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What will happen in Kyoto’s real estate market? Will prices go up or down? Is Kyoto still a hotspot for foreign investors? How is Japan’s government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with local real estate agents, property developers, and clients who buy properties in Kyoto, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
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1) Property values in Kyoto's traditional neighborhoods will rise as more foreign buyers show interest
Foreign buyers are increasingly targeting Kyoto's traditional neighborhoods, driving up property values in those areas.
In 2023, 203 properties in Kyoto were snapped up by foreign individuals or entities, showing a clear surge in international interest. This trend is particularly strong in areas like Gion and Arashiyama, known for their rich cultural and historical significance. These neighborhoods boast traditional architecture, and with limited land available for new developments, property prices are climbing as demand stays high.
Kyoto's unique charm lies in its blend of history and modernity, making it a magnet for international buyers. Traditional-style homes equipped with modern amenities are especially in demand. Real estate agents in Kyoto have noticed a spike in inquiries from abroad, further underscoring the growing interest in the city's real estate market.
Media coverage has played a role in highlighting Kyoto's appeal, emphasizing its cultural allure and the scarcity of available properties. This has made Kyoto a hot spot for those looking to invest in a piece of Japan's heritage. The city's traditional neighborhoods are not just about owning property; they offer a lifestyle steeped in history and culture.
For those considering a purchase, it's worth noting that Kyoto's property market is becoming increasingly competitive. The limited supply and high demand mean that prices are likely to continue rising. This makes it an attractive option for investors looking to capitalize on the city's growing popularity.
As more foreign buyers enter the market, Kyoto's traditional neighborhoods are set to see even more interest, potentially driving property values even higher. This trend is reshaping the real estate landscape in Kyoto, making it a prime location for international investment.
Sources: Asia Fund Managers, Kyodo News, E-Housing
2) Property prices in Kyoto's Nakagyo ward will rise steadily because of its lively cultural and commercial scene
Nakagyo ward in Kyoto is buzzing with cultural and commercial activities, making it a prime spot for property investment.
With 75.18 million visitors in 2023, tourism in Kyoto is booming, even surpassing pre-pandemic levels. This surge is especially noticeable in central areas like Nakagyo, drawing more tourists and sparking interest in property investments.
Nakagyo's charm lies in its vibrant cultural scene, hosting events that captivate both locals and tourists. Its central location is perfect for these activities, making it a sought-after area for those looking to invest in property.
The ward is also seeing a wave of new businesses and commercial developments, particularly around Karasuma-Shijo. This area is becoming more desirable due to its closeness to major shopping districts and public transport hubs.
Government investments in infrastructure and public transport are further boosting Nakagyo's appeal. These improvements are enhancing the ward's long-term value, making it an attractive option for property buyers.
Sources: Average Listing Price of Resale House in Kyoto by Ward, Kyoto Pref. Visitor Numbers in 2023 Exceed Pre-Pandemic Level, 2025 Japan Property Market Insights
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.
3) Kyoto’s property prices will keep rising as it stays a cultural and educational center
Kyoto's charm as a cultural and educational hub keeps housing demand strong.
With its universities and tech companies, Kyoto attracts students and professionals, boosting the need for homes. The city also focuses on housing for foreign researchers and students, making it a hotspot for expatriates seeking accommodation.
Land for new developments is scarce, especially in central and historic areas, which pushes property prices up. Historical preservation laws limit new construction, making traditional properties like machiya in well-preserved areas even more valuable.
There's a growing fascination with Kyoto's traditional architecture and lifestyle. Both locals and foreigners crave authentic Japanese living experiences, and the tourism boom fuels the short-term rental market, driving up property values in tourist hotspots.
Government efforts to promote Kyoto as a global city are paying off, supporting property price growth. By preserving cultural heritage and enhancing urban infrastructure, Kyoto becomes more appealing to buyers. Rising property values in cities like Tokyo and Osaka also positively influence Kyoto's market, hinting at continued appreciation.
Overall, residential property prices in Kyoto will keep increasing as the city remains a cultural and educational hub.
Sources: Kyoto Prefecture, World Bank, Global Property Guide
4) Property values in Arashiyama will rise as eco-tourism and nature-focused living become more popular
The Arashiyama area is set to see a rise in property values as eco-tourism and nature-focused living gain popularity.
