Is buying a property in Higashiyama a good investment?

Last updated on December 20, 2023

Yes, the analysis of Kyoto's property market is included in our pack

If you've marveled at the historic temples and cultural heritage of Higashiyama, you might have envisioned establishing a residence in this charming Kyoto district, immersing yourself in its local history and timeless allure.

Is it a good idea though? What's the current state of the real estate market in that area? Are property values appreciating or depreciating? Are investors seeing returns on their real estate investments? How's the demand for rentals?

We'll answer all these questions for you! When building and updating our property pack for Japan, our team has been researching and surveying this area. In fact, there is significant customer interest in investing there. Therefore, we believe it would be beneficial to include some information about it in our property pack.

Why do property buyers like investing in Higashiyama?

Higashiyama, a district in Kyoto, Japan, has garnered attention as a desirable location for property buyers, and it's not hard to see why.

Unlike other real estate markets, Higashiyama offers a blend of historical charm and modern convenience. This area, known for its narrow lanes, wooden buildings, and traditional tea houses, presents a stark contrast to the more modernized districts of Kyoto, such as the bustling downtown area.

Now, let's delve into what sets Higashiyama apart. First, its cultural significance is a major draw. This district houses many important temples and shrines, including Kiyomizu-dera, known for its stunning views and architectural beauty.

This rich historical backdrop is not something you'll find in most urban real estate markets. For those who appreciate culture and history, Higashiyama is like living within a living museum, offering an experience that's both immersive and unique.

The popularity of Higashiyama as a residential area began to rise significantly in the late 20th and early 21st centuries. This surge can be attributed to the growing interest in cultural tourism and the desire for a more authentic, traditional Japanese living experience. However, whether this popularity will remain is a topic of debate.

On one hand, the timeless appeal of its historical and cultural elements suggests that Higashiyama will continue to attract buyers. On the other hand, trends in real estate are always subject to change, and the future might bring shifts in preferences.

Now, consider the kind of people Higashiyama attracts. It's particularly appealing to those who value cultural richness and historical significance in their living environment.

This includes not just local Japanese buyers but also international property investors and expatriates who are seeking a uniquely Japanese living experience. The area's charm and tranquility are particularly attractive to those looking to escape the hustle and bustle of more urban settings.

However, Higashiyama is not without its drawbacks. The very features that make it attractive – its historic buildings and narrow lanes – also mean that it may lack some of the conveniences of modern living. For instance, the area is not as well-equipped with the latest amenities as more modern districts.

Additionally, the preservation of its historical aspects can mean restrictions on development and renovations, which might be a deterrent for some buyers.

Also, as a popular tourist destination, certain areas can get quite crowded, which might not appeal to everyone seeking a quiet residential space.

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Why is Higashiyama a nice place to live?

Living in Higashiyama is like stepping into a beautifully preserved piece of history, where the charm of old Japan seamlessly blends with the conveniences of modern life.

This district, known for its picturesque streets and traditional wooden machiya houses, offers a lifestyle that is unique in its tranquility and cultural richness. The pace of life here is generally slower and more contemplative compared to the bustling city centers, making it ideal for those who cherish a more peaceful, reflective way of living.

The culture in Higashiyama is deeply rooted in Japan's history. With numerous temples and shrines, such as Kiyomizu-dera and Yasaka Shrine, residents often find themselves living amidst sites of significant cultural and historical importance.

The area is also famous for its traditional festivals and events, providing a continuous connection to the rich cultural heritage of Kyoto.

The expatriate community in Higashiyama, while not as large as in some other parts of Kyoto, is quite vibrant. Expats are often drawn to the area for its cultural significance and the opportunity to experience traditional Japanese living.

This creates a unique blend of local and international atmospheres, where one can immerse themselves in Japanese culture while still finding familiar comforts.

Living in Higashiyama does come with a higher cost, mainly due to its desirability and historical significance. Property prices and living expenses can be higher compared to other parts of Kyoto. However, many find the cultural and aesthetic value of the area justifies the cost.

Safety in Higashiyama is generally very good, as is the case in most of Kyoto and Japan at large. The crime rates are low, and the area is considered very safe for residents and tourists alike.

In terms of amenities and facilities, Higashiyama balances its historical preservation with modern conveniences. There are several schools, such as the Kyoto International School, which cater to both local and expatriate families. Healthcare facilities like the Kyoto University Hospital provide high-quality medical care.

For shopping and daily needs, there are various options ranging from traditional markets to modern shopping centers like the Fresco Supermarket.

The infrastructure in Higashiyama is well-maintained. The roads and utilities uphold the high standards typical of Japan, ensuring a comfortable living environment. Internet connectivity is excellent, as Japan is known for its high-speed internet services.

Accessibility is another perk of living in Higashiyama. It is well-connected to the rest of Kyoto, making it easy to commute for work or leisure. The area is served by several bus routes, and the Keihan Railway runs through Higashiyama, connecting it to downtown Kyoto and neighboring cities.

