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Japan's real estate market offers unique opportunities across major cities, each with distinct investment profiles and returns.
(Tokyo leads with stability and appreciation potential, while regional cities like Fukuoka and Sapporo deliver higher rental yields with solid fundamentals.)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.
Tokyo offers the highest property values but lowest yields, while cities like Fukuoka and Sapporo provide better income potential with 5-6% gross returns.
Regional Japanese cities show stronger rental yields than Tokyo, with most markets experiencing steady price appreciation despite Japan's aging population.
| City | Avg. Price (¥/sqm) | Gross Yield | Net Yield | Vacancy Rate | YoY Price Growth |
|---|---|---|---|---|---|
| Tokyo | ¥800,000-¥1,500,000 | 3.4-3.8% | 2.0-2.4% | 3.8% | 10%+ |
| Osaka | ¥875,000 | 4.5-4.7% | 2.5-3.0% | 4.0% | 2-3% |
| Fukuoka | ¥700,000 | 5.0% | 3.0-3.5% | 5.2% | 9% |
| Sapporo | ¥600,000 | 5.0% | 3.0% | 3.8% | 5.8% |
| Yokohama | ¥800,000-¥1,000,000 | 4.4-4.5% | 2.5% | 6.9% | 3-5% |
| Nagoya | ¥800,000-¥900,000 | 3.5-4.7% | 2.0% | 4.4% | 3-4% |
What are the average property prices per square meter in Japan's main cities?
Property prices in Japan's major cities vary significantly, with Tokyo commanding the highest premiums and regional cities offering more affordable entry points.
Tokyo central wards lead the market with new condominiums priced between ¥1,100,000 and ¥1,500,000 per square meter as of September 2025. Used condos in the same areas trade for ¥800,000 to ¥1,000,000 per square meter.
Osaka follows with average prices around ¥875,000 per square meter, while Yokohama ranges between ¥800,000 and ¥1,000,000 per square meter. Nagoya sits in a similar bracket at ¥800,000 to ¥900,000 per square meter.
Regional cities offer the most attractive pricing for investors. Fukuoka averages ¥700,000 per square meter, while Sapporo presents the lowest entry point at approximately ¥600,000 per square meter.
These price differentials reflect each city's economic importance, population density, and local demand dynamics in the Japanese property market.
What are the current rental yields in major Japanese cities?
Japanese rental yields show an inverse relationship to property prices, with regional cities delivering superior returns compared to Tokyo.
Tokyo offers gross rental yields between 3.4% and 3.8%, which translate to net yields of 2.0% to 2.4% after accounting for expenses. This reflects the capital's premium pricing and strong appreciation potential.
Osaka provides better income returns with gross yields of 4.5% to 4.7% and net yields between 2.5% and 3.0%. Yokohama delivers similar performance at 4.4% to 4.5% gross and approximately 2.5% net yields.
Regional cities excel in rental income generation. Both Fukuoka and Sapporo achieve 5.0% gross yields, with net returns reaching 3.0% to 3.5% in Fukuoka and 3.0% in Sapporo. Nagoya ranges from 3.5% to 4.7% gross, settling around 2.0% net.
Net yields typically fall 1.2 to 2 percentage points below gross figures due to taxes, maintenance, vacancy periods, and management costs across all Japanese markets.
How have property prices changed over the past 5-10 years?
Japanese property markets have experienced steady appreciation over the past decade, with Tokyo leading the surge and regional cities showing varied performance.
| City | Recent Growth (2024-2025) | 5-Year Trend | 10-Year Performance |
|---|---|---|---|
| Tokyo | 10%+ YoY | Strong appreciation | Consistent upward trend |
| Osaka | 2-3% YoY | Steady growth | Moderate appreciation |
| Fukuoka | 9% YoY | Strong growth | Outperforming regions |
| Sapporo | 5.8% YoY | Moderate growth | Steady appreciation |
| Yokohama | 3-5% YoY | Stable growth | Consistent gains |
| Nagoya | 3-4% YoY | Steady appreciation | Stable performance |
It's something we develop in our Japan property pack.
