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What will happen in Hiroshima’s real estate market? Will prices go up or down? Is Hiroshima still a hotspot for foreign investors? How is Japan’s government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with local real estate agents, developers, and clients who buy properties in Hiroshima, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
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1) Rental yields in Hiroshima will rise as it attracts more domestic and international students
Rental yields in Hiroshima are on the rise as the city becomes a hotspot for both local and international students.
Hiroshima's universities are seeing a surge in student numbers, with Hiroshima University hosting 10,645 undergraduates and 4,631 graduates as of May 2024. This influx naturally boosts the demand for student-friendly rental properties.
International exchange programs are also booming. The Hiroshima University Study Abroad Program (HUSA) has attracted students from 96 different countries, totaling 1,831 international students by May 2024. These students often have unique housing needs and budgets, which can drive up rental prices.
Studio apartments are in high demand, with only 54 listings available in Hiroshima. This scarcity highlights the city's growing appeal as a study destination, pushing rental yields higher.
The combination of more students and limited housing options creates a competitive rental market. Property owners are seeing higher returns on their investments as a result.
With both domestic and international students flocking to Hiroshima, the city is becoming a prime location for property investment, offering lucrative opportunities for rental income.
Sources: Hiroshima University, Nestpick, JMU Global
2) Foreign investment in Hiroshima’s residential properties will grow as international relations improve
Hiroshima is becoming a hotspot for foreign property investment as international ties grow stronger.
In 2023, foreign investment in Japan's real estate market hit $10.2 billion, a big jump from the previous year. This boom is thanks to the weaker yen, making Japanese properties more affordable for international buyers. Hiroshima, in particular, is catching the eye of global investors.
Property prices in Hiroshima are climbing, with existing condos up by 9% and new ones soaring by 42.5% in 2023. This shows that more people are seeing Hiroshima as a great place to live. The Japanese government is also pushing to attract foreign investment, aiming to double foreign direct investment stocks by 2030.
Relaxed rules and tax perks are making it easier for foreign investors to dive into the market, especially those from places like Singapore. The growing global fascination with Japanese culture and lifestyle is another draw for investors eyeing Hiroshima.
The city is also seeing a rise in international visitors, thanks in part to new luxury hotels like the Hilton Hiroshima, which opened in October 2022. This influx of visitors could further boost interest in the local property market.
Sources: MOFA Japan, Japan Property Blog
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.
3) Higher yields in Hiroshima's business districts will result from steady demand from corporate tenants
Properties in Hiroshima's business districts are hot commodities thanks to a steady stream of corporate tenants.
Rental prices are on the rise, and in 2022, commercial land prices jumped by 2.6%, showing a clear demand for office space. This isn't just a fluke; it's a trend driven by the city's strategic location and its appeal to industries like automotive and medical devices.
Hiroshima is buzzing with corporate expansion announcements, making it a magnet for businesses. The city's strategic location and natural beauty are big draws, especially for industries looking for a vibrant place to set up shop.
The government is rolling out the red carpet with substantial subsidies for companies that establish facilities in Hiroshima. This is a big incentive for businesses, which in turn fuels the demand for office space and keeps occupancy rates high.
Infrastructure is getting a major boost too. The upcoming JR Hiroshima New Station Building, opening in 2025, will offer easy access to shopping centers and hotels, making the area even more appealing for commercial ventures.
With these developments, it's no wonder that Hiroshima's business districts are thriving, offering promising returns for property investors.
Sources: JETRO, Japan Property
4) Property prices in northern Hiroshima will grow slowly because of limited infrastructure development
In Hiroshima's northern districts, property prices are rising more slowly due to limited infrastructure development.
While central areas like Hatchobori and Kamiyacho enjoy significant government investment, the northern districts receive fewer resources. This focus on central Hiroshima leaves the northern areas lagging in growth opportunities.
Historically, after World War II, reconstruction efforts prioritized the city center, boosting its economic and population growth. This historical focus has contributed to the slower development pace in the northern districts.
Public transportation is another challenge. Hiroshima's tram network is extensive but primarily serves the city center, with limited routes reaching the northern areas. This makes these districts less accessible and less appealing for new residents and businesses.
For potential property buyers, this means that while the northern districts might offer lower prices, the growth potential is limited due to these infrastructure constraints. The lack of development can impact long-term property value and convenience.