In 2023, Kyoto welcomed a staggering number of tourists, with around 4.91 million visitors in March alone. Many were drawn to eco-tourism activities, which are expected to flourish in Arashiyama thanks to its stunning natural landscapes and rich cultural heritage. This influx of visitors is a clear sign that the area is becoming a hotspot for those seeking a more sustainable and nature-oriented lifestyle.
The demand for nature-focused accommodations is on the rise, largely due to Kyoto's commitment to preserving its cultural heritage while promoting sustainable tourism. This has sparked a high demand for traditional-style homes equipped with modern amenities and eco-friendly features, attracting both local and international buyers who are keen on investing in properties that offer a blend of tradition and sustainability.
Moreover, the Kyoto Tourism Promotion Plan 2025 is set to further enhance sustainable tourism efforts. This plan includes initiatives that encourage eco-friendly practices, which are likely to boost property values in areas like Arashiyama, where sustainability is a central theme. The plan's focus on eco-friendly tourism aligns perfectly with the growing interest in nature-focused living, making Arashiyama an attractive option for potential property buyers.
Arashiyama's appeal is not just limited to its natural beauty; it also offers a unique cultural experience that is deeply rooted in Kyoto's history. This combination of nature and culture makes it a prime location for those looking to invest in a property that offers both a serene environment and a rich cultural backdrop. As more people seek out these qualities, the demand for properties in Arashiyama is expected to rise, further driving up property values.
With eco-tourism and sustainable living becoming increasingly popular, Arashiyama is well-positioned to benefit from these trends. The area's commitment to sustainability, combined with its natural and cultural attractions, makes it an ideal location for those looking to invest in a property that aligns with their values and lifestyle preferences.
5) Kyoto’s average property prices will drop slightly as more affordable housing projects increase supply
Kyoto is ramping up efforts to boost affordable housing options.
With initiatives like "tokkochin housing" and partnerships with private developers, the government aims to provide more homes for middle-class and low-income families. This isn't just a local trend; cities worldwide have seen property prices stabilize or even dip when housing supply increases. Take Tokyo, for instance, where a rise in housing availability has helped keep prices in check.
In Kyoto, the expected surge in affordable housing could cater to a wider range of buyers, potentially easing the pressure on higher-end property prices. As more people find affordable options, the demand for pricier properties might decrease. This shift is particularly relevant given Kyoto's aging population and urbanization trends, which are driving a need for diverse housing types.
These changes could lead to a slight decrease in average property prices as the supply grows. The city's efforts are not just about numbers; they're about meeting the evolving needs of its residents. With more affordable housing, Kyoto is positioning itself to accommodate a broader demographic, which could have a ripple effect on the entire property market.
For potential buyers, this means more options and possibly better deals. As the market adjusts to these new developments, it's an exciting time to consider investing in Kyoto. The city's blend of tradition and modernity, coupled with these housing initiatives, makes it a unique place to call home.
Sources: E-Housing Japan, Kyoto Prefecture, Rabobank
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6) Property prices in Kyoto's outskirts will rise gradually as more people move to suburban areas
The outskirts of Kyoto are becoming increasingly popular as more people seek suburban living.
With the rise of remote work, people are now able to live further from their workplaces, making suburban areas more appealing. Kyoto's compact city layout and easy access to natural landscapes offer a perfect blend of urban convenience and nature, attracting those who want the best of both worlds.
As property prices in central Kyoto soar, buyers are turning to the outskirts for more affordable options. Areas like Gion and Shijo-Kawaramachi are expected to see significant price hikes, pushing more people to consider suburban living. The extension of tram lines and other transportation improvements make commuting from the suburbs to the city center easier, adding to the appeal of these areas.
Demographic changes are also influencing this trend, with younger families moving to the suburbs in search of larger homes. New amenities and services, such as eco-friendly projects and schools, make suburban areas more attractive to families. Real estate market analyses suggest that the demand for larger living spaces and greener environments will continue to drive growth in suburban property values.
