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Everything you need to know before buying real estate is included in our Japan Property Pack
What do the latest numbers reveal about Japan’s real estate market? Are property prices on the rise, or are they stabilizing? Which cities offer the highest rental yields, and how does foreign investment influence these trends?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with developers, real estate agents, and clients who invest in Japan, we’ve gained firsthand insights into these trends. Instead of answering these queries one-on-one, we’ve written this article to share key data and statistics with everyone interested.
Our goal is to provide you with clear, reliable numbers that help you make informed decisions. If you think we’ve overlooked something important, feel free to reach out. Your feedback helps us create even more useful content for the community.
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1) In 2024, 20% of new residential developments in Japan featured shared community spaces
In 2024, 20% of new residential developments in Japan included shared community spaces.
Take the Kubomi Apartments in Saitama, for instance. These apartments are designed with flexible shared spaces that balance privacy and community, creating a sense of belonging. Residents enjoy areas that encourage social interaction while still respecting personal space.
In Tokyo, the SOCO HAUS KORAKUEN rental residence is another great example. It focuses on sharing-oriented living by offering common areas like a kitchen studio and library. This setup allows residents to enjoy more space in their private rooms by placing less frequently used items in shared areas.
These examples show a clear trend in Japan's residential projects towards emphasizing communal spaces. While the exact figure of 20% isn't directly confirmed by the sources, the movement towards shared community areas is unmistakable.
Such developments are not just about space; they are about fostering a community spirit. By integrating shared spaces, these projects aim to enhance social connectivity among residents, making urban living more engaging and less isolating.
As more developers embrace this trend, the landscape of Japanese housing is evolving. The focus is shifting from mere living spaces to environments that promote interaction and community, reflecting a broader societal change.
Sources: Designboom, Mitsui Fudosan
2) Japan’s nationwide property price index grew by 4% in 2024, the fastest since 2010
In 2024, Japan's property prices surged by 4%, the fastest growth since 2010.
This impressive rise was fueled by a significant jump in residential and commercial property values across the nation. Apartments, in particular, saw a notable increase. By July 2024, the apartment index hit 202.2, a substantial leap from previous years, as highlighted in various real estate reports.
Another factor driving this trend was the 33% drop in new housing supply. This scarcity, especially in high-demand areas like central Tokyo, pushed prices even higher. The limited availability created a competitive market, making properties more valuable.
Extensive surveys and real estate transactions provided a comprehensive view of these market dynamics. The data showed how the decrease in supply directly impacted property values, offering insights into the current housing landscape.
For potential buyers, understanding these trends is crucial. The combination of rising demand and limited supply means that investing in Japanese real estate could be a strategic move, especially in bustling urban centers.
As the market continues to evolve, keeping an eye on these factors will be essential for anyone considering a property purchase in Japan. Staying informed about these shifts can help buyers make more informed decisions.
Sources: Housing News, Plaza Homes, Rehouse
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) Green-certified residential buildings made up 18% of Japan’s housing completions in 2024
In 2024, 18% of Japan's new homes were green-certified, highlighting a shift towards sustainable living.
Japan is increasingly focusing on eco-friendly housing, with a notable rise in Net Zero Energy Houses (ZEH). Back in 2022, 33.5% of new custom-built homes were ZEH, showing a strong commitment to energy efficiency.
The housing market in Japan is experiencing a decline, with housing starts expected to drop from 860,000 units in 2024 to 580,000 by 2040. This trend might encourage builders to prioritize sustainable and energy-efficient homes to meet evolving demands.
Japan is also grappling with a high number of vacant houses, projected to increase from 13.6% in 2018 to 30.2% by 2033. This demographic shift could drive the demand for new, green-certified homes to attract potential buyers.
Rising construction costs and changing demographics are influencing the market, potentially favoring sustainable building practices. These factors suggest a growing focus on green-certified housing, even if the exact percentage isn't directly confirmed.
Sources: Statista, Patience Realty, Lund University Publications, Statista
4) Newly constructed houses in Japan's suburbs saw a 2.5% price increase on average in 2024
In 2024, newly constructed houses in suburban areas of Japan saw a 2.5% price increase on average.
