Buying a property in Osaka: 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 Osaka's property market is included in our pack

Considering investing in real estate in Osaka? You're not alone!

Many people are charmed by Osaka's vibrant energy and dream of owning a modern apartment or a traditional townhouse in this city.

Does it make sense from a financial perspective, though? Are property prices increasing in Osaka? What is the price per sqm? Should I buy property in Umeda or Dotonbori? Are there any hidden fees? Which place will give me the best yields?

In this article, everything is sorted out for you.

The BambooRoutes team has really dug into this market. As a matter of fact, we have condensed all our findings in a pack. Get it now.

In the lines below, we'll provide you with helpful information.

How is the real estate market in Osaka?

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 Osaka, you can find various types of properties for sale, including apartments, houses, condos, and commercial spaces like shops or offices.

These properties come in different sizes and offer diverse features, such as multiple bedrooms, modern amenities, proximity to public transportation, and varying price ranges to suit different budgets and preferences.

Whether you're looking for a cozy apartment, a spacious house, or a business space, Osaka offers a wide range of property options for potential buyers.

Better to buy or rent?

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

If Osaka, the vibrant city in Japan, has caught your interest as a place to settle, you might be thinking about the pros and cons of buying versus renting a property.

Obviously, it's better to buy if you plan to stay in Osaka for the long-term and want to build equity in a property.

To make a good decision, consider the property price-to-rent ratio. This number gives you an idea of how long it will take to break even on the property's purchase using rental income.

According to Numbeo, the property price-to-rent ratio in Osaka is around 61.27, which is very high.

If the ratio is high, it indicates that buying properties are more expensive in the short term compared to renting. However, buying can still be a viable option if you plan to live in the property for an extended period or if you believe property values will increase significantly over time.

Property prices in Osaka

On average, according to the last data from Ministry of Land, Infrastructure, Transport and Tourism, Japan, purchasing a property in Osaka would cost you around $8,000 per square meter.

Of course, there are notable differences. The value of a square meter for an apartment in Umeda might differ from a house in Namba. We actually offer a more in-depth analysis in our pack for buying property in Osaka and in Japan.

To give you a better idea, it is similar to the property prices you can find in a city like Stockholm.

Also, housing prices in Osaka are cheaper (-2%) than in Tokyo.

The most expensive neighbourhoods in Osaka are probably Minami, Chuo-ku, Kita-ku, and Naniwa-ku, while the cheapest neighbourhoods are likely to be in the western suburbs of Osaka.

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.

It is something to have in mind when wondering whether it's a good investment to buy a property in Osaka.

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 intend to invest in real estate in Osaka it's a good thing because when the economy grows, people often experience an increase in wealth, it typically translates to a surge in housing costs.

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 Osaka

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

Buying process

Within our pack, we've covered the entire buying process extensively. This includes a detailed breakdown of prices and yields based on the area, advice on negotiating prices, and information about obtaining a mortgage.

Now, we're providing you with a simplified version.

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

1. Research the Osaka property market and set a budget.
2. Engage a licensed real estate agent for property search.
3. Choose a property that meets your requirements and conduct due diligence.
4. Verify property documents, including the "juminhyo" (residency certificate) and "sho-mei" (proof of registered matters).
5. Make an offer and negotiate the price with the seller or their agent.
6. Sign a sales contract (called "keiyaku") with the seller, outlining the terms and conditions of the purchase.
7. Secure financing from a bank or lender in Japan.
8. Conduct a property inspection and review the "chintai hoshou shoumeisho" (rental guarantee certificate), if applicable.
9. Complete the necessary paperwork, including the "sho-hyo" (official certification document) and "jiko shomeisho" (personal identity document).
10. Transfer funds and pay taxes, including the acquisition tax and registration fees.
11. Register the property at the local Legal Affairs Bureau and the "koseki" (family registry).
12. Receive the property ownership certificate (called "joto shomeisho") and complete the purchase process.

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 Osaka

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Where to find a property

Below is a list of websites where you can find properties in Osaka to help you in your search:

• 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 Osaka.
• 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 properties?

As mentioned before, the average price per sqm in Osaka is $8,000. A 1-bedroom property with 60 square meters would cost approximately $480,000, and a 2-bedroom with 85 square meters would cost around $680,000.

However, property prices can vary because of their qualities and where they're located.

Property prices in the top areas of Osaka are commonly at a premium. In Umeda, a residence could cost you around $1,940,000, while a residence in Namba might be priced at $1,800,000.

However, there are also places that won't strain your finances as much. You could find a condominium in Fukushima for $260,000, or you may discover a condominium in Nishinari priced at only $220,000.

We give a more detailed breakdown in our full pack for buying property in Japan.

Mistakes to avoid

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

• Gaito Bukken: Be cautious of old, low-priced properties with hidden defects and limited resale potential.
• Earthquake Risk: Osaka's seismic activity demands thorough building inspections and earthquake-resistant structures.
• Jyutaku Kanri Gyousha: Choosing an unreliable property management company may lead to inadequate maintenance and tenant issues.
• Fudosan: Dealing with unscrupulous real estate agents could result in misleading information and higher costs.
• Zoning and Urban Planning: Understand Japan's strict zoning laws to avoid buying property with limited usage or development options.
• Special Building Codes: Heritage regulations and historical preservation restrictions may impact property modifications.
• Kanrihi: Factor in high maintenance fees for communal spaces and amenities in apartment complexes.
• Kansei-bi: Ensure the property's design complies with Japanese aesthetics to attract buyers in the future.