Source: Digital Nomad Exchange
7) Property values in Sakyo ward will drop as its distance from central Kyoto becomes less appealing to commuters
With the rise of remote work, fewer people need to commute long distances, making areas like Sakyo ward less attractive for commuters.
Transportation costs are climbing across Japan, and while we don't have specific numbers for Kyoto, the trend is clear: people are less willing to spend more on commuting. This shift could make outer wards like Sakyo less desirable.
In 2023, many people showed a strong preference for living closer to their workplaces. The desire for hybrid work or working from home is pushing more folks to central areas, which might reduce demand for properties in Sakyo.
Central Kyoto is becoming more appealing due to increased investment in infrastructure and amenities. The city's focus on enhancing urban infrastructure and preserving cultural heritage is likely to attract more residents and businesses to central areas.
As central Kyoto becomes more vibrant, the appeal of Sakyo ward may diminish. The convenience and lifestyle offered by central areas are drawing people away from the outskirts.
With these changes, Sakyo's distance from central Kyoto is becoming less desirable for those who once commuted daily.
Source: Remote Work Statistics
8) Property prices in Yamashina will rise because it's close to both Kyoto and Osaka
Yamashina ward is gaining popularity because it's perfectly situated between Kyoto and Osaka.
With excellent transport links, residents find it easy to commute to both cities, making Yamashina a hot spot for homebuyers. This convenience is a major reason why property prices are on the rise here.
Central Kyoto's property prices have skyrocketed, pushing buyers to look for more affordable options. Yamashina offers a sweet spot with its suburban charm and easy access to urban life, attracting those who want the best of both worlds.
Yamashina's transportation infrastructure has seen some serious upgrades. New public transport links and better roads have made the area more accessible, which is a big draw for both residents and investors. This improved connectivity is a game-changer for property values.
Living in Yamashina means you can enjoy a quieter suburban life without sacrificing the perks of city living. The area's strategic location and enhanced transport options make it a smart choice for those looking to invest in property.
Sources: Heritage Homes Japan, Global Property Guide
We made this infographic to show you how property prices in Japan compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
9) Luxury rental yields in Kyoto will drop as high-end tenants look for cheaper options
Kyoto's luxury rental market is seeing some shifts that might affect rental yields.
One big issue is the rising vacancy rates in luxury rentals. When you see more empty apartments, it usually means fewer people are interested in renting them. This can be a sign that demand is dropping, which isn't great news for landlords.
There's also been a boom in the construction of luxury apartments in Kyoto. With too many high-end places popping up, it can lead to an oversupply. More apartments than renters often means landlords have to lower prices to fill those spaces.
On top of that, the rise of short-term rental options like Airbnb in Kyoto is giving people more flexible and often cheaper alternatives. This trend is pulling potential tenants away from traditional long-term luxury rentals, as they opt for these more affordable choices.
For those considering buying property in Kyoto, it's worth noting these dynamics. The market is shifting, and understanding these trends can help you make a more informed decision.
Sources: Real Estate Japan, Airbtics
10) Rental yields in Kyoto's university areas will rise as student numbers grow
Rental yields in Kyoto's university districts are set to rise as student numbers continue to grow.
Kyoto University, a major player in the city's educational scene, saw its enrollment hit 22,455 students in 2023, and this upward trend is expected to persist. This surge isn't just from local students; international students are increasingly choosing Kyoto for its prestigious institutions. As more students flood in, the demand for housing naturally spikes, pushing rental prices higher.
Neighborhoods like Gion and Shijo-Kawaramachi are already experiencing this shift. These areas are not only popular among students but are also seeing rising rental prices due to high demand and limited housing options. This makes them prime spots for property investors eager to tap into the growing student market.
For those considering investing in Kyoto's real estate, understanding these dynamics is crucial. The combination of a booming student population and limited housing supply means that rental properties in these districts are becoming increasingly valuable. Investors can expect to see solid returns as the student influx continues.
Moreover, the appeal of Kyoto's universities extends beyond academics. The city's rich cultural heritage and vibrant lifestyle make it an attractive destination for students worldwide. This cultural allure further fuels the demand for housing, as students seek to immerse themselves in Kyoto's unique environment.
