Authored by the expert who managed and guided the team behind the Japan Property Pack
Yes, the analysis of Kyoto's property market is included in our pack
Are you considering investing in Kyoto's property market and wondering what the future holds? Curious about the emerging trends that could impact your buying decision in 2025? Want to know which areas are set to boom and which might decline?
We will lay down recent insights, providing you with a clear picture of the market's trajectory. Ici no guesswork, we rely only on solid data to guide your investment choices.
Actually, we know this market inside and out. We keep tabs on it regularly, and all our discoveries are reflected in the most recent version of the Japan Property Pack
1) Investors will flock to Higashiyama for its unique mix of traditional and modern living spaces
The Higashiyama district in Kyoto is catching the eye of investors due to its unique blend of traditional and modern living spaces.
Property prices in Higashiyama are on the rise, appealing to both local and international buyers. This trend is fueled by the development of luxury housing projects that seamlessly integrate with the district's cultural charm. The area is becoming a hotspot for those seeking a mix of old-world charm and contemporary comfort.
Real estate transactions are booming in Kyoto's cultural districts, with Higashiyama leading the charge. The district's traditional architecture and cultural significance are major draws. A prime example is the upcoming Banyan Tree Higashiyama Kyoto, a luxury resort that perfectly marries modern design with the area's historic ambiance.
Investors are also attracted by the demand for properties near cultural landmarks and eco-friendly buildings, aligning with Kyoto's sustainability goals. The influx of tourists in 2023, thanks to a weak yen, has further increased interest in residential properties in Higashiyama. This surge in tourism highlights the district's appeal as a vibrant and desirable place to live.
Media coverage has spotlighted the unique living experience in Higashiyama, enhancing its reputation as a prime investment location. Government initiatives to preserve and promote traditional areas add to the district's allure, ensuring that its cultural heritage remains intact while embracing modernity.
With its rich history and forward-thinking developments, Higashiyama is poised to see continued interest from investors. The district's ability to offer a harmonious blend of the past and present makes it a standout choice for those looking to invest in Kyoto's real estate market.
Sources: Banyan Tree continues Asian concentration, Yes, property prices will rise in Kyoto in 2025, Kyoto Pref. tourists hit record 75M in 2023, surpassing pre-COVID levels
2) Foreign interest in Kyoto's outskirts will drop as investors target central locations
Investors are increasingly focusing their attention on central Kyoto for property investments.
In 2023 and 2024, property prices in central Kyoto, especially in areas like Gion and Shijo-Kawaramachi, saw a significant rise. These areas are not only rich in history and culture but also offer a unique blend of traditional charm and modern amenities, making them highly attractive to both tourists and investors.
Kyoto's resurgence as a top tourist destination has fueled a surge in interest for short-term rentals in these central areas. The demand is driven by the allure of staying in a place that offers both historical significance and modern conveniences.
Infrastructure developments, such as the extension of tram lines and renovations in historic areas, have further boosted the appeal of central Kyoto. These improvements have made it easier for people to access and enjoy the city's central locations, leading to higher property prices.
As a result, investors are increasingly drawn to these central areas, recognizing the potential for higher returns due to the limited supply and high demand. This focus on central locations is expected to lead to a decline in foreign interest in Kyoto's outskirts.
With central Kyoto becoming more desirable, the trend is clear: investors are prioritizing areas with strong cultural and historical appeal, coupled with modern infrastructure.
Sources: Japan Wonder Travel, Mai-Ko Travel, Bamboo Routes
Everything you need to know is included in our Property Investment Pack for Kyoto
3) Sakyo Ward rental yields will stay stable due to strong demand from university students
In Sakyo Ward, rental yields are expected to stay stable thanks to the steady demand from university students.
Kyoto University, with 22,426 students as of May 2023, plays a big role in this stability. The student numbers have barely changed over the years, showing a reliable student population. Many students in Japan prefer living off-campus because it's often more available and affordable, which keeps the rental demand high in areas like Sakyo Ward.
