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Japan's rental property market offers yields ranging from 3.4% in central Tokyo to 8% in regional cities like Fukuoka as of September 2025.
Regional cities consistently outperform Tokyo in terms of rental returns, with Fukuoka leading at 6-8% yields, while Tokyo's premium locations average 3.4% due to high purchase prices. Studio apartments near universities and transport hubs deliver the strongest cash yields across all markets.
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Japan's rental yields in major cities range from 3.4% in central Tokyo to 8% in Fukuoka, with regional cities offering better returns than the capital.
Studio apartments and properties near universities consistently produce the highest yields, while infrastructure projects like Osaka's World Expo 2025 are boosting rental demand.
| City | Average Yield | Price per sqm | Studio Rent | Population Trend |
|---|---|---|---|---|
| Central Tokyo | 3.4% | ¥4,320,000-¥5,900,000 | ¥100,000-¥120,000 | Stable |
| Osaka | 4.5-6.5% | ¥477,000 | ¥60,000-¥80,000 | Growing |
| Fukuoka | 6-8% | ¥800,000-¥1,000,000 | ¥50,000-¥70,000 | Strong Growth |
| Sapporo | 4-5% | ¥110,800 (land) | ¥45,000-¥65,000 | Growing |
What are the current average rental yields across major Japanese cities like Tokyo, Osaka, Fukuoka, and Sapporo?
Japanese rental yields vary significantly between major cities, with regional centers offering substantially better returns than Tokyo as of September 2025.
Central Tokyo delivers the lowest yields at an average of 3.4%, though this ranges from 2.5% to 5.2% depending on the specific ward. Premium central areas like Minato and Shibuya typically sit at the lower end due to extremely high purchase prices.
Osaka presents more attractive yields ranging from 4.5% to 7%, with an overall city average of 4.5-6.5%. The outer wards and student-concentrated areas consistently outperform central business districts, particularly for studio apartments which can achieve 5-6% returns.
Fukuoka leads the major cities with yields between 6-8% in prime districts, though the city average sits at 4.2%. This disparity reflects the concentration of high-yield opportunities in specific neighborhoods rather than citywide performance.
Sapporo maintains steady yields of 4-5% citywide, with central Chuo-ku wards averaging 4.25% compared to 3.86% in suburban areas. The city's tourism-driven short-term rental market can push yields higher in strategic locations.
How do rental yields differ between central wards and suburban areas within those cities?
Central wards consistently deliver lower yields than suburban areas across all major Japanese cities due to premium purchase prices that outpace rental premiums.
In Tokyo, central wards like Chiyoda, Minato, and Shibuya average 2.5-3.5% yields, while outer wards such as Katsushika, Adachi, and Edogawa can reach 4.5-5.2%. The price differential is substantial—central Tokyo properties cost ¥4.32-5.9 million per square meter versus ¥2-3 million in outer areas.
Osaka shows a similar pattern where central Namba and Umeda districts yield 3.5-4.5%, while outer wards like Sumiyoshi and Higashisumiyoshi can achieve 6-7%. Student areas near universities particularly outperform, especially for studio apartments targeting the rental market.
Fukuoka's central Tenjin and Hakata districts maintain 6-8% yields despite higher prices, while suburban areas drop to 4-5%. This unusual pattern reflects the city's compact size and strong central rental demand from its growing tech sector.
Sapporo exhibits the smallest central-suburban yield gap, with central areas at 4.25% versus 3.86% in suburbs. The city's relatively affordable central real estate allows investors to capture both location premium and decent yields.
What is the typical purchase price per square meter for apartments or houses in these high-yield locations?
Purchase prices per square meter vary dramatically between Japanese cities, with Tokyo commanding premium prices that directly impact yield calculations.
| City | Central Area Price/sqm | Suburban Price/sqm | Yield Impact |
|---|---|---|---|
| Central Tokyo | ¥4,320,000-¥5,900,000 | ¥2,000,000-¥3,000,000 | Lower yields centrally |
| Osaka | ¥477,000 | ¥350,000-¥400,000 | Moderate price spread |
| Fukuoka | ¥800,000-¥1,000,000 | ¥600,000-¥750,000 | Compact price range |
| Sapporo | ¥110,800 (land only) | ¥80,000-¥100,000 (land) | Affordable across city |
Tokyo's astronomical central prices of ¥4.32-5.9 million per square meter make it the most expensive market, explaining why yields compress to 3.4% despite strong rental demand. Suburban Tokyo properties at ¥2-3 million per square meter offer better yield potential.
Osaka's ¥477,000 per square meter average represents excellent value compared to Tokyo, enabling the higher yields of 4.5-6.5%. The city's lower acquisition costs allow rental income to generate meaningful returns on invested capital.
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What are the average monthly rents in these same areas, and how stable have they been over the last three years?
Monthly rental rates across Japanese cities have remained relatively stable with modest growth in regional markets over the past three years.
