing infrastructure improvements and demographic shifts.Successful investors are currently avoiding premium new developments where purchase prices have outpaced rental potential, instead focusing on value-oriented properties with clear tenant demand drivers.
What does the yield breakdown look like once you factor in mortgage costs, maintenance, and taxes?
Net yields in Osaka typically fall 1.5-2 percentage points below gross yields after accounting for financing costs, maintenance, management, and taxes.
Starting with gross yields of 4.5-6.5%, investors can expect net yields of 2.5-4% depending on their financing structure and property management approach. Mortgage interest rates currently around 1-2% for qualified borrowers significantly impact returns for leveraged investments.
Annual operating costs typically include property management fees (5-8% of rental income), maintenance and repairs (1-2% of property value), property taxes (1.4% of assessed value), and income taxes on rental profits. Insurance and vacancy allowances add additional costs.
Higher-yielding properties in outer areas often maintain better net yields because lower purchase prices reduce absolute financing costs, while maintenance expenses remain relatively similar across different price points.
Cash purchasers obviously achieve higher net yields by eliminating financing costs, but leveraged investors can still achieve attractive returns while maintaining capital efficiency for portfolio diversification.
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How do current and forecasted yields in Osaka compare over the next one, five, and ten years—and how does the city compare to other major cities like Tokyo, Seoul, or Bangkok?
Osaka yields are expected to remain at 4.5-6% over the next 1-2 years, with long-term stability anticipated as the market matures post-Expo 2025.
Short-term forecasts (2025-2027) suggest continued yield stability as rental demand from international migration and infrastructure investments balances modest property price growth. The Expo 2025 effect may create temporary demand spikes followed by normalization.
Five-year projections (2025-2030) indicate potential yield compression of 0.5-1% as Osaka's property market matures and prices align more closely with Tokyo levels. However, ongoing demographic trends and infrastructure development should support rental demand growth.
Compared to major regional cities, Osaka currently offers yields 1-1.5 percentage points higher than Tokyo (which averages 3.5% gross), while Seoul provides comparable 3-5% yields with greater volatility. Bangkok can offer 5-8% yields but with significantly less stable tenancy and higher regulatory risks.
Ten-year outlook suggests Osaka will remain competitive within the 4-5% yield range, supported by Japan's stable legal framework, growing international workforce, and continued infrastructure investment, making it attractive relative to other major Asian cities.
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.
Osaka's rental market offers compelling opportunities for property investors, with yields averaging 4.5-6.5% gross and strong tenant demand across multiple segments.
The combination of affordable entry prices, low vacancy rates, and diverse rental markets makes Osaka an attractive alternative to higher-priced Tokyo while maintaining the stability and growth potential of Japan's second-largest metropolitan area.
Sources
- E-Housing Japan - House Prices in Japan
- BambooRoutes - Osaka Price Forecasts
- KPMG Japan - Taxation in Japan 2024
- Global Property Guide - Japan Rent Yields
- BambooRoutes - Osaka Real Estate Trends
- BambooRoutes - Average Rent Japan
- Wagaya Japan - Property Investment Guide
- Wagaya Japan - Net Yield Analysis
- BambooRoutes - Best Neighborhoods Osaka
- InvestAsian - Real Estate Osaka