Understanding these dynamics is crucial for anyone considering investing in Hiroshima's northern districts, as infrastructure plays a key role in property value and livability.
Sources: Japan Property, World Bank, Japan Experience, E-Housing
5) Property prices on Hiroshima's outskirts will fall as urbanization shifts to central areas
Hiroshima's outskirts are seeing a decline in property interest as people flock to the city center.
In 2023, Hiroshima saw a net loss of about 7,400 people, indicating a trend of outbound migration from the outskirts to more urbanized areas. This shift is largely due to the appeal of central Hiroshima, which has been the focus of significant government investment.
The Hiroshima Peace City Construction Law has spurred redevelopment in areas like the Motomachi district. This area now features new residential housing and essential infrastructure, including the Hiroshima Central Library, making it a magnet for both residents and businesses.
There's a rising demand for urban housing, especially among seniors who need to be close to medical facilities. This demand is being met in central Hiroshima, where compact housing options are more readily available compared to the outskirts.
Large-scale urban redevelopment projects are also creating new investment opportunities in the city center. These projects are attracting businesses and residents, further boosting the appeal of central Hiroshima over its outskirts.
As urbanization continues to focus on central areas, the outskirts of Hiroshima are likely to experience a decline in property prices. This trend is driven by demographic changes and economic incentives that favor urban living.
Sources: Statista, World Bank, E-Housing
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6) Demand for modern, tech-enabled homes in Hiroshima will grow as the younger population increases
The younger crowd in Hiroshima is set to boost the demand for modern, tech-savvy homes.
In Japan, the smart home market is on the rise, with projections showing it could hit $18.9 billion by 2032. This surge is largely thanks to younger folks who are all about embracing smart home tech.
From 2025 to 2029, the smart appliances market in Japan is expected to grow by 12.70%. Young tech enthusiasts love features like remote monitoring and control, which are driving this demand. Millennials and Gen Z are big on tech, as seen in their heavy use of generative AI, showing a clear preference for tech-enabled living spaces.
Hiroshima is buzzing with initiatives like the Hiroshima University Smart City Co-Creation Consortium, which focuses on building sustainable, tech-forward urban areas. These projects are a magnet for young professionals who crave modern amenities and eco-friendly living. The city's tech startups and innovation hubs are also fueling this trend, creating a vibrant ecosystem for tech-enabled homes.
Sources: GlobeNewswire, SoftBank News, Salesforce News, Statista
7) Hiroshima’s rental prices will increase as it attracts more international tourists
Hiroshima is becoming a hotspot for international tourists, and rental prices are expected to rise as a result.
One big reason for this is the record-breaking visitor numbers at the Hiroshima Peace Memorial Museum in 2023, with expectations to hit 1.9 million by March 2024. The G7 Summit held in Hiroshima also played a part, drawing global eyes to the city.
Hotel and short-term rental occupancy rates in Hiroshima are climbing. In April 2023, Japan's hotel occupancy was 71.7%, and Hiroshima saw a significant share of this demand. By mid-2024, the occupancy rate in Japan rose to 74.4%, showing a steady increase.
The Hiroshima municipal government is actively promoting tourism, which is attracting more visitors and likely pushing rental prices up. This proactive stance is expected to continue, further boosting tourism.
International hospitality brands are expanding in Hiroshima, signaling a growing interest in the city. This trend suggests that more tourists will be looking for places to stay, driving rental prices higher.
With these factors in play, it's clear that Hiroshima's rental market is heating up as the city becomes a more popular destination.
Sources: Nippon.com, CoStar, Real Estate Asia
8) Rental prices in Hiroshima will rise steadily as young professionals move in for jobs
Hiroshima's rental market is on the rise as young professionals flock to the city for job opportunities.
With a diverse industrial base, including big names like Mazda, Hiroshima is becoming a magnet for a growing workforce. Major redevelopment projects around Hiroshima Station are making the city even more attractive to businesses and investors, which in turn boosts job opportunities.
Hiroshima boasts the fourth highest private rental housing rate in Japan, a clear sign of the influx of young professionals. This demand is driven by a stable job market and the presence of many educational institutions. Even though Japan's population is declining, employment in Hiroshima is on the upswing, which means more people are looking for housing.
Minami and Nishi Wards are hot spots in Hiroshima City, thanks to their central locations and excellent transport links. These areas have a limited supply of rental properties, leading to fierce competition and potentially higher prices. Young professionals are drawn to urban living, and Hiroshima's vibrant lifestyle and entertainment options make it a top choice.
