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Thinking about buying a 3-bedroom apartment in Shibuya? It’s a vibrant area, but you're probably wondering: is now the right time to buy, or should you wait for prices to drop?
And what about long-term investment—should you look into other wards like Minato or Chiyoda where property values might appreciate more over time?
In this article, we’ll answer these questions. We know this market quite well - and we have put all our knowledge in the Japan Property Pack.
Will property prices increase in Japan in 2025?
No, property prices in Japan are not expected to rise significantly in 2025, due to a combination of demographic challenges and economic uncertainties.
Backed by our fresh, in-depth market analysis, we’re cautious about the outlook for Japan's real estate market, as several factors could hinder price growth.
While there are some positive developments like urban redevelopment projects and government incentives, the overarching issues such as an aging population and potential economic stagnation pose significant challenges.
Japan's property market faces a complex landscape, with regional disparities and varying demand dynamics, making any substantial nationwide price increase unlikely.
Signals pointing to a property price increase in Japan
Here are some factors suggesting prices could increase:
Urban redevelopment projects in major cities like Tokyo and Osaka are expected to enhance the appeal of certain areas, potentially driving up property values in those specific locations.
Government incentives for energy-efficient housing and urban renewal initiatives could stimulate demand for newly developed or renovated properties, supporting price growth in targeted sectors.
The continued influx of foreign investment in Japan's real estate market, particularly in commercial properties, may have a positive spillover effect on residential property prices in key urban areas.
Signals pointing to a property price decrease in Japan
Here are some factors suggesting prices could fall:
Japan's aging population and declining birth rate are leading to a shrinking domestic market, reducing long-term demand for housing and putting downward pressure on property prices.
Economic uncertainties, including potential stagnation and deflationary pressures, could dampen consumer confidence and investment in the real estate market.
Rural and suburban areas are experiencing depopulation, leading to an oversupply of housing and declining property values outside major urban centers.
The potential for rising interest rates could increase borrowing costs, making it more difficult for buyers to finance property purchases, thereby reducing demand.
Japan's strict zoning and land use regulations can limit new housing developments, but they also contribute to regional disparities in property values, with some areas facing oversupply issues.
The ongoing impact of natural disasters, such as earthquakes and typhoons, poses a risk to property values, particularly in vulnerable regions.
The global economic environment, including trade tensions and geopolitical risks, could negatively impact Japan's economy and, by extension, its real estate market.
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If property prices go up in Japan, how much would they increase by?
If real estate prices in Japan were to rise in 2025, the increase would likely be below 3% of their 2024 values.
Typically, real estate in stable, mature markets like Japan appreciates by approximately 0.5% to 3% annually over the long term. However, fluctuations can occur depending on factors such as region, season, and property type.
It means that, if you spot a lovely 2-bedroom apartment in Tokyo for 90,000,000 yen today, don't be surprised if it's priced between 90,450,000 and 92,700,000 yen this time next year.
To give you a better understanding, here is a table that shows 7 types of Japanese real estate properties, their estimated prices in 2024, and projections for 2025 based on potential price increases of 0.5%, 2%, and 3%.
| Type of Property | Average Price in 2024 (¥) | Price in 2025 (0.5% increase) | Price in 2025 (2% increase) | Price in 2025 (3% increase) |
|---|---|---|---|---|
| Traditional Japanese House (60 sqm / 646 sqft) | ¥90,000,000 | ¥90,450,000 | ¥91,800,000 | ¥92,700,000 |
| Modern Apartment (75 sqm / 807 sqft) | ¥120,000,000 | ¥120,600,000 | ¥122,400,000 | ¥123,600,000 |
| Luxury Penthouse (100 sqm / 1,076 sqft) | ¥250,000,000 | ¥251,250,000 | ¥255,000,000 | ¥257,500,000 |
| Studio (30 sqm / 323 sqft) | ¥45,000,000 | ¥45,225,000 | ¥45,900,000 | ¥46,350,000 |
| Loft (80 sqm / 861 sqft) | ¥160,000,000 | ¥160,800,000 | ¥163,200,000 | ¥164,800,000 |
| Townhouse (150 sqm / 1,615 sqft) | ¥350,000,000 | ¥351,750,000 | ¥357,000,000 | ¥360,500,000 |
| Investment Property (50 sqm / 538 sqft) | ¥75,000,000 | ¥75,375,000 | ¥76,500,000 | ¥77,250,000 |
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If real estate prices go up in Japan, which areas are likely to see the biggest increases?
