Is buying a property in Shibuya a good investment?

Last updated on December 20, 2023

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

If you've appreciated the trendy shops and vibrant culture of Shibuya, you might have contemplated establishing a residence in this bohemian Tokyo district, immersing yourself in its creative atmosphere and lively community.

Is it a good idea though? What's the current state of the real estate market in that area? Are property values appreciating or depreciating? Are investors seeing returns on their real estate investments? How's the demand for rentals?

We'll answer all these questions for you! When building and updating our property pack for Japan, our team has been researching and surveying this area. In fact, there is significant customer interest in investing there. Therefore, we believe it would be beneficial to include some information about it in our property pack.

Why do property buyers like investing in Shibuya?

Shibuya in Tokyo has emerged as a magnetic spot for property buyers, blending its unique charm with the vibrancy of a major global city.

When you think about what sets Shibuya apart, consider its cultural and commercial dynamism. This district is famed for its bustling streets, iconic fashion trends, and as a hub of youth culture and entertainment. It's a place where modernity meets tradition, offering a lively urban experience that's hard to replicate elsewhere.

Now, if you compare Shibuya to other areas in Tokyo, you'll notice some striking differences. Unlike the more serene and upscale neighborhoods like Minato or the historic and tranquil ambiance of Asakusa, Shibuya is always on the go.

It's a hub of activity, filled with shopping, dining, and entertainment options. This energy is a significant draw for many, especially younger professionals and those keen on experiencing Tokyo's contemporary pulse.

The rise in popularity of Shibuya as a real estate choice isn't a recent phenomenon. It began gaining attention in the late 20th century as Japan's economy boomed and continued into the 21st century.

This growth was spurred by its appeal to both domestic and international crowds, bolstered by its reputation as a trend-setting locale. The question of whether this hype will persist is interesting.

Based on current trends, Shibuya's appeal doesn't seem to be waning. Its continual development, like the Shibuya Station area's recent renovation, keeps injecting new vitality into the district.

The kind of people drawn to Shibuya is diverse. It's particularly popular among young professionals, creatives, and expatriates who are drawn to its energetic atmosphere and cultural richness.

For these individuals, Shibuya isn't just a place to live; it's a lifestyle choice. The area's connectivity, with its extensive transport links, makes it a convenient and desirable location for those working in and around Tokyo.

However, every rose has its thorns, and Shibuya is no exception. One of the potential drawbacks is the constant hustle and bustle, which might not appeal to everyone, especially those seeking a quieter living environment.

The cost of living and property prices in Shibuya are also relatively high, reflecting its popularity and central location.

Additionally, the area can be quite crowded, especially during peak hours and weekends, which might be overwhelming for some.

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Why is Shibuya a nice place to live?

Shibuya isn't just a famous landmark; it's a vibrant place to live, offering a unique blend of lifestyle and culture.

Imagine walking through streets buzzing with energy, where traditional meets modern at every corner. It's a melting pot of trends, fashion, and entertainment, making every day living here an adventure.

One of the most striking aspects of Shibuya is its culture. It's like a canvas of contemporary Japan, painted with the strokes of youth culture, technology, and fashion.

Living in Shibuya means being at the heart of Tokyo's most dynamic and youthful district. Whether it's exploring the latest trends in Shibuya 109 or soaking in the unique vibe of the iconic Shibuya Crossing, there's always something new to experience.

The expat community in Shibuya is quite robust, thanks to its cosmopolitan atmosphere. Many foreigners find themselves at home amidst the district's diverse offerings and English-friendly environment.

The area's international vibe makes it easier for expats to blend in and find communities that share their interests and languages.

Living in Shibuya, however, does come with a price tag. It's one of the more expensive areas in Tokyo, reflecting its popularity and central location. Rent and day-to-day expenses can be higher compared to other districts. But many find the cost worthwhile for the experience and conveniences it offers.

Safety is another highlight of Shibuya. Like most of Tokyo, it's known for being exceptionally safe. The crime rates are low, and it's common to see people, including women and children, walking around safely at night.

When it comes to amenities and facilities, Shibuya is well-equipped. It's home to several well-regarded schools, including Shibuya Makuhari Senior High School, and top-notch healthcare facilities like the renowned Shibuya Kosei General Hospital.

For shopping and leisure, apart from the famous Shibuya 109, there's also the upscale Shibuya Hikarie, catering to all your shopping needs.

The quality of infrastructure in Shibuya is top-notch. The roads are well-maintained, and utilities like electricity and water supply are reliable. Internet connectivity is among the best in the world, ensuring that you're always connected.

This makes it an ideal place not just for living but also for working, especially for those in tech and creative industries.

Accessibility is another strong suit of Shibuya. It's incredibly well-connected to other parts of Tokyo and major transport hubs. The Shibuya Station is a major transportation hub, connecting multiple train and subway lines. This includes the JR Yamanote Line, which circles central Tokyo, making commuting to different parts of the city a breeze.

