How much for a property in Japan now?

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

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Japan. If you'd like to learn more about us, you can check our presentation page.

What investment strategy should you choose for Japanese property and how long should you hold it?

Your investment goal determines everything from property type to expected returns in the Japanese real estate market.

For personal residence, focus on 2-3 bedroom condominiums or single-family homes in neighborhoods with good transport links and international schools if you have children. Tokyo's Minato, Shibuya, or Chiyoda wards offer premium living but expect to pay ¥70-100 million for quality properties.

Short-term rental strategies work best in tourist-heavy areas like central Tokyo, Kyoto, or Osaka, where you can achieve gross yields of 5-7% before expenses. However, net yields drop to 2-4% after management fees, cleaning costs, and vacancy periods. The legal landscape for short-term rentals requires careful navigation of local regulations.

Long-term rental properties provide more stable income streams with gross yields of 2.5-4% in major cities, though net yields typically settle at 1-2% after expenses. These properties require less day-to-day management but offer lower returns than short-term strategies.

Buy-to-resell strategies target older properties (20+ years) in prime locations where renovation can add 10-25% in value. This approach requires 2-5 year holding periods and thorough market knowledge to identify undervalued opportunities.

Which property type and condition fits your investment profile best?

Japanese property types each offer distinct advantages depending on your investment goals and budget constraints.

Condominiums (mansions in Japanese terminology) represent the easiest entry point for foreign investors, especially in major cities where building management is professional and transparent. New-build condos require minimal immediate investment but command premium prices of ¥800,000-1.5 million per m² in Tokyo.

Existing condominiums aged 5-30 years offer better value propositions, particularly those built after 1981 when new earthquake safety standards took effect. These properties often trade at 30-50% discounts to new-build equivalents while offering solid rental potential after minor renovations.

Single-family homes provide more space and privacy but require greater due diligence on structural condition and local zoning laws. Houses in suburban Tokyo or regional city centers often offer better value per square meter than central condominiums.

Multifamily properties appeal to serious investors seeking multiple rental units, though they require more intensive management and deeper market knowledge to execute successfully.

It's something we develop in our Japan property pack.

Which Japanese cities and neighborhoods should you target for property investment?

Location selection determines both your initial investment cost and long-term appreciation potential in Japan's diverse real estate markets.

What minimum space and layout requirements should guide your property search?

Space requirements vary significantly based on your intended use and target tenant demographics in Japan's compact urban environment.

Studio and 1-bedroom apartments (20-35 m²) work well for single professionals and short-term rentals, especially in central Tokyo where space comes at a premium. These units typically feature efficient layouts with combined living/sleeping areas and compact kitchenettes.

Two-bedroom properties (40-70 m²) offer the most flexibility for both personal use and rental strategies, accommodating couples, small families, or shared living arrangements. Look for 2LDK layouts (2 bedrooms plus living, dining, kitchen) which are highly sought after in Japanese markets.

Family-sized properties (80+ m²) command higher rents per unit but represent smaller rental pools, making them better suited for personal residence or high-end rental strategies targeting expatriate families with company housing allowances.

Essential features include secure building entry, elevator access for units above the third floor, dedicated parking spaces (crucial outside central Tokyo), and proximity to train stations within 10-15 minutes walking distance.

Should you finance your Japanese property purchase with cash or a mortgage?

Financing decisions impact both your initial investment capacity and long-term returns in the Japanese property market.

Cash purchases eliminate approval delays and strengthen negotiating positions, particularly important in competitive markets where sellers prefer certainty. Foreign investors with cash can move quickly on attractive opportunities without mortgage approval constraints.

Mortgage financing for foreign investors requires meeting specific eligibility criteria including stable Japanese income, residency status, or significant international income documentation. Down payments typically range from 20-35% of the purchase price.

Current mortgage rates in Japan range from 1-2% for fixed-rate loans, making financing relatively attractive compared to many international markets. Loan terms can extend to 35 years, though foreign investors may face shorter maximum terms.

Consider financing even with available cash if mortgage rates remain below expected property appreciation plus rental yields, allowing you to leverage returns across multiple properties rather than concentrating capital in single investments.

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What total budget should you plan for a Japanese property purchase?

Total property acquisition costs in Japan extend well beyond the listing price, requiring careful budgeting for various fees and taxes.

Transaction costs typically add 8-15% to the property purchase price, including stamp taxes (0.1-0.6% of purchase price), registration fees (0.1-0.4%), and real estate agent commissions (3% plus ¥60,000 plus consumption tax).

Consumption tax at 10% applies to new-build properties and some intermediary transactions, significantly impacting total costs for premium new developments. Existing property sales between individuals typically avoid consumption tax.

Insurance costs including fire and earthquake coverage range from ¥50,000-200,000 annually depending on property value and location. Condominium properties include monthly management fees averaging ¥10,000-30,000 for building maintenance and common area upkeep.

