Buying a property in Kyoto: a complete guide

All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article.

Yes, the analysis of Kyoto's property market is included in our pack

Have you ever thought of buying a nice property in Kyoto? You're not alone!

Many people are fascinated by Kyoto's traditional Japanese beauty and dream of owning a historic machiya or a modern townhouse there.

Is it worth investing there, though? Are property prices increasing in Kyoto? What is the current trend? Should I invest in Higashiyama or Arashiyama? What are the taxes? Which places offer rental yields exceeding 7%?

We have the answers.

The BambooRoutes team has thoroughly explored this market. As a matter of fact, we've put all our findings together in a pack. Get it now.

In the lines below, we will share some of this knowledge.

How's the property market in Kyoto?

Is the property market going up or down? Opinions vary. As for us, we don’t listen to rumors. We use up-to-date data and statistics, to ensure our conclusions are well-founded.

Types of properties

In Kyoto, there are various types of properties available for sale, catering to different preferences and needs.

These include traditional Japanese homes, known as "machiya," which feature historic architecture and cultural charm.

Additionally, modern apartments and houses offer contemporary living spaces with amenities.

Some properties may be located within the bustling city center, while others provide a quieter suburban or rural setting, each offering a unique atmosphere.

Whether you're seeking a piece of Kyoto's rich heritage or a modern living experience, there's a diverse range of properties for sale to choose from.

Buy or rent?

(If you're buying for yourself and not to rent out)

If Kyoto is your home or a place you're planning to relocate to, you may be pondering the buy vs. rent decision in this historical city of Japan.

Without a doubt, it's better to buy if you want to invest in a property that will appreciate in value over time.

Want to make a good decision? Check out the property price-to-rent ratio. It's a simple way to gauge the impact of rental earnings on covering the property's cost.

According to Numbeo, the property price-to-rent ratio in Kyoto is around 37.63, which is very high.

It indicates that buying a property is more expensive in the short term compared to renting. However, buying can still be a viable option if you plan to live in Kyoto for an extended period or if you think property values will increase.

Property prices in Kyoto

On average, according to the last data from Ministry of Land, Infrastructure, Transport and Tourism, Japan, purchasing a property in Kyoto would cost you around $4,900 per square meter.

Of course, there are noticeable differences. The value of a square meter for a traditional machiya house in Kyoto might differ from a modern apartment in Gion. We actually offer a more in-depth analysis in our pack for buying property in Kyoto and in Japan.

To give you some context, it is 3.9 times less than the property prices in the center of New York.

Also, housing prices in Kyoto are 40% cheaper than in Tokyo.

The most expensive neighbourhoods in Kyoto are probably Higashiyama and Kita-ku, while the cheapest are probably Ukyo-ku and Fushimi-ku.

Trends

First and foremost, we have to acknowledge that Japan remains, today, a very stable country. The last Fragile State Index that has been reported for this place is 31.

Don't overlook this while weighing the pros and cons of buying a property in Kyoto.

Also, according to the International Monetary Fund, Japan's economy is expected to increase by 4.4% in the coming 5 years, resulting in an average GDP growth rate of 0.9% (it's not much).

If you want to invest in real estate in Kyoto it's a good thing because, usually, when the economy grows, people make more money, and this encourages them to invest in real estate, which drives up the demand and prices for properties.

Also, in Japan, the average GDP per capita has changed by -0.3% over the last 5 years. It's an alarming number.

Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Japan right now.

Buying property in Kyoto

Buying real estate in Kyoto can be difficult due to the lack of reliable and updated information available. That's why we have created the pack to buy property in Kyoto and in Japan.

Buying process

In our pack, we've laid out all the steps involved in the buying process, including the required documents, taxes to be paid, and guidance on finding properties.

Now, we're giving you a more straightforward version to help you grasp the information more easily.

