Buying property in Japan: is it worth it?

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.

How this content was created 🔎📝

At BambooRoutes, we explore the Japanese real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Tokyo, Osaka, and Fukuoka. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

What are the current average property prices in Japan by region and property type?

Property prices in Japan vary dramatically between urban centers and rural areas, with Tokyo commanding the highest premiums in the country.

In Tokyo's 23 wards, the average house price reaches ¥91.4 million ($653,000), while central wards like Shibuya and Minato can exceed ¥120 million ($860,000). These prices reflect the capital's status as Japan's economic powerhouse and most desirable residential location.

Major regional cities offer more affordable alternatives with substantial savings. Osaka properties average ¥55-57 million ($393,000-407,000), Fukuoka sits at ¥56 million ($400,000), and Sapporo averages ¥51.5 million ($368,000). These cities provide access to urban amenities at roughly half of Tokyo's cost.

Rural areas present the most affordable options, with properties typically ranging from ¥20-25 million ($143,000-179,000). The market also includes "akiya" (abandoned homes) that can sell for under ¥5 million when significant renovation is required.

Condominiums in city centers command premium prices but offer better liquidity, while detached houses in rural zones provide the lowest entry points into the Japanese property market.

How have property prices changed over the past 5 to 10 years across major cities and rural areas?

Japan's property market has experienced a remarkable transformation over the past decade, with urban areas leading a sustained recovery from previous decades of stagnation.

Tokyo has demonstrated exceptional growth momentum, recording a 10.7% year-on-year increase in 2025 and marking its fourth consecutive year of strong gains. This represents one of the most robust urban property booms in Japan's recent history.

Regional cities have followed with more moderate but consistent increases. Fukuoka has achieved impressive 9% annual growth, while Sapporo has maintained steady 5.8% yearly appreciation. These secondary cities have benefited from internal migration and improved economic conditions.

Rural Japan presents the most dramatic shift in this recovery cycle. After decades of declining or stagnant prices, 2025 marked a historic milestone with over half of surveyed rural towns experiencing property value gains for the first time in 33 years, with increases ranging from 1-2.7% nationally.

This rural recovery stems from increased interest in countryside living post-pandemic, government incentives for rural development, and foreign investor interest in affordable Japanese properties.

What are the expected short-term, medium-term, and long-term price trends in the main regions?

Japan's property market outlook varies significantly across different time horizons, with urban areas expected to maintain momentum while rural markets face structural challenges.

Time Period	Urban Areas (Tokyo, Osaka)	Regional Cities	Rural Areas
Short-term (1-2 years)	Continued modest growth 5-8%	Stable growth 3-6%	Selective gains 1-3%
Medium-term (3-5 years)	Moderate growth 3-5% annually	Steady appreciation 2-4%	Mixed performance -1% to +2%
Long-term (10+ years)	Stabilization/plateau 0-2%	Demographic pressure impact	Continued decline risk
Key Drivers	Tourism, weak yen, low rates	Regional economic development	Population decline challenges
Risk Factors	Interest rate changes	Economic policy shifts	Aging population impact

How do rental yields compare across different property types and areas in Japan right now?

Rental yields in Japan show an inverse relationship with property prices, creating distinct opportunities for different investment strategies.

Tokyo delivers the lowest yields at an average of 3.4%, with a range of 2.5-5.2% depending on specific location and property condition. These modest returns reflect the high acquisition costs in the capital but offer potential for capital appreciation.

Osaka provides more balanced returns with yields averaging 4.5-7%, making it attractive for investors seeking both income and reasonable property values. The city's economic revival has supported consistent rental demand.

Fukuoka stands out as Japan's highest-yielding major market, delivering 6-8% average returns with some properties reaching 10%. The city's tech sector growth and university population create strong rental fundamentals.

Sapporo offers moderate yields around 5% (4-5% range), appealing to investors who value stability and lifestyle factors alongside income generation. Rural areas present variable yields of 4-8%, with older houses potentially delivering higher returns but requiring careful tenant management.