Today, people who want to move to Japan seek a blend of traditional charm and modern conveniences, which Shibuya in Tokyo delivers. Hence, we could see a price increase there in 2025.
Also, lately, there's been a shift toward more youthful, vibrant neighborhoods, and Shimokitazawa has really taken off.
We like it when information is clear and easy to digest. So, here’s a table that highlights the areas where prices might rise the most, along with the reasons behind those expected increases. It’s very high-level. If you want more details on a specific area, please check our real estate pack tailored to the Japanese market.
| Neighborhood | Level of Increase | Why |
|---|---|---|
| Shibuya, Tokyo | High | Recent development of luxury housing projects and its increasing appeal to international buyers as travel normalizes post-pandemic, driving demand. |
| Ginza, Tokyo | High | Expected rise due to limited housing stock, upcoming renovations to heritage buildings, and growing demand for prime properties in central Tokyo. |
| Namba, Osaka | Medium-High | Ongoing gentrification and new transport links, along with several planned redevelopment projects in the area, are likely to push prices higher. |
| Roppongi, Tokyo | Medium | The shift towards hybrid workspaces is driving demand for residential properties near business districts, combined with new mixed-use developments. |
| Kichijoji, Tokyo | Medium-High | Eco-friendly urban projects and recent construction of new schools and parks are increasing its attractiveness for families, pushing prices upward. |
| Asakusa, Tokyo | Medium | Investment in local infrastructure, such as the extension of tram lines and renovation of historic areas, is boosting long-term value. |
| Shimokitazawa, Tokyo | Medium-High | With new cultural and commercial spaces being developed, this trendy neighborhood is seeing increased demand from both residents and investors. |
| Umeda, Osaka | High | Upcoming large-scale urban regeneration projects and improved public transport access are expected to make this area more desirable. |
| Yokohama | Medium-High | Its proximity to Tokyo, along with new office and residential developments, makes it increasingly attractive to professionals seeking more space. |
| Nakameguro, Tokyo | Medium | Gentrification and cultural regeneration projects are attracting new residents, leading to rising prices as the area becomes more fashionable. |
| Minato Mirai, Yokohama | High | As new luxury developments are launched, demand for premium housing among wealthy buyers is expected to further increase property values. |
| Kyoto City Center | High | Upcoming restoration of historic sites and high-profile cultural projects are driving a renewed focus on this central, historic location. |
If I'm looking to invest in real estate, what types of properties should I focus on for the best value appreciation in Japan?
In 2025, Japan's real estate trends focus on tech-smart, energy-efficient apartments, larger suburban homes for families, properties with outdoor spaces, and eco-friendly buildings—all driving higher demand and prices. Here is a summary.
- Tech-Equipped and Energy-Efficient Apartments:
Driven by remote work and sustainability trends, these homes offer smart technology features and energy-saving systems. They cater to young professionals and tech workers, making them a hot commodity in 2025, especially in tech hubs like Tokyo and Osaka.
- Family-Sized Apartments in Suburban Areas:
With a growing demand for larger living spaces, especially among families, suburban areas near major cities like Tokyo and Yokohama are seeing increased interest. Proximity to green spaces, schools, and efficient public transport is a major factor driving value.
- Properties with Outdoor Spaces:
Post-pandemic, outdoor spaces like terraces, balconies, or gardens have become highly desirable. In dense cities like Tokyo, these features offer a much-needed escape and are likely to drive up property values.
- Eco-Friendly Buildings with Low Carbon Footprints:
Japan's commitment to sustainability is boosting demand for eco-certified buildings. Buyers are increasingly valuing properties that align with the country's green goals, leading to price appreciation in this category.
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