As more young people move to Hiroshima, the demand for rental properties is expected to grow. The city's appeal is not just about jobs; it's also about the lifestyle it offers. Hiroshima's vibrant culture and amenities are a big draw for those seeking a dynamic urban experience.
With these factors in play, it's no surprise that Hiroshima's rental market is heating up. The combination of job opportunities, lifestyle, and limited housing supply is creating a perfect storm for rising rental prices. Investors and property buyers should keep an eye on this trend as the city continues to evolve.
Sources: Japan Property, OMFIF, Axross JP
We have made this infographic to give you a quick and clear snapshot of the property market in Japan. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) Demand for rentals near universities in Hiroshima will grow as more foreign students arrive
The influx of foreign students in Hiroshima is set to drive demand for rental properties near universities.
In 2023, Japan experienced a 20.8% increase in foreign students, with many choosing Hiroshima University as their destination. This trend continued into 2024, indicating a growing international student body eager to study in this vibrant city.
Back in 2019, Hiroshima University already had 2,116 international students from 71 countries, and these numbers have only increased. The university is actively working to provide affordable private apartment rentals around the Higashi-Hiroshima Campus, highlighting the need for more off-campus housing options.
The Japanese government's decision to lift COVID-19 travel restrictions in 2022 has further boosted the number of foreign students. This influx naturally leads to a higher demand for housing, similar to trends seen in other Japanese cities like Tokyo and Osaka, which also have high foreign student populations.
Hiroshima's appeal isn't just academic; it's a city rich in history and culture, making it an attractive place for students from around the world. The local real estate market is responding to this demand, with more properties being developed to cater to the needs of these students.
Investors looking at Hiroshima should consider the steady increase in international students as a promising sign for the rental market. With the university's ongoing efforts to accommodate this growing population, the demand for rental properties is expected to remain strong.
Sources: Japan Times, University in Japan, USAC
10) Interest from foreign buyers in Hiroshima's real estate will grow as the city gains global recognition for its cultural heritage
Foreign buyers are increasingly eyeing Hiroshima's real estate market as the city gains fame for its rich cultural heritage.
In 2023, foreign investment in Japan's real estate hit $10.2 billion, with a notable 45% jump in the first half of the year. This boom is largely thanks to the weak yen, making properties more affordable for international buyers.
The Hiroshima Peace Memorial Museum is drawing crowds like never before, with over 1.9 million visitors expected by March 2024. The G7 summit held in Hiroshima played a big role in this surge, as world leaders visited the museum, boosting its global profile.
Hiroshima's government is on the ball with initiatives like online ticket sales to ease museum congestion, which could lure more tourists and real estate investors. The city is also making waves with the opening of the luxury Hilton Hiroshima hotel in October 2022 and the upcoming HIROSHIMA Stadium Park, set to host around 30,000 people.
These developments hint at Hiroshima's growing appeal for international events, which can attract even more foreign visitors and investors. The city's proactive approach to tourism and infrastructure is a magnet for those looking to invest in real estate.
With its cultural allure and strategic initiatives, Hiroshima is becoming a hotspot for foreign buyers eager to tap into Japan's real estate market.
Sources: CBRE, Nippon.com, Japan Property
11) Demand for sustainable homes in Hiroshima will grow due to new tax incentives for eco-friendly properties
New tax incentives for eco-friendly homes in Hiroshima are set to make sustainable properties more appealing.
In Japan, the government is pushing for greener living by extending a special tax-credit system for eco-friendly home improvements until 2025. This means if you upgrade your home with energy-efficient features like better insulation, you could save money, making these homes more attractive to buyers.
The green building market in Japan is buzzing, with a projected growth rate of 9.5% from 2024 to 2030. This boom is thanks to stricter regulations, corporate green pledges, and people becoming more eco-conscious. As folks get more clued up about the perks of sustainable living, the demand for these homes is bound to rise.
More and more buyers are leaning towards eco-friendly homes because they want to live in a way that matches their environmental values. This shift is largely due to a growing awareness of climate change and its effects. Plus, these homes can cut down on utility bills by using renewable energy and smart designs, which is a big win for those watching their wallets.
In Hiroshima, these new tax incentives could be a game-changer, making sustainable homes not just a trend but a smart financial choice. With the government backing these initiatives, it's a great time to consider investing in an eco-friendly property.