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

What are the typical occupancy rates and rental demand for both short-term rentals and long-term leases?

Japan's rental market demonstrates strong fundamentals in urban areas, with occupancy rates and demand patterns varying significantly by location and rental type.

Tokyo and Osaka maintain near-full occupancy rates for modern, well-located apartments, particularly in business districts and areas with excellent transportation links. Smaller units (1-2 bedrooms) show especially robust demand from young professionals and couples.

Regional cities like Fukuoka experience moderate to strong rental demand, particularly near universities, business parks, and tech sector concentrations. Sapporo benefits from consistent demand driven by its stable job market and lifestyle appeal.

Short-term rental markets perform exceptionally well in tourist zones during peak seasons, though Tokyo maintains strict regulations limiting Airbnb-style operations in residential areas. Regional cities offer more flexibility for short-term rental operations.

Long-term lease markets show resilience across all major cities, with average lease durations of 2-3 years providing stable income streams. Rural areas face greater vacancy risks but can achieve higher yields when successfully rented.

How do property taxes, transaction costs, and ongoing maintenance fees impact the real return on investment?

Understanding Japan's comprehensive cost structure is essential for calculating realistic investment returns, as fees can significantly impact profitability.

1. **Property Tax (Fixed Asset Tax)**: 1.4% of assessed value annually - lower than many international markets2. **Acquisition Tax**: 3% of assessed value covering registration and transfer costs3. **Stamp Duty**: Modest fees ranging ¥10,000-¥60,000 depending on property value4. **Real Estate Agent Fee**: Approximately 3% of purchase price plus consumption tax5. **Ongoing Maintenance (Condominiums)**: ¥15,000-40,000 monthly depending on building age, amenities, and location

These costs substantially affect net returns, particularly in lower-yielding markets like Tokyo where a 3.4% gross yield might reduce to 2-2.5% after expenses. Higher-yielding regional markets better absorb these costs while maintaining attractive net returns.

Vacancy periods and property management fees add additional considerations, making thorough financial modeling essential for accurate investment projections.

What is the resale market like in different cities, and how liquid are properties depending on their type and location?

Property liquidity in Japan correlates directly with location desirability and property type, creating clear tiers of marketability.

Tokyo and Osaka offer the highest liquidity for apartments and condominiums, particularly modern units in central locations with good transportation access. These properties typically sell within 3-6 months at market prices.

Fukuoka demonstrates strong secondary market activity for well-located properties, though the market is smaller than Tokyo or Osaka. Properties may require 6-12 months to sell, but pricing remains competitive.

Rural areas present significant liquidity challenges, especially for older detached houses and akiya properties. These assets may require 12+ months to sell and often necessitate price reductions to attract buyers.

Condominiums consistently outperform detached houses in resale markets due to standardized maintenance, shared facilities, and easier financing for buyers. Land plots offer the lowest liquidity but potential for future development opportunities.

Foreign buyers should prioritize properties in established urban areas if resale flexibility is important to their investment strategy.

How do financing options, interest rates, and down payment requirements affect affordability for foreigners and residents?

Japan's historically low interest rate environment creates favorable financing conditions, though foreign buyers face additional requirements and restrictions.

Current interest rates range from 0.18-0.7% annually, representing some of the world's most affordable mortgage financing. These rates significantly enhance affordability and investment returns for qualified borrowers.

Down payment requirements typically range from 10-20% for residents, but foreign buyers often face higher requirements of 20-30% or more. Some Japanese banks require foreign buyers to maintain local employment or establish business relationships before offering financing.

Non-resident foreign buyers can access mortgages from select Japanese banks, but the approval process is more stringent and may require additional documentation, income verification, and higher down payments.

The low interest rate environment supports higher property values and makes monthly payments manageable, but buyers should consider potential rate increases in long-term investment planning.

Cash purchases remain common among foreign investors, eliminating financing complexities but requiring larger capital commitments.