Public transportation options in Shibuya are abundant. Apart from trains, there are several bus routes, and taxis are readily available. This level of connectivity makes Shibuya not just a great place to live but also a convenient base for exploring the rest of Tokyo and beyond.

Living in Shibuya offers a dynamic and exciting urban experience. While it may be costly, the safety, amenities, and unbeatable location make it an attractive place for many, especially for those who enjoy being in the heart of a bustling metropolis.

How much does it cost to buy real estate in Shibuya?

If you need a detailed and updated analysis of the prices, rents and yields, you can get our full guide about real estate investment in Japan.

Buying property in Shibuya is a venture that combines the allure of urban living with the complexity of a highly dynamic real estate market.

When you're looking at residential properties in Shibuya, you'll find a diverse range from compact apartments to more spacious houses, and even luxury villas for those seeking exclusivity and opulence.

Apartments, especially, are quite popular due to the urban nature of Shibuya, catering to professionals and individuals who seek the convenience and excitement of city life.

The demand in Shibuya is particularly high for modern apartments, especially those that are well-connected to transport links and close to the area's numerous amenities.

The preference for apartments is driven by a mix of limited space in this densely populated area and the lifestyle sought by residents who want to be at the heart of Tokyo's vibrant culture and nightlife.

In terms of the property market, Shibuya features a mix of both new developments and resale properties. While new developments are always springing up, offering state-of-the-art amenities and modern designs, the resale market also remains active, with older properties often being sought after for their character and potentially lower price points.

Speaking of prices, the property market in Shibuya is on the higher end, reflecting its status as one of Tokyo's most desirable neighborhoods. Prices per square meter can vary widely, but it's not uncommon to see figures ranging from ¥1,000,000 to ¥3,000,000 per square meter, depending on the property's age, size, and exact location within Shibuya.

These values have been steadily climbing over recent years, a trend that's been seen across much of Tokyo, driven by factors like economic growth, population density, and the limited availability of land.

Looking ahead, the Shibuya real estate market is expected to remain robust. Factors like the ongoing redevelopment around Shibuya Station, which includes new office buildings, shopping complexes, and residential spaces, are likely to further boost the area's appeal.

Such developments not only enhance the lifestyle offerings of Shibuya but also tend to drive up property values in the surrounding areas.

Predicting the future of Shibuya's real estate market involves considering a variety of factors. Given Shibuya's status as a key commercial and cultural hub in Tokyo, the demand for properties is likely to remain high.

This sustained demand, coupled with the continuous modernization and development of the area, suggests that property values in Shibuya are likely to continue their upward trajectory in the coming years.

Specific factors that indicate potential increases in value include Shibuya's ongoing transformation with new commercial and residential developments, its ever-growing popularity as a global tourist destination, and its status as a trendsetting locale in one of the world's largest and most economically stable cities.

For anyone considering investing in Shibuya, these elements suggest a market that, while expensive, offers potential for strong value appreciation over time.

Where is the best area to buy a property in Shibuya?

When it comes to buying property in Shibuya the best area for you largely depends on what you're looking for in terms of atmosphere, property types, and your budget.

Shibuya is a diverse district with various neighborhoods offering different vibes and living experiences.

First, let's talk about the heart of Shibuya, around Shibuya Station. This area is bustling, filled with the energy of the famous Shibuya Crossing, numerous shops, restaurants, and entertainment options. It's perfect for those who love being in the thick of things. Properties here are mostly high-rise apartments, offering stunning city views and modern amenities.

Moving a bit away from the station, areas like Shoto and Yoyogi-Uehara offer a more residential feel. These neighborhoods provide a quieter living environment while still being close to the vibrant center of Shibuya.

You'll find a mix of apartments and houses here. The prices are still high but can offer more space and tranquility compared to the immediate vicinity of Shibuya Station.

An up-and-coming area within Shibuya worth considering is Higashi. It's becoming more popular due to its relatively more affordable prices and its proximity to both Shibuya and the fashionable neighborhood of Ebisu.

Higashi strikes a nice balance between accessibility and a more laid-back atmosphere, making it an attractive option for those looking to invest in a growing area.

In terms of where to look for a property, areas like Daikanyama and Nakameguro, although technically just outside Shibuya Ward, are highly desirable. These areas are known for their stylish cafes, boutique shops, and a more upscale, relaxed atmosphere.

They are great for those who want to be near Shibuya but prefer a more subdued environment. The properties here are a mix of modern apartments and traditional houses, with prices reflecting the desirability of the location.

On the contrary, areas immediately around Love Hotel Hill, despite being central, might not be advisable for everyone. This area is known for its nightlife and, as the name suggests, a concentration of love hotels.

While it has its own unique charm and is perfectly safe, it might not be the ideal residential area for those looking for a family-friendly environment or a quieter place to live.

Here is a summary table to help you visualize better. If you need more detailed data and information, please check our property pack for Japan.