This is the step-by-step process to purchase a property in Kyoto:

1. Research Kyoto's property market and set a budget.
2. Engage a licensed local real estate agent.
3. Visit and inspect properties, considering proximity to cultural sites.
4. Verify the "Koseki Tohon" (family registration) and "Juminhyo" (resident certificate) of the seller.
5. Negotiate the purchase price and terms with the help of the agent.
6. Hire a local lawyer to review the "Juminhyo" and property contract (Joto-irokin).
7. Sign the purchase contract (Keiyaku) and pay a deposit (Shikikin).
8. Secure financing through a Japanese bank or other means.
9. Conduct thorough due diligence on the property's history and any restrictions.
10. Finalize the property transfer (Chukai) at the legal office with the seller and agent.
11. Pay the remaining balance, consumption tax, and registration and acquisition taxes.
12. Register the property at the local Legal Affairs Bureau and obtain the "Juminhyo" to update the new address.

Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Japan.

Make a profitable investment in Kyoto

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Where to find a property

Here are some websites where you can find properties in Kyoto, Japan:

• Housing Japan - Specializes in luxury real estate in Tokyo, offering services for buying, selling, managing, renting, and investing in prime areas.
• Wagaya Japan - Top-tier real estate information website specializing in rental and buying properties in Japan, catering to foreigners and offering a range of services and resources.
• Japan Home Finder - Find your new home in Kyoto.
• Japan Property - Leading real estate portal in Japan, offering a wide range of properties for sale and rent, catering to both domestic and international buyers and investors.
• Real Estate Japan - Provides comprehensive resources for buying, renting, and investing in properties across Japan.

Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Japan.

What you can get

As mentioned before, the average price per sqm in Kyoto is $4,900. A 1-bedroom property with an area of 60 square meters would cost approximately $294,000, and a 2-bedroom with an area of 85 square meters would cost approximately $417,000.

However, the cost of properties will fluctuate depending on both their characteristics and their location.

Nice neighborhoods in Kyoto usually have higher prices. If you're considering Higashiyama, a house could be around $930,000, but an apartment in Gion might be priced at $520,000.

Of course, some regions offer more affordability. You may find a residence in Nishijin for $490,000, or a residence in Fushimi priced only at $310,000.

We give more details about property types and areas in our full pack for buying property in Japan.

Common mistakes

Here are the main pitfalls when buying a property in Kyoto, Japan:

• Heritage preservation rules: Strict regulations to preserve historical properties can limit renovations and affect property usage.
• Tatami flooring maintenance: Traditional tatami floors require special care and replacement, adding to upkeep costs.
• Land lease system: Some properties may have short-term land leases, affecting long-term investment prospects.
• Tsunami risk: Kyoto's coastal proximity raises concerns about potential tsunamis and necessary safety measures.
• Cultural heritage designation: Properties near cultural landmarks may face restrictions on renovations and usage.
• Seasonal rental challenges: Tourism-dependent areas may experience fluctuating demand for short-term rentals.
• Traditional construction materials: Understanding and maintaining traditional building materials can be complex and costly.
• Foreign investment regulations: Restrictions on foreign property ownership may limit investment options for non-residents.

We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.

Everything you need to know is included in our Japan Property Pack

Living in Kyoto

Living in Kyoto is an experience of a lifetime, with its rich culture, stunning scenery, and unique blend of modern and traditional lifestyles.

Cost of living

The cost of living in Kyoto is generally higher than other cities in Japan. However, it is still relatively affordable compared to many other cities in the world.

Here are some examples to better understand the cost of living in Kyoto:

• Monthly rent for a charming machiya in Gion: $1,200-$2,000.
• A bottle of local Kyoto craft beer (e.g., Kyoto Brewing Company): $5-$8.
• Commuting using Kyoto's Eizan Electric Railway: $70-$100/month.
• Admission to the Arashiyama Bamboo Grove: $2-$5.
• A cup of Uji matcha tea at a traditional teahouse in Uji: $8-$12.
• Monthly membership at a Kyoto-based martial arts dojo (e.g., Kendo): $100-$150.
• Fresh seasonal fruits from Nishiki Market for a week: $20-$40.
• Traditional Kyoto-style kimonos rental for a day: $50-$80.