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 areas offer the best balance between lifestyle and profitability for property investment?

Finding the optimal balance between lifestyle appeal and investment returns requires careful consideration of personal priorities and market fundamentals.

For residents prioritizing lifestyle, Tokyo, Kyoto, and Yokohama offer exceptional cultural amenities, dining, entertainment, and international connectivity, though at the cost of lower rental yields and higher acquisition prices.

Investors focused purely on profitability should consider Fukuoka, Sapporo, and select regional cities that deliver 5-8% rental yields while maintaining reasonable property values and good tenant demand.

Areas achieving the best lifestyle-profitability balance include parts of Osaka, Kobe, and suburban Tokyo zones that offer urban conveniences with more reasonable pricing and better yield potential than central districts.

Sapporo presents unique appeal for those valuing seasonal recreation, clean environment, and moderate living costs while generating respectable 5% rental yields.

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

What budget ranges make the most sense for each use case: living, renting out, or reselling?

Budget allocation should align closely with investment objectives, time horizon, and risk tolerance to maximize success in Japan's diverse property market.

Use Case	Optimal Budget Range (Million ¥)	Property Focus	Target Areas
Primary Residence	50-70	Urban condos/outer ward houses	Tokyo suburbs, Osaka, Fukuoka
Rental Income Focus	20-45	Regional apartments/detached houses	Fukuoka, Sapporo, regional cities
Capital Appreciation	75-120+	Central Tokyo/Osaka condos	Prime urban districts
Diversification/Entry	15-30	Rural houses/akiya properties	Countryside, small towns
Balanced Investment	40-60	Suburban apartments/houses	Growing regional centers

Which property types offer the best opportunities now and in the near future?

Different property types serve distinct investment strategies, with current market conditions favoring specific categories over others.

Condominiums in major cities represent the safest choice for capital appreciation and liquidity, offering standardized maintenance, professional management, and easier resale processes. These properties benefit most from urban growth trends.

Detached houses in rural and outer suburban areas provide affordability and higher rental yields but carry risks of slower resale markets and potential vacancy periods. These suit investors comfortable with property management responsibilities.

Land plots offer the lowest liquidity and most uncertain short-term returns but provide potential for future development opportunities as Japan's economy evolves. These require long-term investment horizons and substantial market knowledge.

Older properties and akiya houses present unique opportunities for investors willing to undertake renovations and navigate more complex transactions. These can deliver exceptional yields but require local expertise and renovation budgets.

As of September 2025, modern condominiums in growth cities like Fukuoka and developing areas of Tokyo/Osaka offer the best combination of appreciation potential and rental income.

If you were to buy today, where should you position yourself in terms of area, budget, and property type depending on your main goal?

Strategic positioning in Japan's property market requires clear goal definition and understanding of current market dynamics to maximize investment success.

For primary residence purposes, central Tokyo or Yokohama condominiums in the ¥50-70 million range offer excellent lifestyle benefits, modern amenities, and proximity to business districts and transportation hubs, though with lower rental yield potential.

Income-focused investors should target Fukuoka, Osaka, or Sapporo mid-market apartments in the ¥30-50 million range, capturing 5-8% rental yields while maintaining reasonable property values and strong tenant demand fundamentals.

Capital appreciation strategies work best with central Tokyo or major Osaka redevelopment areas, requiring ¥75-120 million budgets but offering potential for sustained value growth and premium market positioning.

Diversification and low-entry strategies can utilize rural or semi-urban properties under ¥30 million, including akiya houses that provide high yield potential but require careful due diligence regarding liquidity and renovation requirements.

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. Average House Price Japan - BambooRoutes Analysis
2. How Much is a House in Japan - E-Housing
3. Average Rent Japan - BambooRoutes Research
4. Japan Property Market Update - Kyodo News
5. Real Estate Japan Investment Opportunities 2025
6. Japan Property Price History - Global Property Guide
7. Buying House Japan Insights - Expatis
8. Japan Real Estate Statistics - Federal Reserve Economic Data