Tokyo studio apartments command ¥100,000-¥120,000 monthly, while family units in central wards reach ¥250,000-¥380,000. These rates have held steady since 2022, with minimal fluctuations despite inflation pressures elsewhere in the economy.
Osaka offers more affordable rents with studios at ¥60,000-¥80,000 and 2LDK family units ranging ¥120,000-¥200,000. The city has experienced 3-6% annual rent increases over the past three years, driven by population growth and business district expansion.
Fukuoka maintains competitive rental rates with studios at ¥50,000-¥70,000 and family units at ¥100,000-¥150,000. The city has seen consistent 4-5% annual rent growth, supported by its expanding technology sector and university populations.
Sapporo's rental market features studios and 1LDK units at ¥45,000-¥65,000 monthly. Tourism recovery has supported 2-3% annual rent increases, particularly in central areas and properties suitable for short-term rentals.
Which types of properties—studio apartments, family units, or multi-tenant buildings—are producing the strongest yields right now?
Studio apartments consistently deliver the highest rental yields across all Japanese cities, particularly those located near universities and major transport hubs.
Studio apartments achieve yields of 5-6% or higher in regional cities, with Osaka studios near universities reaching the upper end of this range. The strong demand from students, young professionals, and short-term residents creates reliable occupancy with premium rental rates relative to property size.
Multi-tenant buildings and properties configured for short-term rentals through platforms like Airbnb generate competitive returns, especially in tourist-heavy areas. Osaka Airbnb properties maintain 83% occupancy rates with most units booked over 300 nights annually, while Fukuoka achieves 84% occupancy.
Family units (3-4 bedrooms) in regional cities like Fukuoka and Sapporo can exceed 5% yields, though they require higher initial capital and longer vacancy periods between tenants. These properties work best in areas with corporate housing demand or international school communities.
Single-family houses generally produce lower yields due to higher maintenance costs and management requirements, though they can work in specific suburban markets with strong family rental demand. The yield advantage typically doesn't justify the additional complexity for most investors.
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How do occupancy rates and vacancy periods compare across these cities?
Occupancy rates remain strong across major Japanese cities, with regional centers often outperforming Tokyo due to more favorable rent-to-income ratios.
Osaka leads in occupancy performance with Airbnb properties achieving 83% occupancy and most rental units staying occupied for 300+ nights annually. The city's diverse economy and growing international business presence creates consistent tenant demand across property types.
Fukuoka maintains excellent occupancy at 84% for short-term rentals and similarly strong performance for traditional rentals. The city's expanding tech sector and multiple universities ensure steady tenant turnover with minimal vacancy periods.
Tokyo central areas experience short vacancy periods due to high demand, but suburban locations can face longer gaps between tenants. The extreme rental costs in central Tokyo actually work against occupancy as they price out many potential renters.
Sapporo shows seasonal variation with peak occupancy during tourist seasons and university terms. Central areas maintain strong year-round occupancy, while suburban properties may experience longer winter vacancy periods when tourism drops.
What are the ongoing costs of ownership such as property tax, management fees, and maintenance in these markets?
Property ownership costs in Japan are relatively standardized across cities, though management fees can vary based on building age and location.
Property tax applies at 1.4% annually on assessed property value nationwide, regardless of city or property type. This rate has remained stable and represents a predictable ongoing expense for yield calculations.
Management fees for apartments typically run ¥300-¥400 per square meter monthly across all major cities. A 25-square-meter studio would cost ¥7,500-¥10,000 monthly, while a 50-square-meter family unit runs ¥15,000-¥20,000 monthly.
Maintenance expenses generally consume 0.5-1.0% of property value annually, covering routine upkeep, repairs, and building systems. Older buildings tend toward the higher end of this range, while newer constructions require less maintenance spending.
Condominium properties include mandatory repair and reserve fees that vary by building but typically add ¥5,000-¥15,000 monthly depending on unit size and building amenities. These fees cover major repairs, elevator maintenance, and common area improvements.
How have rental yields in Japan changed over the past five years, and what are the current trends?
Japanese rental yields have shown divergent trends over the past five years, with Tokyo yields compressing while regional cities have maintained or improved their returns.
Tokyo yields have declined from 4-5% in 2020 to the current 3.4% average as property prices outpaced rent growth. The capital's price appreciation has been driven by international investment and limited supply, creating a yield compression that continues into 2025.
Regional cities like Fukuoka and Sapporo have seen yield improvements due to population growth, tourism recovery, and economic diversification. Fukuoka's technology sector expansion has supported both rental demand and property values in a balanced manner that maintains attractive yields.
Osaka has benefited from infrastructure investment and upcoming events like the 2025 World Expo, which have boosted rental demand while keeping property prices reasonable compared to Tokyo. This has sustained the city's 4.5-6.5% yield range.