Neighbourhoods

We want to show information in an easy-to-understand way. So, we made a summary table to show the different neighborhoods in Kyoto. For yields, prices and rents, check our property pack.

Life in Kyoto

Kyoto has an economy based on traditional and modern industries. It is known for its traditional handicrafts, manufacturing, and service industries, as well as its high-tech industries such as electronics and biotechnology.

What expats usually like the most in Kyoto is the unique culture and the delicious food. They also enjoy the beautiful temples and shrines, as well as the traditional gardens and shopping streets.

A good point for a property investor - Kyoto has a mass rapid transit system known as the Kyoto Municipal Subway.

Kyoto has good access to healthcare, with a variety of hospitals and clinics providing quality medical services.

Finally, it is worth noting that the Kyoto University ranks among the top 100 universities in the world.

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Renting out in Kyoto

If your intention is to buy a property not for personal use, but to rent it out and create income, then this section is for you.

Long-term

Tenant Profiles in Kyoto

According to the data reported by Wikipedia, the home ownership rate in Japan is 55%, which is not much.

It means that, if you decide to buy and rent out in Kyoto, there will be a significant tenant pool. It's a good thing.

If you decide to buy and rent out to long-term tenants, you should target expats, students, and young professionals, as well as retirees and families. Kyoto is also home to a large number of international students, so targeting them could be a good option too.

Here is a little summary table we've made for you.

Rental yields

As of today, rental yields in Kyoto are floating around 2 or 3%. It's low. Among other things, this low performance can be explained by Kyoto's high cost of living and low population growth, resulting in a low demand for rental properties.

The best rental yields in Kyoto are typically found in properties near major transportation hubs, such as Kyoto Station, as these areas offer convenience and accessibility to a wide variety of amenities and businesses, making them attractive to potential tenants. Additionally, properties near universities and hospitals tend to have higher rental yields as these areas are always in demand from students and medical professionals.

For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.

Finally, be aware that rental incomes in Kyoto are taxed at 20%, which is rather good.

Short-term

You could also decide to rent short-term to tourists visiting Kyoto's many temples and shrines, or to business travelers attending conferences in the city.

If you decide to go with that option, look for properties in the downtown area of Kyoto, such as the Nakagyo-ku and Shimogyo-ku wards, or the central areas of the city, like the Higashiyama and Gion districts.

Currently, there are approximately 3,000 active Airbnb listings in Kyoto, reflecting a highly dynamic and bustling short-term rental market. The average daily rate stands around $155, which is quite high.

You have the opportunity to generate a nice additional income stream then. Based on feedback from online testimonials and data analytics platforms such as AirDNA, Guesty, and Inside Airbnb, people who offer short-term rentals in Kyoto can make around $1800 per month. Also, the average occupancy rate is estimated at 57%.

Is it worth buying real estate in Kyoto then?

Absolutely, buying a property in Kyoto can be a fantastic idea if you're planning to make it your long-term home or if you see it as a long-haul investment. Kyoto's rich cultural heritage, stable economy, and potential for property appreciation make it an enticing option.

Plus, if you're looking for rental income, targeting expats, students, and professionals can be profitable, even though rental yields are relatively low. Additionally, the city's unique culture and lifestyle, with its beautiful temples and traditional gardens, offer an enriching experience for residents.

On the flip side, if you're just planning a short stay or have limited financial resources, renting might be a more practical choice. The upfront costs of buying property in Kyoto can be hefty, and strict regulations on heritage preservation and maintenance costs can be burdensome.

Moreover, if you're concerned about the potential for tsunamis or foreign property ownership restrictions, it's crucial to take these factors into account. In essence, while Kyoto offers an alluring blend of tradition and modernity, the decision to buy property here should align with your long-term goals and financial capacity, so weigh your options carefully before taking the plunge.

Make sure you understand the real estate market in Kyoto

Don't rush into buying the wrong property in Japan. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.

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The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.