Kyoto University doesn't have enough on-campus housing, so students look for places nearby, keeping the rental market busy. This is especially true in Sakyo Ward, where the average rent for a 1LDK apartment is higher than in other areas, reflecting the strong demand for student housing.
International students, who make up a good chunk of the student body, also need off-campus housing, adding to the demand. In university districts like Sakyo Ward, rental yields are generally higher and more stable compared to non-university areas.
For those considering buying property here, it's worth noting that the presence of a large student population ensures a consistent rental market. This is a key factor for investors looking for stable returns.
With the ongoing demand from both local and international students, the rental market in Sakyo Ward remains robust, making it an attractive option for property buyers.
Sources: Real Estate Japan, Kyoto University Facts and Figures, Japan Property Market Insights
4) Kyoto's demand for smaller apartments will rise due to more single-person households
Kyoto is seeing a rise in single-person households, which is shaping the demand for smaller apartments.
In 2020, 41.2% of Kyoto's households were single-person, and this number is climbing. This trend is partly due to an aging population, with more elderly folks opting to live alone. By 2050, over 20% of households will be elderly individuals living solo, up from 13.2% in 2020.
Young professionals are flocking to urban hubs like Kyoto for job opportunities, often choosing to live alone in smaller spaces. This shift is driven by lifestyle changes and economic factors, as larger properties become less affordable.
Real estate reports highlight a growing demand for compact apartments, echoing trends seen in Tokyo. Government data shows a decrease in average household size, which is expected to be more noticeable in cities like Kyoto. Urban planning is likely to focus on developing smaller housing units to meet this demand.
Consumer surveys reveal a preference for smaller living spaces, influenced by lifestyle shifts and economic considerations. This preference is pushing the market towards more compact living arrangements, aligning with the needs of both young professionals and the elderly.
Sources: Yomiuri Shimbun, The Japan Times, Global Property Guide, Mainichi Shimbun
5) Eco-friendly homes will become popular as buyers prioritize environmental awareness
Eco-friendly homes are becoming more popular as buyers become more aware of environmental issues.
In recent years, especially in 2023 and 2024, there's been a noticeable shift towards sustainable living. This change is largely driven by a global survey showing that 78% of consumers find environmental sustainability important, and 63% are actively changing their lifestyles to be greener. People are looking for homes that align with these values.
In Japan, the market for green building materials is on the rise, with an expected growth rate of 11% annually from 2024 to 2029. This surge is due to the increasing demand for homes that reduce carbon footprints and use renewable energy. The Japanese government supports this trend by promoting eco-friendly construction through laws and incentives.
The media plays a big role in spreading the word about the benefits of eco-friendly homes. Reports and guides on sustainable living are everywhere, and social media is buzzing with hashtags about green living. This online presence makes eco-friendly homes even more appealing to potential buyers.
Educational programs are also helping people understand the advantages of sustainable housing. These programs teach consumers about the long-term benefits of living in eco-friendly homes, making them more likely to consider such options when buying property.
Sources: Actual Market Research, The Madrona Group, Sekisui Chemical
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6) Eco-friendly home tax incentives will boost demand for sustainable housing in Kyoto
In 2023 and 2024, the Japanese government rolled out tax incentives to boost eco-friendly homes.
These incentives include the Low Carbon Building Certification System, which offers tax and financing perks for low-carbon certified buildings. The National Tax Agency also provides a special tax-credit system for home improvements that enhance energy efficiency, making it easier for homeowners to upgrade their properties.
In cities like Kyoto, the demand for sustainable homes is on the rise. This surge is fueled by government initiatives and a shift in consumer preferences, as people aim for carbon neutrality by 2050. Many are drawn to tech-equipped apartments featuring smart home technology and sustainable design, which are becoming increasingly popular.
Environmental awareness is growing, thanks to significant media coverage in Japan. This heightened awareness is likely to drive more interest in sustainable housing options. In Kyoto, local governments are teaming up with developers to promote green building practices, often providing financial support and tax incentives for eco-friendly projects.