Budget an additional 10-20% of purchase price for renovation and furnishing, especially for properties over 15 years old or those targeting short-term rental markets where modern finishes and amenities command premium rates.

What are specific property examples with pricing across different Japanese markets?

Concrete market examples illustrate the range of opportunities available to foreign property investors across Japan's diverse regional markets.

What rental yields can you expect from Japanese properties?

Rental returns in Japan vary significantly between short-term and long-term strategies, with location and property management quality driving performance differences.

Short-term rentals in prime Tokyo locations achieve gross yields of 5-7% annually, though net returns drop to 2-4% after management fees (8-15% of revenue), cleaning costs, platform commissions, and vacancy periods during off-peak seasons.

Long-term rental strategies provide more predictable income streams with gross yields typically ranging from 2.5-4% in major cities, settling at 1-2% net yields after property management, maintenance, and vacancy allowances. Regional cities often offer higher yields but with reduced tenant pools and liquidity.

Management complexity increases significantly with short-term rentals, requiring constant guest communication, frequent cleanings, and compliance with evolving local regulations that vary by ward and city across Japan.

Consider hybrid strategies where properties serve as short-term rentals during peak seasons (cherry blossom, summer festivals, winter sports) while reverting to long-term leases during slower periods to maximize occupancy and revenue.

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 profit potential exists for buy-and-resell strategies in Japan?

Renovation-resale strategies can generate attractive returns in Japan's mature property market, particularly targeting older properties in prime locations with structural integrity but outdated finishes.

Properties built in the 1980s-2000s often trade at significant discounts to replacement costs while offering solid bones for comprehensive renovations. Focus on buildings with good structural conditions and locations where comparable renovated units command premium pricing.

Budget 15-25% of purchase price for comprehensive renovations including modern kitchens, bathrooms, flooring, and systems upgrades. Japanese buyers increasingly value modern finishes and energy-efficient features, creating opportunities to capture this demand through strategic improvements.

Typical resale timelines range from 18 months to 3 years, allowing time for renovation completion and market timing optimization. Capital gains taxes range from 15-30% for properties held less than 5 years, requiring careful profit margin calculations.

Target minimum 20-30% total returns (after renovation costs and taxes) to justify the increased complexity and holding costs compared to rental investment strategies.

How have Japanese property prices and rents changed recently?

Japanese real estate markets have experienced significant growth over the past five years, with accelerating trends in 2024-2025 driven by foreign investment and domestic policy changes.

Tokyo's premium districts have appreciated 15-25% over five years, with 8-12% growth in the past 12 months alone as international investors seek alternatives to Chinese and Hong Kong markets. Central Tokyo condominium prices reached historic highs in 2025.

Osaka and secondary cities have shown more modest but consistent growth of 10-15% over five years and 5-8% annually, benefiting from tourism recovery and domestic migration from more expensive Tokyo markets.

Rental markets have remained relatively stable with slight increases in prime locations, though short-term rental revenues have fluctuated significantly based on tourism patterns and regulatory changes affecting platforms like Airbnb.

Cap rates have compressed in major cities as prices have outpaced rental growth, with Tokyo prime properties now yielding 3-4% gross returns compared to 4-5% five years ago.

What should you expect for future property performance in Japan?

Japan's property market outlook reflects both demographic challenges and urbanization opportunities over different time horizons.

Short-term projections (1-2 years) suggest continued modest growth of 1-3% annually in major cities, though interest rate normalization poses downside risks as the Bank of Japan gradually shifts from ultra-low rate policies that have supported asset prices.

Medium-term outlook (3-7 years) remains positive for urban centers benefiting from ongoing infrastructure investment, tourism growth, and foreign resident increases. Tokyo's redevelopment projects and Osaka's casino resort developments should support property values in surrounding areas.

Long-term considerations (10+ years) include Japan's aging population and rural depopulation, which may cap appreciation in secondary markets while concentrating demand in major urban areas with international connectivity and employment opportunities.

Stress-test investments against 0.5-2% interest rate increases and regulatory changes affecting foreign ownership or short-term rental markets, both of which could impact property values and rental income potential.

How do Japanese property prices compare to other major global cities?

Japan's major cities offer compelling value propositions compared to other international property investment destinations, particularly for investors seeking stability and transparent markets.

Japanese property markets combine lower entry costs than most tier-1 global cities with unrestricted foreign ownership and transparent transaction processes, making them attractive for international investors seeking stable, liquid real estate investments in developed Asian markets.

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.

Sources

1. Real Estate Information Network System (REINS)
2. Ministry of Land, Infrastructure, Transport and Tourism Japan
3. Bank of Japan
4. JLL Japan Property Market Reports
5. CBRE Japan Market Research
6. Kantei Real Estate Price Index
7. Association for Real Estate Securitization
8. Statistics Bureau of Japan