As the market for sustainable homes grows, it's clear that eco-friendly living is not just a fad but a forward-thinking lifestyle choice. With the right incentives and growing awareness, Hiroshima could become a hotspot for green living.
Sources: Baker McKenzie, Global Deel, The Madrona Group
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12) Virtual reality tours will become standard in Hiroshima real estate, improving the buying experience
Virtual reality tours are now a must-have in Hiroshima's real estate scene, making the home-buying process much more engaging.
In recent years, 67% of home buyers have expressed a desire for virtual tours when browsing property listings. This growing demand has pushed more real estate agencies to offer these immersive experiences, with many buyers unwilling to consider properties that lack this feature.
Thanks to technological leaps, VR is now more accessible and budget-friendly. The introduction of 5G networks and AI in Japan has significantly boosted VR experiences, cutting down on lag and speeding up data transfer. This means buyers can now enjoy more interactive and tailored virtual tours, checking out homes from afar without a hitch.
Japan's robust internet infrastructure plays a crucial role in supporting VR technology, making it easier for the real estate market to embrace it. Collaborations between real estate firms and tech companies have also sped up the creation of cutting-edge VR solutions, cementing virtual tours as a key part of the industry.
In the Asia Pacific region, including Japan, there's been a noticeable uptick in VR adoption within real estate. This trend mirrors a global movement, with the VR real estate market on track to hit $3.16 billion by 2025.
As VR technology continues to evolve, it's clear that virtual tours are here to stay, offering a new way for buyers to explore properties. Hiroshima's real estate market is at the forefront of this shift, setting a standard that others are likely to follow.
Sources: GlobeNewswire, RocketDriver, PhotoUp, HAR
13) Property values in Hiroshima's suburbs will rise as remote work leads people to seek more space
Remote work is reshaping where people want to live.
With the freedom to work from anywhere, many are choosing to move away from city centers. In Hiroshima, this means a growing interest in suburban areas where people can enjoy more space and comfort. The appeal of larger homes, which can accommodate home offices and provide room for family life, is undeniable.
People are prioritizing space and quality of life over being close to their jobs. This shift is driving more individuals to explore suburban living, where they can find affordable and spacious homes. The trend is clear: suburban areas are becoming the go-to choice for those seeking a better balance between work and personal life.
Real estate experts are noticing this change and predict that property values in suburban Hiroshima will rise. Developers are responding by building communities that offer both tranquility and access to urban amenities. This construction boom is a direct response to the increasing demand for homes that support a remote work lifestyle.
Investors are also taking note, focusing their efforts on these suburban developments. They see the potential for growth as more people look for homes that offer both space and connectivity. The suburban real estate market in Hiroshima is poised for a significant upswing.
As remote work becomes the norm, the desire for spacious living environments will only grow. This trend is reshaping the real estate landscape, making suburban areas more attractive than ever before.
Sources: ET Edge Insights, Tillväxtanalys
14) Demand for eco-friendly homes in Hiroshima will grow as more people become environmentally conscious
The demand for eco-friendly homes in Hiroshima is on the rise as people become more environmentally conscious.
In Japan, there's been a noticeable uptick in the construction of net-zero-energy houses, or ZEH, with companies like Sekisui leading the charge. By March 2024, Sekisui had sold over 83,000 ZEH homes, making it the top seller globally. This trend highlights a growing preference for sustainable housing options.
The market for sustainable building materials is booming, expected to grow annually by 11.2% from 2024 to 2034. This surge is fueled by stricter environmental regulations and a worldwide push for green construction. As these materials gain popularity, they will likely become more common in Hiroshima's housing projects.
Consumer habits are shifting towards eco-friendly choices. A global survey revealed that 78% of people value environmental sustainability, with 63% making lifestyle changes to support it. Millennials are at the forefront, with 75% factoring sustainability into their purchases, which is likely to boost demand for eco-friendly homes in Hiroshima.
Government incentives are crucial in promoting green building practices. Japan's Strategic Energy Plan aims for net-zero energy in new homes by 2030, encouraging the adoption of ZEH standards. These policies align with the increasing demand for sustainable living spaces.
Sources: Japan Times, Transparency Market Research, The Madrona Group
We made this infographic to show you how property prices in Japan compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
15) Interest in traditional Japanese homes in Hiroshima will decrease as modern living becomes more popular
Hiroshima is rapidly urbanizing, and people are leaning towards modern living spaces.