These efforts are not just about going green; they also make financial sense. With the right incentives, homeowners can save money while contributing to a more sustainable future. The combination of government support and consumer interest is creating a fertile ground for sustainable housing in Kyoto.
Sources: Baker McKenzie, E-Housing Japan
7) New rules will boost renovation of old properties and increase their market value
New regulations are making it easier to renovate older properties, especially in Kyoto.
Thanks to these rules, property owners can now get up to 50% of their renovation costs covered through government subsidies, particularly for Kyo-Machiya houses. This financial boost is a game-changer, making it more appealing to invest in these charming, traditional homes. The aim is to preserve Kyoto's unique cultural heritage while also making these properties more attractive to buyers.
Kyoto City is also stepping up by offering extra funds to families who buy and renovate older homes, including those quaint townhouses. This initiative is a win-win: it helps families settle in and boosts the market value of these older properties. With these funds available until 2025, more people are jumping on the renovation bandwagon, knowing they have solid financial support.
In 2023, Japan's home renovation market saw a noticeable uptick, signaling a growing interest in sprucing up older homes. Even though a dip is expected in 2024, the focus remains on high-value renovations, keeping the market for older properties vibrant. Media outlets are buzzing about the perks of renovating, like preserving history and enhancing community vibes.
These efforts are not just about aesthetics; they're about breathing new life into communities and making older homes more appealing. The buzz around these renovations is creating a ripple effect, encouraging more people to see the potential in these properties. It's not just about fixing up a house; it's about investing in a piece of history and a better quality of life.
So, if you're thinking about buying a property in the country, now might be the perfect time to consider an older home. With all these incentives and the growing interest in renovations, you could find yourself owning a piece of history that's both beautiful and valuable.
Sources: Arrows Realty, Cheap Houses Japan, Patience Realty
8) Kyoto's northern suburbs will see slower price growth than the city center due to lower demand
In Kyoto, property prices in the city center are climbing faster than in the northern suburbs.
Why? Well, it starts with population density. More than half of Kyoto's population is packed into the city center, while the northern suburbs are much less crowded. Fewer people means less competition for homes in those quieter areas.
Then there's the matter of getting around. The city center boasts a comprehensive transit system, making it easy to reach jobs and amenities. In the northern suburbs, public transport is more limited, which makes them less appealing for those who rely on it.
People, especially younger folks, often prefer living close to the action. Surveys show a strong preference for central locations due to their proximity to amenities and cultural hotspots. This trend is evident in the bustling city center.
Real estate reports highlight higher vacancy rates in the northern suburbs, pointing to less demand for housing there. Meanwhile, the city center buzzes with commercial activity and tourism, driving up property prices.
Government and infrastructure projects tend to focus on the city center, making it even more attractive to buyers. This focus further fuels the property price growth in these central areas.
Sources: Wikipedia, Discover Kyoto, Global Property Guide
Everything you need to know is included in our Real Estate Pack for Kyoto
9) Arashiyama property values will surge from its scenic beauty and growing tourist traffic
The Arashiyama area is set to see a rise in property values thanks to its stunning scenery and the growing number of tourists.
In 2022, Kyoto City welcomed 71.28 million tourists, and this trend is still going strong. By October 2023, the hotel occupancy rate hit 82.9%, showing just how bustling the area has become. This surge in visitors often means more people looking to buy property.
Getting to Arashiyama is now easier than ever, thanks to the JR Sagano/Sanin Line. This line offers a direct route from Kyoto Station to Saga-Arashiyama Station, making the area more accessible. With better transport links, more tourists and potential buyers are drawn to the area.
New hotels and tourist accommodations are popping up all over Arashiyama, signaling its rising popularity. This investment not only gives tourists more places to stay but also improves the local infrastructure. As a result, the area becomes more appealing to both visitors and those looking to invest in property.
With more people visiting and investing, property values in Arashiyama are likely to climb. The combination of natural beauty, improved transport, and new developments makes it a hot spot for real estate.