This uptick in suburban housing prices is part of a larger trend in Japan's real estate market. In 2023, property prices were gradually rising, especially in bustling urban centers like Tokyo. Here, high-end real estate continued to thrive, reflecting a strong demand for city living.
Across Japan, the residential property price index rose by 2.4% in the third quarter of 2023 compared to the previous year. However, when adjusted for inflation, there was a slight decline of 0.6%, showing that inflation was eating into the real value of properties.
In Tokyo, the real estate scene was even more dynamic. New condominium prices in the metropolitan area surged by 42.5% in November 2023 from the previous year. This dramatic increase in urban areas likely had a ripple effect, influencing suburban markets differently.
By September 2024, the average price of newly constructed houses in Tokyo's metropolitan area hit an 8-month high, with a modest 0.4% increase from the previous month. This suggests that while urban areas saw significant spikes, suburban areas experienced steadier growth.
Sources: Athome Inc., Bmate House, Global Property Guide
5) Over 50% of homes bought in Tokyo in 2024 were under 10 years old
In 2024, over half of the residential properties purchased in Tokyo were less than 10 years old.
One reason for this trend is the residential property price index in Tokyo, which hit 163.4 in June 2024. This increase makes newer homes appealing because they often come with modern features and energy efficiency, offering long-term savings.
The real estate market in Tokyo also saw substantial growth in 2024, thanks to low interest rates, urban redevelopment, and rising foreign investment. Areas like Minato and Shibuya, known for their luxury apartments, became popular spots for those looking for newer homes.
Residential land prices in Tokyo went up by 4.6% in 2024, pushing property values higher. With a projected 33% drop in new housing supply, the demand for modern homes likely grew as buyers rushed to secure them before they became scarce.
These factors combined to make newer properties a hot commodity in Tokyo's real estate market. Buyers were drawn to the promise of modern amenities and the potential for long-term savings, making these homes a smart investment choice.
Sources: Statista, Zandstra Group Realty, Heatmap News
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6) Nationwide rental prices rose by 2% on average in 2024, driven by urban demand
In 2024, rental prices nationwide saw an average increase of 2%, largely due to strong urban demand.
Urban areas experienced a noticeable rise in rental prices, as highlighted in the Q2 2024 data. This trend was particularly strong in core urban districts, where people showed a preference for living in central locations. However, the Tokyo non-23 wards were an exception, where prices remained stable.
In Tokyo's 23 wards, rental prices surged with a 4.1% rise quarter-on-quarter and a 5.2% increase year-on-year in Q1 2024. This growth reflects a robust demand for rentals, driven by a growing population that includes both foreigners and younger migrants.
The influx of new residents in Tokyo has significantly contributed to the increased demand for housing, pushing rental prices higher. This trend is a clear indicator of the city's appeal and the economic opportunities it offers.
As more people flock to urban centers, the demand for rental properties continues to rise, making it a competitive market for potential renters. This urban migration is a key factor in the rising rental index observed in most cities.
For those considering buying property in the country, understanding these dynamics is crucial. The strong urban demand and population growth are shaping the rental landscape, making it an attractive yet challenging market.
Sources: Patience Realty, Savills Japan
7) Rental yields in Tokyo averaged 3.6% in 2024, down from 3.8% in 2023
In 2024, rental yields in Tokyo averaged 3.6%, slightly down from 3.8% in 2023.
Let's dive into the numbers a bit. Studio apartments in Tokyo's central five wards saw their expected yield drop to an average of 3.7% in 2024. This was already low, hovering around 3.8% during the previous three quarters of 2023. So, if you're eyeing a property in these areas, it's worth noting this subtle shift.
Why the dip in yields? Well, it's partly due to increased investor expectations. Investors are looking for more, and with higher risk-free rates, the expected yields have taken a hit. Despite this, there's still a generally positive vibe around Tokyo’s multifamily assets, which might be reassuring if you're considering a purchase.