What are the population projections for each city over the next decade?
Japan's demographic challenges present mixed scenarios for different cities, with most facing gradual population decline while maintaining economic relevance.
Tokyo's metropolitan area, currently home to 37 million people, faces a slight projected decline from 2025 onwards at approximately 0.21% year-over-year. However, the capital remains the most stable compared to other Japanese cities due to continued internal migration.
Osaka, Nagoya, Fukuoka, Sapporo, and Yokohama are all forecast to enter population decline by 2035. These cities will experience growing elderly populations and shrinking working-age demographics.
Some regional centers may temporarily maintain population numbers through internal migration patterns as people relocate from smaller towns to major cities. However, the overall demographic trend points downward across Japan.
Despite population decline, major cities retain their economic importance and continue attracting domestic and international residents, supporting real estate demand in prime locations.
What are the current vacancy rates for rental properties?
Vacancy rates across major Japanese cities remain within healthy ranges, indicating balanced rental markets as of September 2025.
Tokyo maintains a low vacancy rate of 3.8%, reflecting strong rental demand and a downward trend from previous years. Sapporo matches this figure at 3.8%, though with a recent slight increase.
Osaka and Nagoya show stable vacancy rates at 4.0% and 4.4% respectively, with Nagoya experiencing slight improvement. These levels indicate balanced supply and demand dynamics.
Fukuoka's vacancy rate sits at 5.2%, though this figure is declining, particularly in central areas where demand from students and professionals continues growing. Yokohama reports the highest vacancy rate at 6.9%, but this metric is improving steadily.
All major Japanese cities maintain vacancy rates below concerning levels, with most trending toward improvement as economic activity and rental demand stabilize post-pandemic.
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How does rental demand compare between locals, students, and expatriates?
Rental demand patterns vary significantly across Japanese cities, with each market segment contributing differently to overall housing demand.
Tokyo and Yokohama attract the highest concentration of expatriates and international students alongside dominant local demand. The capital's international business presence and numerous universities create diverse tenant pools.
Osaka shows solid local demand with growing student and expatriate segments, particularly in technology and manufacturing sectors. The city's expanding international presence supports foreign rental demand.
Fukuoka experiences rising demand from students and professionals, including expatriates, driven by the city's growing technology sector and multiple universities. The city has become increasingly popular among young professionals and international residents.
Sapporo and Nagoya maintain strong local demand with moderate contributions from student and expatriate populations, reflecting their more domestically-focused economies while still attracting some international residents.
What are the current mortgage interest rates for foreign and domestic buyers?
Japan offers some of the world's lowest mortgage interest rates, with minimal differentiation between foreign and domestic borrowers who meet qualification requirements.
Current Japanese mortgage rates range from 0.18% to 0.7%, spanning variable to fixed-rate options as of September 2025. These exceptionally low rates reflect the Bank of Japan's long-standing monetary policy.
Foreign buyers can access similar rates to domestic purchasers when they provide proper documentation, including proof of income, employment stability, and residency status in Japan.
Variable rates typically start at the lower end of the range (0.18%-0.3%), while fixed-rate mortgages extend toward the higher range (0.5%-0.7%). The spread between these options remains historically narrow.
These favorable financing conditions significantly enhance investment returns and purchasing power for both domestic and international property buyers in Japan.
What are the average transaction costs when purchasing property?
Japanese property transactions involve several mandatory costs that typically total between 5% and 8% of the purchase price.
| Cost Type | Rate/Amount | Description |
|---|---|---|
| Stamp Duty | 0.2-0.5% | Government tax on property transactions |
| Acquisition Tax | 1.5-3% | Property registration and transfer tax |
| Brokerage Fee | ~3% | Real estate agent commission |
| Legal/Other Fees | 1-2% | Legal services, inspections, misc. costs |
| Total Range | 5-8% | Combined transaction expenses |
It's something we develop in our Japan property pack.