In summary, the growing student population in Kyoto is a key driver of the real estate market, particularly in university districts. With more students arriving each year, rental yields are likely to keep climbing, offering lucrative opportunities for savvy investors.
Sources: Times Higher Education, EduRank, Kyoto University Facts and Figures
11) Rental yields in Kyoto's suburbs will drop as more properties are offered for long-term leases
Suburban areas of Kyoto are experiencing a boom in new housing developments.
This surge in housing means more rental properties are available, leading to landlords competing fiercely for tenants. When there are more homes than renters, landlords often have to lower their rental prices to attract people, which results in reduced rental yields.
Long-term rental options are also on the rise in these suburbs. While this might seem like a good thing for attracting tenants, it actually means increased competition among landlords. With more choices, tenants can be picky, forcing landlords to drop prices to secure renters, which further cuts into rental yields.
Adding to the challenge is Kyoto's slowing population growth. With fewer people moving in, the demand for rentals is dropping. This makes it tough for landlords to fill their properties, often leading them to lower prices to attract tenants, which again impacts rental yields.
Reports are showing a dip in rental prices in these suburban areas, a clear sign of lower rental yields. This drop is largely due to the increased competition among landlords and the reduced demand. As more properties are available for long-term leases, maintaining high rental prices becomes a struggle.
Sources: Global Property Guide, World Bank Document
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12) Rental yields in central Kyoto will rise as tourist demand for short-term rentals stays strong
Rental yields in Kyoto's central districts are on the rise thanks to the strong demand for short-term rentals by tourists.
Kyoto has become a hotspot for travelers, with its rich cultural and educational attractions drawing in more visitors each year. This trend is set to continue, as the Kyoto Tourism Promotion Plan 2025 aims to enhance the quality of tourism and attract even more visitors.
Short-term rental bookings are booming. According to Airbnb, a typical short-term rental in Kyoto is booked for 292 nights a year, boasting a high median occupancy rate of 80%. This shows a strong demand for these accommodations, which supports higher rental yields.
Central districts like Gion and Shijo-Kawaramachi are tourist favorites, thanks to their blend of traditional charm and modern amenities. These areas are expected to see significant price increases, further boosting rental yields.
The Japanese property market is also on the upswing, which bodes well for the tourism sector. This growth enhances the appeal of short-term rentals in Kyoto, making them a smart investment.
Sources: Airbtics, Kyoto City Tourism Association, E-Housing
13) Property values in Kamigyo will drop as an aging population creates a surplus of homes available
In Kamigyo ward, 26.4% of the population is aged 65 and over, highlighting a significant elderly demographic.
This aging trend is partly due to Japan's low birth rate of 1.32 in 2022, which means fewer young people are entering the population. As older residents pass away or move to care facilities, this can lead to a surplus of homes.
Young people in Japan often migrate to other areas, and this trend is noticeable in Kamigyo. With fewer young families moving in, the surplus of available homes continues to grow.
In Kamigyo, the combination of an aging population and youth migration is creating a unique real estate scenario. Potential buyers might find more options as the number of available homes increases.
For those considering buying property, this surplus could mean more competitive pricing. However, it's essential to consider the long-term implications of an aging community.
Sources: City Population, E-Housing
14) Property prices in Kyoto's Nishijin district will fall as younger people leave traditional weaving jobs
The Nishijin district in Kyoto is seeing a drop in property prices due to several intertwined factors.
One major reason is the decline in young people joining the traditional weaving industry, which has long been the heart of Nishijin's identity. With fewer young folks stepping into this craft, the industry is struggling to keep its footing.
Adding to the challenge is the district's aging population. This means not only fewer hands to continue the weaving tradition but also fewer potential homebuyers. The shift in demographics is crucial as it affects both the workforce and housing demand.
Moreover, younger generations in Japan are leaning towards modern industries over traditional crafts. This shift in preference makes living in a weaving-centric district less appealing to them.
Migration trends are also at play, with younger residents moving to urban centers for better job prospects and a modern lifestyle. This exodus reduces the population and, in turn, the demand for homes in Nishijin.
The economic hurdles faced by traditional weaving businesses, like finding successors and adapting to new consumer tastes, further complicate matters, leading to a decrease in property values.