Area	Atmosphere	Property Types	Price Range
Shibuya Station Area	Bustling, energetic	High-rise apartments	Very High
Shoto	Residential, quieter	Apartments, houses	High
Yoyogi-Uehara	Residential, calm	Apartments, houses	High
Higashi	Up-and-coming, accessible	Apartments, houses	Moderate to High
Daikanyama/Nakameguro	Upscale, stylish	Modern apartments, traditional houses	Very High
Love Hotel Hill	Nightlife, unique	Varied	Moderate

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Is there a strong rental demand in Shibuya?

Shibuya, known for its bustling streets and vibrant culture, is indeed a hotspot for rental demand.

The area attracts a diverse mix of tenants, each looking for different types of rental accommodations.

Firstly, there's a strong demand for both short-term and long-term rentals in Shibuya. Short-term rentals, such as vacation apartments or serviced apartments, are popular among tourists and business travelers who wish to stay in a central location with easy access to the rest of Tokyo.

On the other hand, long-term rentals are sought after by professionals, both local and expatriate, who work in and around Shibuya and want the convenience of living close to their workplace.

The target demographic for Shibuya rentals varies. For short-term rentals, the typical tenants are tourists and business travelers, drawn to the area's attractions and business hubs.

For long-term rentals, the demographic is broader, including young professionals, expatriates, and sometimes students attending nearby universities or language schools.

When it comes to the profiles of potential tenants, they tend to be individuals or couples without children, mainly due to the urban, fast-paced nature of Shibuya.

These tenants often look for modern, well-equipped apartments that offer a comfortable living space amidst the hustle and bustle of the city. They typically seek amenities like high-speed internet, modern appliances, and often, a view of the cityscape.

Specific areas within Shibuya that are particularly in demand for rentals include those around Shibuya Station for their unparalleled convenience, and quieter, more residential neighborhoods like Shoto and Yoyogi-Uehara.

These areas offer the best of both worlds proximity to the energy of central Shibuya, and a more relaxed living environment.

To reduce vacancy and attract tenants, landlords often focus on amenities that cater to the lifestyle of Shibuya's residents. This includes features like secure building access, modern and stylish interiors, fitness centers, and communal spaces. Properties that offer these amenities tend to be more appealing and can command higher rents.

Regarding the potential returns on investment, properties in Shibuya can be quite lucrative, especially given the high demand. While specific numbers vary, landlords can expect a healthy rental yield, particularly if their property aligns well with the needs and preferences of the target tenant demographic.

In terms of property types gaining more demand and potentially offering better yields, compact, well-designed modern apartments are increasingly popular. These properties appeal to the majority of Shibuya's rental market young professionals and expats who value convenience and quality living spaces.

Additionally, properties that offer a unique experience, like those with rooftop terraces or in boutique buildings, are also seeing increased interest.

Overall, Shibuya's rental market is strong, driven by its appeal to a diverse range of tenants. For investors and landlords, understanding the specific needs and preferences of these potential tenants is key to maximizing the returns on their property investments in this dynamic and ever-popular Tokyo district.

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Is it easy to buy a property as foreigner in Shibuya?

Before we answer the question, please know that we have an article dedicated to the experience of buying real estate as a foreigner in Japan.

Buying property as a foreigner in Shibuya, Tokyo, is relatively straightforward, but there are several nuances to be aware of.

Japan, including its vibrant Shibuya district, does not impose significant restrictions on foreigners purchasing real estate. This openness makes it an attractive market for international investors.

Firstly, there are no specific regulations or restrictions for foreign buyers in Japan. You don't need to have residency or citizenship to purchase property.

However, it's important to understand that while the act of buying property is unrestricted, securing financing from Japanese banks can be more challenging for foreigners, especially if you don't have a residence status in Japan.

The purchasing process in Shibuya typically follows the standard procedure in Japan. It starts with property hunting, followed by making an offer, signing a sales contract, and finally, completing the transaction.

One unique aspect of buying property in Japan is the involvement of a real estate agent and a judicial scrivener (Shihoshoshi), the latter being responsible for the legal documentation and registration of the property.

The primary risks associated with property investment in Shibuya are similar to those in other major cities. These include market fluctuations, potential natural disasters (like earthquakes, which Japan is prone to), and changes in the local economy.

Additionally, language and cultural barriers can pose challenges, particularly in understanding legal documents and negotiations.

Common pitfalls for foreign buyers often revolve around navigating these language and cultural barriers.

For instance, there might be misunderstandings regarding property rights, land ownership issues, or specific clauses in contracts that might not be standard in other countries.

Another unique aspect is the importance of earthquake resistance in building standards, which is crucial to consider when purchasing property in Tokyo.

Working with a local real estate agent and, ideally, a lawyer, is highly recommended. They can help navigate the complexities of the Japanese real estate market, assist with language barriers, and ensure that all legalities are properly handled.

They're also instrumental in providing insights into the local market, helping you make a more informed decision.

As for exit strategies for property investors in Shibuya, they typically include renting out the property for a steady income stream or selling the property when its value appreciates. The rental market in Shibuya is strong, thanks to its popularity among young professionals and expatriates.

Selling, on the other hand, could capitalize on Shibuya's consistently high demand for real estate, though timing the market is crucial.