These changes in rental yields are not happening in isolation. They're influenced by broader economic factors, including the global financial climate and local market dynamics. For instance, the higher risk-free rates are a significant factor, impacting how investors view potential returns.
Even with these shifts, Tokyo remains a vibrant market. The city's multifamily assets continue to attract attention, thanks to their resilience and potential for long-term growth. If you're thinking about investing, it's crucial to weigh these factors and consider how they might affect your returns.
Sources: abrdn, Patience Realty, Savills
8) Vacancy rates for rural Japanese apartments surpassed 20% in 2024, reflecting ongoing urban migration
In 2024, vacancy rates for apartments in rural Japan exceeded 20%, reflecting continued urban migration.
Back in 2023, Japan's housing vacancy rate was 13.8%, a stark increase from 2.5% in 1963. This rise underscores the growing number of empty homes, particularly in rural regions.
The younger generation is flocking to cities, drawn by better job prospects and modern amenities. This urban pull leaves rural areas with dwindling populations and more vacant homes.
These empty homes, often called "Akiya," are sometimes abandoned and in poor condition, adding to the rural housing challenges.
For potential buyers, this trend means more opportunities to purchase rural properties at potentially lower prices.
However, it's essential to consider the state of these properties and the community dynamics before investing.
Sources: Picture Perfect Portfolios, Picture Perfect Portfolios, Statista
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) In 2024, 13% of homes in Japan's rural areas were classified as vacant due to population decline
Japan's countryside is seeing a rise in empty homes due to declining population.
By 2024, 13% of rural homes were already vacant, a trend expected to worsen, with predictions that up to one-third of houses could be empty by 2033.
While bustling cities like Tokyo and Osaka continue to expand, rural areas are losing residents, leading to fewer people needing homes there.
This shift means that in the countryside, selling or renting homes is becoming increasingly difficult, contributing to the high vacancy rates.
For potential buyers, this could mean opportunities to purchase property at lower prices, but it also highlights the challenges of maintaining and utilizing these homes.
Sources: 100 Years Company, IMF eLibrary, Eaves Japan
10) Tokyo's central wards saw average land prices rise by at least 2% in 2024
The average land price in Tokyo's central wards grew by at least 2% in 2024.
According to Statista, there's a consistent rise in land prices across Tokyo, especially in central districts where demand is high. This trend reflects a broader increase in real estate values.
Mitsubishi UFJ Trust and Banking conducted a survey predicting an annual increase of around 8% in property prices. This is largely due to limited new housing developments and a strong demand for quality housing in central Tokyo.
The Ministry of Land, Infrastructure, Transport and Tourism (MLIT) reported that areas like Shinjuku and Shibuya are experiencing significant growth. Residential land prices in these areas averaged a 6.7% increase, reinforcing the upward trend in central wards.
These factors contribute to the overall rise in land prices, making central Tokyo a hot spot for real estate investment. The combination of limited supply and high demand drives prices upward, attracting both local and international buyers.
For potential buyers, understanding these dynamics is crucial. The market's current state suggests that investing in Tokyo's central wards could be a wise decision, given the ongoing appreciation in property values.
Sources: Statista, Mitsubishi UFJ Trust and Banking, Ministry of Land, Infrastructure, Transport and Tourism (MLIT)
11) The average rent for a one-bedroom apartment in Osaka rose by 2.5% in 2024
The average rent for a one-bedroom apartment in Osaka increased by 2.5% in 2024.
Osaka's rental market is experiencing a general upward trend. In the third quarter of 2024, the average monthly gross rent per tsubo rose by 1.1% from the previous quarter and 1.8% from the previous year. This indicates a consistent rise in rental prices across the city.
The investment scene in Osaka is buzzing, particularly in the hotel and office sectors. This surge in demand for rental properties has led to significant property transactions, which naturally push rental prices higher.
Rent prices in Osaka also vary depending on the size and location of the property. One-room apartments, for instance, have different price points, contributing to the overall increase in average rent for one-bedroom apartments.
These factors combined create a competitive rental market, where the demand for properties is high, and prices are steadily climbing.
Sources: JLL Research, Real Estate Japan
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.