For longer distances, Kyoto Station is easily accessible, providing links to the rest of Japan through the Shinkansen (bullet train) network. The nearest major airport is Osaka's Kansai International Airport, which is accessible by train or bus.

The public transportation options in Higashiyama are excellent. The area is well-served by Kyoto's comprehensive bus network, and the nearby Keihan and Tozai subway lines make it easy to navigate the city.

This extensive public transport system makes getting around Kyoto convenient and efficient, whether you're commuting to work or exploring the city.

So, living in Higashiyama offers a unique blend of historical ambiance, cultural richness, modern amenities, and excellent connectivity, all wrapped up in the safety and high-quality infrastructure that Japan is known for.

It's a place that appeals to those who appreciate the finer, more serene aspects of life, amidst the backdrop of one of the world's most culturally rich cities.

How much does it cost to buy real estate in Higashiyama?

If you need a detailed and updated analysis of the prices, rents and yields, you can get our full guide about real estate investment in Japan.

Buying property in Higashiyama can be a unique investment, given its cultural and historical significance.

In this neighborhood, you'll find a range of residential properties, including apartments, traditional houses (often referred to as "machiya"), and in some cases, more upscale residences like luxury villas. The demand for properties in Higashiyama is influenced by its historical and cultural appeal, making traditional houses particularly sought after.

These properties offer a living experience steeped in Japanese history and aesthetics, which is a significant draw for both domestic and international buyers.

In terms of property types, Higashiyama is characterized more by resale properties than new developments. This is largely due to the area's historical status, which comes with stricter regulations on new construction to preserve its cultural heritage.

Consequently, the properties available are often older, traditional structures, with some being renovated to add modern amenities while retaining their historical charm.

When it comes to pricing, properties in Higashiyama are on the higher end, reflecting the area's desirability and historical value. Prices per square meter can vary widely, but generally, they are above the average for Kyoto.

For instance, a traditional machiya house might have a higher price per square meter compared to a modern apartment due to its cultural significance and rarity.

Over recent years, property values in Higashiyama have shown a steady increase. This trend is fueled by the area's unchanging appeal as a culturally rich and historically significant district. It's also worth noting that the limited availability of properties, due to preservation efforts, adds to the value of real estate in this area.

Looking ahead, the real estate market in Higashiyama is likely to remain robust. While there are not many upcoming large-scale developments due to the area's historical nature, any minor developments or city planning changes that enhance accessibility or amenities could positively impact property values.

For instance, improvements in public transportation or the addition of community facilities could make living in Higashiyama even more attractive.

Predictions for the real estate market in Higashiyama suggest that property values will continue to rise, albeit at a measured pace. Factors like the ongoing appeal of traditional Japanese culture, the limited supply of properties, and the steady influx of both domestic and international interest in living in such a unique setting, all point towards potential increases in value.

Furthermore, as global interest in cultural heritage and sustainable living grows, properties in Higashiyama, with their blend of history and natural beauty, are likely to be viewed as increasingly valuable.

Where is the best area to buy a property in Higashiyama?

When considering the best area to buy a property in Higashiyama, it's important to understand that this district is not monolithic; different parts of it offer varied atmospheres, property types, and prices.

Higashiyama, renowned for its scenic beauty and historical significance, has neighborhoods that cater to diverse preferences and budgets.

One of the most charming and sought-after areas in Higashiyama is around Kiyomizu-dera Temple. This area is known for its traditional machiya houses and narrow, stone-paved streets. The atmosphere here is quintessentially Kyoto - serene, historically rich, and visually stunning.

However, properties in this area are typically on the higher end of the price spectrum, reflecting their cultural and aesthetic value.

Another notable area is the vicinity of Yasaka Shrine and Maruyama Park. This area offers a delightful mix of traditional and modern, with easier access to contemporary amenities while still being steeped in the old-world charm of Kyoto. The properties here range from traditional houses to more modern apartments, catering to various tastes and budgets.

For those looking for up-and-coming areas within Higashiyama, the neighborhood around Sanjusangendo Temple is gaining attention. This area is a bit more removed from the dense tourist spots, offering a quieter living environment.

Yet, it still retains the cultural richness of Higashiyama. The properties here can be a mix of old and new, and the prices are generally more moderate compared to the areas closer to the major temples and shrines.

If you're considering where to look for property in Higashiyama, areas like Ninenzaka and Sannenzaka are also worth exploring. These neighborhoods are famous for their preserved historic streets and traditional architecture. Living here means immersing yourself in the heart of Kyoto's culture.

However, keep in mind that these areas can be quite popular with tourists, which might affect the living experience depending on your preferences.

On the contrary, areas immediately adjacent to the most popular tourist attractions might not be advisable for those seeking a more peaceful residential experience. While living next to a famous temple or shrine might seem appealing, it can also mean dealing with regular crowds and the hustle and bustle associated with tourist hotspots.

Additionally, these areas might have stricter regulations on property renovations and alterations due to their historical significance.

Here is a summary table to help you visualize better. If you need more detailed data and information, please check our property pack for Japan.

