Should you buy property in Japan now?

Authored by the expert who managed and guided the team behind the Japan Property Pack

Everything you need to know before buying real estate is included in our Japan Property Pack

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Japan. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At BambooRoutes, we explore the Japanese real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Tokyo, Osaka, and Fukuoka. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

What are current property prices in Japan and how have they been trending?

Japan's property market has reached record highs as of September 2025, with Tokyo leading unprecedented price growth.

Central Tokyo apartments now average ¥120M ($860,000) for a 70 m² unit, while the broader 23 Tokyo wards average ¥91.4M ($653,000).

Regional cities show more accessible pricing with Osaka, Kyoto, Fukuoka, and Sapporo ranging between ¥50-60M ($368,000-$430,000) in urban centers. Rural and regional towns maintain significantly lower prices at approximately ¥20M ($143,000) on average.

The trend has been dramatically upward, with Tokyo prices surging 64% over the past four years. Nationwide, land values increased 2.7% in 2024 alone, with continued growth throughout 2025.

This rapid appreciation reflects both domestic demand and significant foreign investment, particularly in Tokyo's premium districts.

How do property forecasts look for the next 1-3 years versus 5-10 years?

Short-term forecasts through 2027 remain optimistic with expected annual growth of 5-7% in Tokyo, 4-6% in Osaka, and up to 9% in Fukuoka.

The Japanese property market should see some moderation after recent rapid gains, but near-urban zones are projected to remain stable with slight growth. This period benefits from continued infrastructure investment and foreign buyer interest.

Long-term prospects over 5-10 years present a more complex picture with projected annual appreciation slowing to 3-5% in major cities. Demographic decline will increasingly impact suburban areas, with rising vacancy rates expected outside core urban centers.

Urban centers like central Tokyo, Osaka's inner city, and major regional hubs near new transport infrastructure will remain supported by inbound migration and global investment interest.

It's something we develop in our Japan property pack.

Which regions show the strongest short-term growth versus long-term stability?

For short-term growth through 2027, Tokyo's central wards lead the market with the highest appreciation potential.

Region	Short-term Growth (2025-2027)	Long-term Stability (5-10 years)
Tokyo Central Wards	Highest growth potential	Most stable, premium demand
Fukuoka	Up to 9% annual growth	Strong tech sector support
Osaka (Expo districts)	Expo-driven appreciation	Infrastructure-backed stability
Kyoto/Nagoya	Select districts growing	Linear Shinkansen benefits
Regional Cities	Moderate growth 3-5%	Mixed, depends on connectivity
Rural Towns	Limited growth	Structural demographic headwinds

What's the difference between central Tokyo, other major cities, and regional towns?

Central Tokyo commands premium prices with the highest liquidity but offers the lowest rental yields at approximately 3%.

The broader Tokyo metropolitan area (23 wards) provides a balance of appreciation potential and slightly better yields at 3.5%, with average prices of $653,000 for a 70 m² apartment.

Major cities like Osaka, Fukuoka, and Sapporo offer more attractive entry points at $368,000-$430,000 with superior rental yields of 4-5%. These markets provide strong demand from local populations and growing business sectors.

Regional towns present the most affordable options at around $143,000 but face significant challenges including lower liquidity, limited demand growth, and demographic decline affecting long-term prospects.

Foreign buyers typically find major regional cities offer the best balance of affordability, yields, and market stability compared to Tokyo's premium pricing or rural areas' higher risks.

How do apartments, single-family homes, and land plots compare?

Apartments dominate the Japanese urban market with the highest price per square meter but offer superior liquidity and stable rental returns.

New apartment units in urban centers command premium prices but provide the fastest resale potential, typically selling within weeks to a few months in high-demand areas like Tokyo and Osaka.

Single-family homes offer better value in suburban and rural areas, potentially delivering stronger yields and appreciation when tied to infrastructure projects. However, they require more maintenance and face longer selling periods.

Land plots represent the cheapest option in rural areas but remain expensive in city centers. Resale value depends heavily on development potential, and liquidity is generally the lowest among all property types.

For foreign investors, apartments in major cities provide the most straightforward investment approach with predictable returns and easier management compared to standalone homes or vacant land.

What are typical rental yields and how do they compare with financing costs?

Japanese rental yields vary significantly by location, with urban areas offering 3-4% gross yields while regional cities achieve 4-5%.

Tokyo apartments typically generate 3-4% gross rental yields, while Osaka, Fukuoka, and other major cities deliver 4-5%. Suburban and rural properties can reach 5% or higher, though with increased vacancy risks.

Current financing costs for foreign buyers range from 1-2.5% interest rates, making the yield-to-cost ratio favorable in most markets. Down payments typically require 20-35% of the purchase price.

Regional cities like Fukuoka and Sapporo offer the most attractive yield spreads, with 4.5% gross yields against financing costs below 2.5%. This creates positive cash flow opportunities for leveraged investments.

Rural and akiya (vacant) properties may offer higher stated yields but require careful analysis of actual occupancy rates and maintenance costs that can erode returns.

How accessible is financing for foreign buyers right now?

Financing accessibility for foreign buyers in Japan remains relatively favorable as of September 2025, with major banks offering competitive mortgage products.