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 are the expected annual maintenance and management costs?
Annual property maintenance and management costs in Japan typically range from 0.7% to 1.5% of the property's total value, depending on building age, type, and management requirements.
Newer condominium buildings generally fall toward the lower end of this range at 0.7% to 1.0% annually. These properties benefit from modern systems and lower immediate maintenance needs.
Older properties or those requiring professional management services approach the higher range of 1.2% to 1.5% of property value. This includes managed condominiums with comprehensive building services and older structures needing more frequent repairs.
Management fees for rental properties typically include building maintenance, common area upkeep, administrative services, and professional property management when outsourced to local companies.
These ongoing costs directly impact net rental yields and should be factored into all investment calculations for accurate return projections.
How do economic growth and job market stability compare between cities?
Economic fundamentals vary significantly across major Japanese cities, with each offering distinct advantages for property investors.
- Tokyo: Japan's primary financial, technology, and international business hub with the highest economic stability and job market diversity
- Osaka: Major commercial center with diversified economy spanning manufacturing, finance, and services, providing stable employment opportunities
- Fukuoka: Rapidly growing technology and startup ecosystem, becoming increasingly attractive to young professionals and international businesses
- Yokohama: Benefits from proximity to Tokyo while maintaining its own industrial base and port activities
- Sapporo: Strong regional economy centered on services, tourism, and agriculture, with stable government and university employment
- Nagoya: Manufacturing powerhouse, particularly automotive industry, providing industrial job stability
What is the expected return on investment including appreciation and rental income?
Japanese property investments offer varying return profiles depending on city choice and investment strategy, with total returns combining rental income and capital appreciation.
Tokyo typically delivers gross ROI of 3% to 4.5% annually, with lower net yields offset by stronger price appreciation potential. The capital's premium pricing reduces initial income but provides stability and long-term value growth.
Regional cities like Osaka, Fukuoka, and Sapporo generate higher gross returns of 5% to 6% or more, benefiting from superior rental yields while maintaining moderate but positive appreciation rates.
Net yields across Japanese markets range from 2% to 4%, while capital appreciation contributes an additional 1% to 3% annually in most markets. Tokyo shows the strongest appreciation component, while regional cities excel in income generation.
Total expected returns combining both income and appreciation typically range from 4% to 7% annually across major Japanese cities, with specific performance depending on location, property type, and market timing.
How liquid are these property markets for resale purposes?
Property liquidity varies significantly across Japanese cities, with major metropolitan areas offering the fastest resale timeframes and most active buyer pools.
Tokyo and Yokohama property markets demonstrate the highest liquidity levels, with well-located properties typically selling within weeks to a few months in city centers. The concentration of buyers and active investment market supports quick transactions.
Osaka also maintains good liquidity as a major regional city, though properties may require 2 to 6 months for sale completion depending on location and pricing. The city's economic importance supports consistent buyer interest.
Fukuoka, Sapporo, and Nagoya generally offer reasonable liquidity for quality properties, particularly in central locations. However, these markets may require longer marketing periods, typically 2 to 6 months for successful sales.
All major Japanese cities maintain more liquid property markets than rural areas, though investors should expect longer sale processes compared to highly liquid markets like Tokyo or other international gateway cities.
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.
Tokyo offers the most stable investment environment with strong appreciation potential, while regional cities like Fukuoka and Sapporo provide superior rental yields for income-focused investors.
Japan's low mortgage rates and reasonable transaction costs make property investment accessible, though investors should carefully consider each city's demographic trends and economic fundamentals.
Sources
- E-Housing Japan Property Prices
- Global Property Guide Japan
- BambooRoutes Japan House Prices
- BambooRoutes Japan Apartment Costs
- BambooRoutes Japan Rental Prices
- SCMP Japan Population Crisis
- Indian Express Japan Demographics
- MF Realty Japan Vacancy Report
- IQI Global Japan Real Estate
- Tokyo Portfolio Purchase Costs