Area	Atmosphere	Property Types	Price Range
Kiyomizu-dera Vicinity	Serene, Historically Rich	Traditional Machiya Houses	High
Yasaka Shrine & Maruyama Park Area	Traditional & Modern Mix	Machiya Houses, Modern Apartments	Varied
Sanjusangendo Neighborhood	Quieter, Culturally Rich	Mix of Old and New Properties	Moderate
Ninenzaka and Sannenzaka	Historic Streets, Traditional	Traditional Architecture	Varies; generally high
Areas Adjacent to Major Attractions	Tourist-Centric, Busy	Varies; Often Traditional	High; depends on proximity to attractions

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Is there a strong rental demand in Higashiyama?

In Higashiyama, there is indeed a strong demand for rental properties, but the nature of this demand is quite specific to the area's unique characteristics.

The rental market in Higashiyama leans more towards short-term rentals, largely due to its popularity as a tourist destination. The area's rich cultural heritage, historic sites, and picturesque settings attract a considerable number of tourists year-round, making short-term rentals like vacation homes and Airbnb-style accommodations quite lucrative.

The target demographic for these rentals is predominantly tourists and cultural enthusiasts, both domestic and international. These individuals are typically drawn to Higashiyama for its historical and cultural significance, and they often seek accommodations that reflect the traditional Japanese aesthetic.

As a result, properties such as machiya (traditional wooden townhouses) or apartments with Japanese-style interiors are particularly popular.

These properties allow visitors to immerse themselves in a traditional Kyoto experience, which is a key part of the area's appeal.

Specific areas within Higashiyama, like the neighborhoods around Kiyomizu-dera and Yasaka Shrine, are especially popular for short-term rentals. These areas are known for their historical landmarks and scenic beauty, making them prime locations for tourists seeking an authentic Kyoto experience.

To reduce vacancy rates and attract more renters, amenities that enhance the traditional Japanese living experience can be particularly effective. Features like tatami mats, shoji screens, and Japanese gardens can make a property more appealing to tourists looking for an authentic stay.

Modern amenities, such as high-speed internet, comfortable bedding, and well-equipped kitchens, also add to the attractiveness, ensuring a comfortable stay without detracting from the traditional experience.

Regarding potential returns on investment, properties in Higashiyama can offer significant yields, especially if managed effectively for short-term rentals. While specific numbers vary, properties in prime locations with desirable traditional features can command high rental prices, particularly during peak tourist seasons.

The return on investment can be bolstered by maintaining high occupancy rates and ensuring that the property offers both the charm of traditional Japanese living and the comforts of modern amenities.

In terms of properties that are gaining increasing demand and could potentially yield better returns, traditional machiya houses, especially those that have been renovated to add modern comforts while preserving their historic charm, are becoming increasingly popular.

These properties cater to the growing trend of experiential travel, where tourists seek more than just a place to stay; they want an experience that is deeply rooted in the local culture and history.

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Is it easy to buy a property as foreigner in Higashiyama?

Before we answer the question, please know that we have an article dedicated to the experience of buying real estate as a foreigner in Japan.

Buying property in Higashiyama, Kyoto as a foreigner is feasible, but it's accompanied by certain challenges and considerations unique to Japan.

Unlike some other countries, Japan does not impose legal restrictions on foreigners purchasing property.

This means, theoretically, the process is as open to foreigners as it is to Japanese citizens. However, there are several factors and nuances that foreign buyers need to be aware of.

Firstly, understanding the local real estate market is crucial. Higashiyama, with its historic significance and cultural landmarks, has a unique property market.

Traditional properties like machiya (wooden townhouses) are prevalent here, and their upkeep and renovation can be subject to specific regulations to preserve their historical value. This could limit the extent to which you can alter or renovate the property.

The purchasing process in Japan involves several steps, starting with property search, followed by negotiation, signing a sales contract, paying a deposit, and finally completing the transaction.

One unique aspect of real estate transactions in Japan is the extensive use of seals or stamps (hanko) for official documents, which can be a novel experience for foreigners.

A primary risk associated with property investment in Higashiyama is the cost of maintenance and renovation, especially for older, traditional properties. These costs can be significant and are often underestimated by foreign buyers.

Additionally, there's the risk of natural disasters, like earthquakes, which Japan is prone to. Ensuring the property is structurally sound and insured is vital.

Common pitfalls for foreign buyers include navigating the language barrier and understanding the local real estate laws and tax regulations. Unique to Japan, issues like land rights versus building rights, and the concept of "key money" (reikin) in rentals, can be confusing for those unfamiliar with the Japanese property market.

Working with a local real estate agent or lawyer is highly advisable. They can provide invaluable assistance in navigating the complexities of the Japanese real estate market, handling legal and administrative procedures, and offering insights into local market trends.

They can also assist in overcoming language barriers and ensuring that all documentation is correctly handled.

As for exit strategies, property investors in Higashiyama typically look at either selling the property or renting it out. The rental market, especially for short-term rentals targeting tourists, can be lucrative given the area's popularity.

However, selling can be challenging due to the niche appeal of traditional properties and the relatively slow growth in property values compared to more modern areas.