Interest rates typically range from 1-2.5% annually, significantly lower than many Western markets. Down payment requirements generally start at 20% but many lenders prefer 25-35% for foreign applicants.

Large Japanese banks increasingly accommodate foreign buyers, especially those with local income sources or high net worth. Some institutions require proof of Japanese income or employment, while others focus on global financial capacity.

The application process typically takes 4-8 weeks, with documentation requirements including income verification, credit history, and property appraisal. Pre-approval can expedite the purchase process significantly.

It's something we develop in our Japan property pack.

What budget is required for prime locations versus suburban or rural areas?

Prime Tokyo and central Osaka locations require budgets of $393,000-$860,000+ for quality apartments as of September 2025.

1. **Prime Urban Markets ($393K-$860K+)** - Central Tokyo: $860,000+ for 70 m² apartments - Tokyo 23 wards: $650,000 average - Osaka city center: $393,000-$430,000 - Premium districts command significant premiums2. **Regional Cities ($368K-$472K)** - Fukuoka, Sapporo, Kyoto: $368,000-$400,000 - Secondary cities: $300,000-$350,000 - Good infrastructure and amenities included3. **Suburban Areas ($200K-$300K)** - Tokyo suburbs: $250,000-$350,000 - Regional suburbs: $200,000-$280,000 - Larger properties, longer commutes4. **Rural Properties ($143K and below)** - Regional towns: $143,000 average - Rural houses: $50,000-$150,000 - Akiya properties: Sometimes under $50,0005. **Additional Costs (3-7% of purchase price)** - Acquisition taxes, legal fees, agent commissions - Renovation costs for older properties - Ongoing maintenance and management fees

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Japan versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

What government regulations and taxes affect property ownership?

Japan maintains no additional restrictions for foreign property buyers, offering the same ownership rights as Japanese citizens for land and buildings.

Foreign buyers can own property outright with full title, except for agricultural land which requires special permits. No residency requirement exists for property purchase, though buying property doesn't provide a direct path to Japanese residency.

Acquisition costs include property acquisition tax (approximately 3-4% of purchase price), stamp duty on contracts, and registration fees. Annual fixed asset tax applies at 1.4% for both land and buildings.

Rental income from Japanese property is subject to Japanese income tax, with rates varying based on total income levels. Property owners must file annual tax returns for rental income exceeding certain thresholds.

Special considerations include akiya (vacant property) designations that may increase future costs, and inheritance tax implications for foreign owners planning long-term holdings.

How liquid is the Japanese property market for resales?

Property liquidity in Japan varies dramatically between urban centers and regional areas, with Tokyo offering the fastest resale potential.

Central Tokyo and major city apartments typically sell within weeks to a few months, especially for properties under ¥100M in desirable locations. High-demand neighborhoods maintain active buyer pools year-round.

Luxury properties above ¥120M may take longer to sell, often requiring 3-6 months to find qualified buyers. Premium properties face a smaller buyer pool but maintain value better during market downturns.

Regional and rural properties present significantly lower liquidity, often taking months to years to sell. Akiya and remote properties face the greatest challenges, with some requiring substantial price reductions to attract buyers.

Potential returns vary widely, with urban units holding value best and offering moderate appreciation, while rural and peripheral properties carry higher risks despite lower entry costs.

What risks could impact Japanese property values?

Japan's property market faces several structural and cyclical risks that investors must carefully evaluate before purchasing.

Risk Factor	Impact Level	Affected Areas
Demographic Decline	High	Rural areas, suburbs
Economic Stagnation	Medium	All regions, urban more resilient
Natural Disasters	Variable	Coastal, rural zones highest risk
Interest Rate Changes	Medium	All leveraged investments
Currency Fluctuation	Medium	Foreign investors
Aging Infrastructure	Low-Medium	Older properties, rural areas

What property strategy makes sense based on your specific goals?

Your optimal Japanese property strategy depends entirely on whether you're buying for personal use, rental income, or capital appreciation.

For personal residence, focus on central Tokyo or major regional cities with new apartments in the ¥55-100M range. This provides convenience, safety, and better resale potential when you eventually move.

Rental investment strategies should target mid-tier cities like Osaka, Fukuoka, or Sapporo where 4-5% yields are achievable with ¥50-65M budgets. These markets offer the best balance of yield, tenant demand, and management ease.

Capital appreciation plays should concentrate on Tokyo or Fukuoka central wards for short-term gains, or Osaka and Nagoya for reasonable long-term stability. Expect to hold 5-10 years for optimal returns.

Rural akiya properties present higher risk/higher reward opportunities for experienced investors comfortable with renovation projects and longer holding periods, but require significant local market knowledge.

It's something we develop in our Japan property pack.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. CNBC - Tokyo Property Price Surge
2. E-Housing Japan - House Prices in Japan
3. BambooRoutes - Japan Property Investment Guide
4. Expatis - Buying House in Japan Insights
5. Tokyo Portfolio - Japan Real Estate Market Trends
6. Nomura Research Institute - Japanese Real Estate Report
7. Real Estate Tokyo - Market Outlook 2024-2025
8. Reuters - Japan Property Price Analysis