Sources: IJIH, Global Property Guide
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Japan. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
15) Property values in Gion will rise as cultural enthusiasts seek traditional machiya houses
The historic Gion district in Kyoto is poised for a property value boom, thanks to the growing demand for traditional machiya houses among cultural enthusiasts.
These charming wooden homes are more than just structures; they are a living piece of Japan's rich history and culture. This allure is drawing in both local and international buyers who appreciate the unique aesthetics of traditional Japanese architecture. Foreign investors, in particular, are snapping up these properties, often transforming them into galleries, cafes, and boutique hotels, adding a modern twist to their historical charm.
Japan's welcoming policy towards foreign property ownership is a big plus. It allows individuals and corporations from abroad to purchase freehold properties without much hassle, making the market especially attractive to international buyers. This openness is fueling the interest in machiya houses, as investors see the potential for both personal enjoyment and business opportunities.
The Gion district itself is a magnet for tourists, with over 50 million visitors flocking to the area each year. This bustling tourist scene boosts the demand for short-term rentals, including the coveted machiya houses. The district's vibrant cultural scene, famous for its geisha culture, adds to its allure, making it a hot spot for those looking to invest in a culturally rich environment.
For those considering a purchase, it's worth noting that the Gion district offers a unique blend of tradition and modernity. The machiya houses, with their historical significance, are not just homes but an investment in a lifestyle that celebrates Japan's cultural heritage. This makes them particularly appealing to cultural enthusiasts who value authenticity and history.
As the demand for these traditional homes continues to rise, the Gion district is set to become an even more desirable location for property investment. The combination of cultural appeal, tourist interest, and favorable property laws creates a perfect storm for a surge in property values, making now an opportune time to invest in this historic area.
Sources: Heritage Homes Japan, Tablet Hotels Magazine, Real Estate Japan
16) More international students and expats will move to Kyoto, causing a demographic shift
Kyoto is quickly becoming a hotspot for international students and expatriates.
One big draw is the surge in international student enrollment at Kyoto's universities. For instance, the Kyoto College of Graduate Studies for Informatics expanded its capacity in 2024, aiming to attract more students from abroad. This aligns with Japan's broader goal to welcome more international students, positioning Kyoto as a key player in this initiative.
There's also a noticeable rise in expatriate work visas in Japan, with over 3.4 million foreign residents recorded in 2023. This trend suggests that Kyoto is seeing more expatriates, supported by the growth of international schools and services tailored for foreign residents.
The Japanese government is actively working to bring in international talent through programs like the specified skilled worker initiative. These efforts, combined with Kyoto's rich cultural and historical allure, make the city an appealing choice for both students and expatriates.
Kyoto's charm isn't just in its temples and traditions; it's also in its growing international community. The city is adapting to meet the needs of its new residents, offering a blend of modern amenities and cultural experiences.
As more people from around the world choose to call Kyoto home, the city is poised for a dynamic demographic transformation, reflecting a blend of global influences and local heritage.
Sources: The PIE News, Kyodo News, The Japan Times, KCGI News
18) Property values near the new Keihan railway extension will rise significantly due to better accessibility
Properties near the planned extension of the Keihan railway line are set to rise in value thanks to better accessibility.
Take a look at what happened with the Kita-Osaka Kyuko Line. When it was extended, property prices within 500 meters of the new stations jumped 1.5 times in just three years. Rental rates also climbed by 18.9% during that time. This isn't just a fluke; it's a trend. New railway lines make nearby areas more attractive, pushing up both property values and rents.
Improved transport links are a big deal for property values. Real estate experts say better access to transportation makes areas more appealing to potential residents. This increased interest naturally boosts property prices. The Keihan Group's 2023 report backs this up, showing confidence in the economic perks of their railway expansions, including rising property values.
When people can easily get around, they’re more likely to move to those areas. This is why transportation improvements often lead to higher demand for nearby properties. The Keihan railway extension is expected to follow this pattern, making properties in the area more desirable.
So, if you're thinking about buying property, keep an eye on areas near the new Keihan line. These spots are likely to see a boost in value as the railway extension progresses. It's a smart move to consider these locations for future investment.
Sources: Keihan Group, RE/MAX Apex, UCLA Anderson
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.