Sources: All Japan Tours, Go With Guide, Global Property Guide
10) Nakagyo Ward prices will rise steadily as it becomes a cultural and commercial hub
The central Nakagyo Ward in Kyoto is becoming a cultural and commercial hotspot, leading to a steady rise in property prices.
In Nakagyo Ward, the area around Karasuma Station is buzzing with new businesses, especially in shopping and dining. This growth makes it a prime spot for entrepreneurs. Being close to Nishiki Food Market adds to its charm, drawing both locals and tourists. The city’s push for cultural tourism is also a big factor, as it’s expected to boost property values even more.
Nakagyo Ward is alive with cultural events and festivals, which not only attract crowds but also drive up property prices. The area’s excellent public transport, with Karasuma Station as a key hub, makes it super accessible. Plus, ongoing improvements like tram line extensions and historic area renovations are set to increase property values over time.
From 2020 to 2024, the average price of a 100-sqm resale house in Nakagyo Ward was notably higher than in other Kyoto wards. This shows a strong demand and rising transaction volumes. The city’s efforts to preserve cultural heritage and improve urban infrastructure are making Nakagyo Ward even more appealing to buyers from Japan and abroad.
With its vibrant cultural scene and strategic location, Nakagyo Ward is becoming a top choice for property buyers. The combination of cultural attractions, business opportunities, and excellent transport links makes it a desirable place to live and invest.
Sources: Real Estate Japan, Kyoto Price Forecasts
11) Rents in Kita Ward will drop as residents move to the city center for work opportunities
People are increasingly choosing to live closer to the city center for better job opportunities and amenities.
This shift is causing a decline in demand for suburban areas like Kita Ward, where average rent is already lower compared to other wards such as Kamigyo and Sakyo. The construction of new development centers, like Kyocera's Center for Development at the Shiga Yasu Campus, is a clear sign of rising job opportunities in the city center.
These developments are likely to attract more residents to the city center, further reducing the demand for housing in Kita Ward. In Japan's residential real estate market, central wards are expected to stay popular due to growing populations and strong residential demand.
Looking at other cities like Tokyo, there's been a noticeable shift from suburban to urban living. This trend suggests that Kyoto might experience similar patterns, leading to a decline in rents in suburban areas like Kita Ward.
While we don't have specific data on transportation improvements in Kyoto, better access and shorter commute times to the city center can make suburban living less attractive. This is especially true as people prioritize convenience and proximity to work.
Sources: Average Rent in Kyoto by Ward, Japan Residential Real Estate Market Analysis 2024, Kyocera to Construct New Development Center
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12) Gion district rental yields will rise as it becomes a short-term rental hotspot
Rental yields in the Gion district are set to rise as it becomes a prime spot for short-term rentals.
In Kyoto, the demand for short-term rentals is booming. A typical listing is booked for 292 nights a year, with an impressive 80% occupancy rate. This is much higher than long-term leases, showing that visitors prefer short stays.
Gion's charm lies in its rich cultural heritage and history, making it a magnet for tourists. Many surveys reveal that travelers love staying in traditional areas like Gion. The media often highlights Gion as a must-visit, which only adds to its allure for short-term rentals.
For property owners, short-term rentals are a goldmine. They can earn twice the monthly cash flow compared to traditional rentals. This makes short-term rentals a very attractive option for investors looking to maximize their returns.
Sources: Airbtics, Mitsui Fudosan Realty, Nomu
13) Rental yields in Kamigyo Ward will drop due to too many rental properties available
In Kamigyo Ward, rental yields are likely to decline due to an oversupply of rental properties.
Kamigyo Ward's average rent is ¥49,400 for a 1K/1DK layout, which is much lower than Kyoto's average of ¥83,523. This price difference hints at an oversupply, as landlords might be lowering rents to attract tenants. If you're considering buying property here, this could mean less rental income than in other Kyoto wards.
Kyoto's rental market is bustling, with short-term rentals being booked for 292 nights a year and an occupancy rate of 80%. This high demand for short-term stays suggests that the market is close to saturation. In Kamigyo, this could mean more competition among landlords, potentially driving rents down further.