The overall trend shows a two-tier market developing, where Tokyo becomes increasingly focused on capital appreciation while regional cities offer superior cash flow returns. This divergence is expected to continue through 2025 and beyond as Japan's economy becomes more distributed.
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.
Which cities or regions are seeing population growth that supports rental demand, and which are declining?
Population trends across Japanese cities create clear winners and losers for rental property investment, with technology hubs and regional centers showing the strongest growth.
Growing markets include:
• Fukuoka leads population growth among major cities, driven by its expanding technology sector, major universities, and government initiatives to attract startups
• Osaka continues attracting residents through business district development, international connectivity, and infrastructure improvements ahead of the 2025 World Expo
• Sapporo benefits from urban migration within Hokkaido, tourism industry growth, and its status as the region's economic center
• Select Tokyo wards like Minato, Chiyoda, and Shibuya attract international residents and young professionals despite high costs
Tokyo shows mixed trends with some inner wards experiencing slight population decline while others grow, creating opportunities in specific neighborhoods rather than citywide growth. The overall metropolitan area remains stable with ongoing internal migration between districts.
Rural and smaller regional areas face population decline, making them unsuitable for rental investment despite low property prices. These markets lack the economic drivers necessary to sustain rental demand over time.
What government regulations, tax incentives, or restrictions affect foreign investors in these areas?
Foreign investors face minimal legal restrictions in Japanese real estate markets, though practical challenges exist around financing and short-term rental regulations.
Property ownership carries no legal restrictions for foreigners, allowing full ownership rights identical to Japanese citizens. This includes the right to buy, sell, rent, and modify properties without government approval or partnership requirements.
The Minpaku Law governs short-term rentals and Airbnb operations, requiring local registration and compliance with safety regulations. Each city implements these rules differently, with some areas restricting short-term rentals to specific zones or limiting operating days to 180 per year.
Tax treatment offers no special incentives for foreign investors, but also imposes no penalties. Standard property taxes, income taxes on rental income, and capital gains taxes apply equally regardless of investor nationality.
Mortgage access remains limited for non-resident foreigners, with most purchases requiring cash or financing from international sources. Japanese residents with stable income can access domestic mortgages at favorable rates of 0.6-2.0% annually.
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What are the projected yields after factoring in financing costs, exchange rates, and inflation?
Net yields after financing and currency considerations remain attractive for regional Japanese cities, particularly given favorable yen exchange rates since 2023.
Domestic financing for qualified investors at 0.6-2.0% annual rates allows leveraged returns in regional markets. Assuming 50% loan-to-value financing, net yields in cities like Fukuoka and Osaka commonly range 2-5% after debt service.
Exchange rate benefits have improved returns for foreign investors, with the yen's weakness since 2022 creating acquisition opportunities. Properties purchased in 2023-2025 benefit from favorable entry prices when measured in other major currencies.
Inflation impacts remain minimal in Japan compared to other developed markets, helping preserve real returns on rental income. Japan's low inflation environment means rental increases don't need to chase rapidly rising costs.
Cash investors in regional cities can expect net yields of 4-6% after all expenses, property taxes, and management fees. Tokyo investments typically deliver 2-3% net yields, emphasizing capital appreciation over cash flow for most investors.
Where are upcoming infrastructure projects or developments likely to boost rental demand and yields in the near future?
Major infrastructure projects across Japanese cities are creating clear hotspots for rental property investment through 2025 and beyond.
Osaka's 2025 World Expo represents the largest catalyst, with massive infrastructure upgrades in transportation, business districts, and tourism facilities. The northern wards and central areas near expo sites are experiencing increased rental demand and property appreciation.
Sapporo's central Chuo-ku district benefits from ongoing urban renewal projects, new rail connections, and tourism infrastructure development. The city's compact size means these improvements impact rental markets citywide rather than just specific neighborhoods.
Fukuoka's technology cluster development includes new business parks, university expansions, and major redevelopment projects that support rental demand from young professionals and international workers. The city's startup ecosystem continues attracting residents from across Japan.
Tokyo's ongoing infrastructure improvements include new rail lines, district redevelopments, and preparations for increased international business activity. While these don't dramatically alter yields, they support rental demand in specific corridors and business districts.
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.
Japan's rental property market offers attractive yields for investors willing to look beyond Tokyo's premium districts.
Regional cities like Fukuoka, Osaka, and Sapporo deliver superior cash flow returns while benefiting from population growth, infrastructure development, and economic diversification that supports long-term rental demand.
Sources
- Global Property Guide - Japan Rental Yields
- BambooRoutes - Average Rent Japan
- BambooRoutes - Sapporo Property
- BambooRoutes - Osaka Price Forecasts
- BambooRoutes - Average Rental Yield Osaka
- BambooRoutes - Average Rental Yield Fukuoka
- Real Estate Tokyo - Official Land Price 2025
- BambooRoutes - Average Price Per Sqm Osaka
- E-Housing Japan - House Prices Japan
- IQI Global - Japan Real Estate Market