In bustling areas like Hiroshima Shi Naka Ku, there's a noticeable shift as apartments and condos are in high demand. With the city's growing population, these modern homes are becoming the go-to choice for many.
Traditional homes are losing their charm, as seen in the real estate market. Sales of detached houses have dropped by 12.2% in 2023, showing a clear preference for contemporary living spaces.
The Japanese government is nudging homeowners towards modern homes by offering incentives for energy-efficient and earthquake-resistant housing. This makes the sleek, tech-savvy homes more attractive than the old-school ones.
Media outlets are also playing a role, highlighting the perks of modern living, like better amenities and energy efficiency. This buzz is steering people away from traditional homes.
Sources: Global Listings, World Bank Blogs, Global Property Guide
16) Property values in Hiroshima will rise as zoning changes allow more mixed-use developments
Hiroshima is revamping its zoning laws to encourage more mixed-use developments.
Inspired by success stories from cities like Tokyo, Hiroshima is looking to boost property values by allowing more versatile urban spaces. In Tokyo, areas such as Shibuya and Shinagawa have seen significant property value increases after similar zoning changes. This trend is now making its way to Hiroshima, especially around the bustling Hiroshima Station.
Major redevelopment projects are underway near Hiroshima Station, featuring new mixed-use facilities. These projects aim to enhance urban living and attract real estate investors. If Tokyo's experience is any guide, Hiroshima could see a similar rise in property values in these redeveloped areas.
Japan's aging population is also shaping the real estate market, with a growing demand for compact, urban housing close to essential services. In central Tokyo, developments now include senior housing with medical facilities, a trend that could soon influence Hiroshima's growth.
Experts are optimistic about the real estate market's steady growth in urban centers like Hiroshima, driven by both domestic and foreign interest. This stability is expected to support the economic impact of zoning changes, favoring mixed-use developments as a key growth driver.
Sources: Sightline Institute, World Bank, E-Housing Japan, Japan Property
17) Demand for properties in Hiroshima's historic district will rise as cultural tourism grows
Hiroshima's historic sites are drawing more tourists than ever before.
In fiscal 2023, the Hiroshima Peace Memorial Museum welcomed nearly 2 million visitors, with a large number being international tourists. This surge in interest is making properties in the historic district increasingly attractive. The charm of Hiroshima's cultural and historical sites is a magnet for those looking to invest in real estate.
Japan's hotel occupancy rates hit 71.7% in April 2023, showing a clear rise in tourism. This means more people are not just visiting but also staying in places like Hiroshima. Such trends are boosting the allure of properties in the historic district, as more visitors seek unique experiences and accommodations.
The Japanese government is actively promoting cultural tourism, aiming to draw even more visitors by 2025. These efforts, along with increased media coverage of Hiroshima's rich cultural heritage, are spotlighting the historic district. This attention is likely to make properties there even more appealing to both tourists and investors.
As cultural tourism continues to grow, the demand for accommodations and experiences in Hiroshima's historic district is expected to rise. This trend is a promising sign for those considering investing in the area, as properties are poised to become more desirable.
Sources: Mainichi, CoStar, Japan Times
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18) Property values in Hiroshima's flood-prone areas will rise as new flood prevention infrastructure is developed
Hiroshima is investing heavily in flood prevention infrastructure to protect its communities from natural disasters.
Take a look at the Komatsugawa District, where a similar project led to a 34% jump in land prices within the protected area. This is a clear sign that when an area becomes safer, it becomes more appealing to potential buyers.
In Edogawa Ward, flood prevention efforts not only safeguarded the area but also made it a more attractive place to live. The creation of appealing residential and commercial spaces naturally led to increased property values, as people are eager to invest where they feel secure.
Hiroshima is on a similar path, with the government pouring resources into flood control. Given the city's history with flooding, it's likely that property values will rise in areas that were once considered risky.
As these projects wrap up, expect to see a shift in the real estate market. Areas that were previously at risk of flooding will become more desirable, leading to higher property values and increased interest from buyers.
Investing in these areas now could be a smart move, as the infrastructure improvements will likely make them safer and more attractive. Hiroshima's commitment to flood prevention is set to transform its real estate landscape.
Sources: City of Hiroshima, World Bank, MDPI
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.