Even though average rents are rising in Kyoto, some areas are experiencing falling vacancy rates. This might sound positive, but it could also indicate a surplus of rental units. In Kamigyo, this surplus could mean that the supply of rental properties is outpacing demand, leading to lower rental yields.
For potential property buyers, it's crucial to consider these dynamics. While the overall Kyoto market is thriving, Kamigyo Ward might not offer the same returns due to its unique market conditions. The oversupply of rental properties could make it challenging to achieve high rental yields.
Sources: Airbtics, CBRE, Real Estate Japan
14) Kyoto's aging population will drive higher demand for accessible housing options
Kyoto is experiencing a notable rise in its elderly population.
With 2.55 million residents in 2022, a significant portion of Kyoto's population is aged 65 or older. This mirrors a national trend in Japan, where over 28.7% of the population is elderly, predominantly women. The aging demographic is not just a recent development; back in 1950, only a small fraction of the population was over 65. Fast forward to 1994, and that number had already climbed to over 14%. By 2050, it's expected to surpass 37%, underscoring the growing need for housing that meets the needs of older adults.
Older adults in Japan are increasingly seeking barrier-free and accessible housing. This preference stems from the necessity for mobility and healthcare support as they age. Consequently, there's a trend towards building homes that are not only fire-retardant but also more accessible, catering to the specific needs of the elderly.
Kyoto, like many urban areas in Japan, faces a shortage of accessible housing. The rapid aging of the population is driving up demand for senior-friendly homes. Many elderly individuals live alone, which further highlights the importance of having housing options that support their independence and accessibility needs.
As the population ages, the demand for accessible housing in Kyoto is expected to rise. This trend is particularly evident in urban areas, where the need for senior-friendly housing is becoming more pressing. The shortage of such housing options is a growing concern, especially as more elderly individuals seek to maintain their independence.
Sources: World Economic Forum, CBL Report, Mitsui Report, European Parliament Briefing
Everything you need to know is included in our Property Pack for Kyoto
15) Rents in Ukyo Ward will stay stable with balanced supply and demand
In Ukyo Ward, Kyoto, rental prices have remained remarkably stable over the years.
Back in 2021, if you were looking for a place, a 1R layout would cost you around ¥38,700 per month, while a 1K・1DK layout was about ¥48,600. This consistency shows that the market is balanced, with supply meeting demand just right.
Kyoto's rental price indices have barely budged, which means housing supply is keeping up with demand. This kind of stability is a good sign for anyone thinking about moving to the area.
People keep moving to Kyoto, and this steady influx supports the demand for housing. With a stable supply, rents in places like Ukyo Ward stay steady. Plus, new infrastructure projects and urban redevelopment make living here even more appealing.
These developments not only improve the quality of life but also help maintain the demand for housing. So, if you're considering a move, Ukyo Ward offers a stable rental market with a good balance of supply and demand.
Sources: Real Estate Japan, E-Housing Japan
16) Minami Ward rents will rise as it gains popularity with young families
Minami Ward in Kyoto is becoming a hot spot for young families, which is likely to nudge rents up a bit.
Families are flocking here because of the growing demand for family-friendly housing. More vacation rentals are popping up, and they’re getting rave reviews for their location, cleanliness, and amenities. This buzz shows that young families find Minami Ward a great place to settle down.
Local schools are seeing a surge in enrollment, which is another sign of this trend. From fall 2020 to fall 2021, the number of students in Kyoto's elementary and secondary schools increased. This means more families are moving in, naturally boosting the demand for housing and nudging rents upward.
Public transportation improvements are also making Minami Ward more appealing. In June 2024, Kyoto City rolled out new limited express buses and increased city bus frequency. This makes commuting a breeze for families, adding to the area's charm and driving up housing demand.
With these changes, Minami Ward is becoming a magnet for young families. The combination of better schools, improved transport, and family-friendly housing is making it a top choice for those looking to settle in Kyoto.