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 Osaka

Living in Osaka is a great experience, offering a vibrant urban lifestyle with plenty of opportunities for entertainment, culture, and business.

Cost of living

The cost of living in Osaka is generally lower than the cost of living in Tokyo, but still higher than the national average. It is possible to live comfortably in Osaka for less than ¥100,000 per month.

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

• A cup of matcha latte at a traditional tea house in Kyoto: $5-$8.
• Monthly rent for a cozy apartment in the trendy Dotonbori neighborhood: $900-$1,500.
• Commuting from Osaka to Kyoto using the Hankyu Kyoto Line: $100-$150/month.
• A bottle of local sake (e.g., Nada-Gogo) from a convenience store: $10-$20.
• Dinner for two at a popular kushikatsu restaurant in Shinsekai: $40-$60.
• A one-day pass to explore Osaka's Universal Studios Japan: $70-$100.
• Fresh produce from Kuromon Ichiba Market for a week: $30-$50.
• Monthly membership at a unique Japanese-style coworking space in Umeda: $150-$200.

Neighbourhoods

Since our goal is to present information in a clear and reader-friendly manner, we've created a summary table outlining the different neighborhoods in Osaka. For yields, prices and rents, check our property pack.

Life in Osaka

Osaka is Japan's second-largest metropolitan area and a major economic hub. It is home to a large and diverse range of industries, including manufacturing, finance, and technology, and is known for its vibrant business environment and highly-developed infrastructure.

What expats usually like the most in Osaka is its unique food culture, such as okonomiyaki and takoyaki, as well as its vibrant nightlife.

Regarding safety, the crime rate of Osaka is around 33, which is not concerning. Osaka has a strong focus on community policing, which has been successful in reducing crime.

A good point for a property investor - Osaka has a comprehensive mass rapid transit system, including the Osaka Metro, the Hankyu Railway, the Hanshin Railway, the Kintetsu Railway, and the Nankai Railway.

Access to healthcare in Osaka is generally good, with many hospitals and clinics providing a wide range of services.

Finally, it is worth noting that the Osaka University ranks among the top 300 universities in the world.

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Renting out in Osaka

If you're considering purchasing property solely for renting and earning income, you'll find valuable information in this section.

Long-term

Tenant Profiles in Osaka

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 Osaka, 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 students, young professionals, and families with children, as they make up the majority of the tenant population in Osaka. Short-term tenants, such as tourists, business travelers, and expats, are also in high demand in the city.

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

Rental yields

As of today, rental yields in Osaka are quite low, below 2% that's for sure. Among other things, this low performance can be explained by Osaka's high housing prices, which reduce the potential rental yield for investors.

The best rental yields in Osaka are typically found in older, centrally-located apartments due to their affordability and convenient access to public transportation. Additionally, smaller-sized units tend to be in higher demand and therefore provide higher yields than larger units.

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 Osaka are taxed at 20%, which is rather good.

Short-term

You could also decide to rent short-term to tourists visiting Osaka for sightseeing and business travelers attending conferences in the city. Additionally, students attending universities in Osaka are potential tenants for short-term rental.

If you decide to go with that option, look for properties in the Namba area, as well as the Umeda, Shinsaibashi and Tennoji districts. These areas are popular and have plenty of short-term rental options.

Currently, there are approximately 6,000 active Airbnb listings in Osaka, reflecting a highly dynamic and bustling short-term rental market. The average daily rate stands around $89.

You have the opportunity to generate a nice additional income stream then. According to online testimonials and analytics platform like AirDNA, Guesty and Inside Airbnb, people who offer short-term rentals in Osaka can make around $1300 per month. Also, the average occupancy rate is estimated at 67%.

Is it worth buying real estate in Osaka then?

Buying a property in Osaka can be a smart move if you plan to make the city your long-term home or believe in the potential for property value growth. Osaka's property market, while not seeing rapid price hikes, is stable, offering a sense of security and stability.

If you're in it for the long haul, buying makes sense, especially given the high property price-to-rent ratio. This means that while renting may be cheaper in the short term, buying becomes cost-effective over an extended period.

Moreover, the city provides diverse property options to cater to various preferences and budgets, making it accessible for both locals and foreigners. If you're looking for potential rental income, Osaka's strong demand from students, young professionals, and tourists can provide a steady revenue stream.

However, keep in mind that rental yields in the city are relatively low, particularly for newer properties in central areas.

On the flip side, if you're planning a short-term stay in Osaka or uncertain about your future plans, renting might be the better option. Buying and selling property can come with significant transaction costs that may take years to recoup.

Moreover, if your budget is limited, premium areas like Umeda can be costly, potentially forcing you to compromise on location or property size. Rental yields in Osaka are also relatively low, making it less attractive for investors prioritizing rental income over property appreciation.

Additionally, the complexity of Osaka's property market, language barriers, and potential hidden costs can pose challenges for foreign investors. It's crucial to conduct thorough research and work with reputable agents to navigate potential pitfalls like property maintenance and earthquake risks. In summary, buying a property in Osaka is a good idea for long-term residents or those betting on property value growth, but renting is more practical for short-term stays, budget constraints, or those prioritizing rental income over capital appreciation.

Make sure you understand the real estate market in Osaka

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.