Sources: Airbnb, NCES, Kyoto Travel
17) Yamashina rents will rise as it becomes a top family-friendly neighborhood
Yamashina is becoming a hotspot for families, and this is pushing rents up.
Families are flocking to Yamashina, and it's not just a coincidence. Demand for family-sized rentals is on the rise, and platforms like Airbnb are seeing more family-friendly listings pop up. This trend shows that families are keen on making Yamashina their home base.
Local amenities are getting a facelift, which is another reason for the rent hike. Parks and playgrounds have been upgraded, making the area more appealing to families. These improvements boost the quality of life, which in turn nudges property values and rents upward. Plus, with better public transportation and infrastructure in Kyoto, Yamashina is now more accessible, adding to its charm for families.
Family-oriented businesses are sprouting up everywhere. Daycare centers and pediatric clinics are becoming more common, signaling a growing need for family services. This attracts even more families, which again pushes property values and rents higher. The local government is also playing its part by promoting Yamashina as a family-friendly area, and this is getting noticed in family-focused publications.
All these factors are creating a buzz around Yamashina, making it a sought-after spot for families. Positive reviews and mentions in family-oriented media are adding to its reputation, leading to a surge in housing demand. The area is becoming a go-to place for families looking for a convenient and welcoming environment.
Sources: Airbnb, EJRCF, E-Housing
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18) Virtual reality tours will dominate Kyoto real estate attracting tech-savvy buyers
In Kyoto's real estate market, virtual reality tours are becoming increasingly popular.
With the global VR and AR market expected to hit $80 billion by 2025, it's no surprise that this tech is making waves in real estate. More than half of adults have already tried virtual tours, and a whopping 67% of home buyers want them when checking out property listings.
Gen Z and Millennials, who are stepping into their prime home-buying years, are driving this trend. These tech-savvy groups are not just comfortable with technology; they expect it. They're looking for smart home features and digital solutions like virtual tours as part of their buying journey.
The pandemic has also played a role, turning house hunting into a virtual affair. Many buyers now see virtual tours as essential, with 54% saying they won't consider a property without one. This shift highlights how crucial VR has become in the decision-making process.
In Kyoto, this means that real estate agents are increasingly offering virtual tours to meet the demands of these tech-savvy buyers. It's not just about convenience; it's about staying competitive in a market where digital experiences are becoming the norm.
As more buyers embrace this technology, virtual reality tours are set to become a staple in the real estate market, especially in tech-forward cities like Kyoto. This trend is reshaping how properties are marketed and sold, making it easier for buyers to explore homes from anywhere in the world.
Sources: Virtual Reality Tour for Real Estate & Construction Market, Top Buyer Trends in the Real Estate Market for 2024, Powerful Real Estate Virtual Tour Statistics in 2024
19) Sustainability will drive property decisions and buyer preferences in Kyoto
Kyoto is becoming a hotspot for eco-friendly housing developments.
These homes are designed to cut down on energy use by using techniques like "passive housing," which maximizes natural light and reduces the need for artificial heating and cooling. In 2023 and 2024, Kyoto has really embraced these innovative designs, making them a popular choice for new developments.
The Japanese government is a big player in this shift, offering subsidies and incentives for sustainable building practices. This support has led to a boom in eco-friendly properties in Kyoto, making sustainability a key factor for developers and buyers alike. The government's goal to cut CO₂ emissions by 80% by 2030 highlights the importance of sustainable construction.
Buyers are also changing their tune, with more people looking for homes that feature smart home technology and sustainable design. This shift in consumer preferences shows a growing trend towards prioritizing sustainability in property decisions, as people become more aware of climate change and its impact on real estate.
In Kyoto, sustainability is not just a buzzword; it's becoming a crucial element in property decisions. The city's commitment to eco-friendly living is attracting buyers who value green living and want to invest in properties that align with their environmental values.
As Kyoto continues to lead the way in sustainable housing, it's clear that eco-friendly features are no longer optional but essential for future property developments. This trend is reshaping the real estate market, making sustainability a top priority for both developers and buyers.
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.