Yes, the analysis of Tokyo's property market is included in our pack
The question of 'the best neighborhood to buy a property in Tokyo' does not have a one-size-fits-all answer.
Some of you are buying to live there, while others want to make the best investment possible. Individual preferences and circumstances matter.
That’s why the article below is covering every intent.
At BambooRoutes, when we write a blog post or when we update our our property pack for Japan, we want to bring solutions and cover different aims in a clear and organized way.
Enjoy the read, and please remember that we are not financial or investment experts. This article is for informational purposes only.
To improve the readability and user-friendliness of this article, we will categorize neighborhoods in Tokyo into various groups, including budget-friendly options, emerging hotspots, and areas with high rental demand, among others. Consequently, some neighborhoods may appear in multiple categories and be mentioned several times throughout the article.
Make a profitable investment in Tokyo
Better information leads to better decisions. Save time and money. Download our guide.
How is the real estate market in Tokyo?
The real estate market in Tokyo is a fascinating and dynamic sector, constantly evolving and attracting a diverse range of buyers, including a significant number of foreigners.
What makes Tokyo's market particularly attractive are its unique strengths that you won't find elsewhere.
Firstly, Tokyo is renowned for its blend of ultra-modern living and rich cultural heritage. This city is a hub for technological innovation, which is reflected in its real estate. You'll find properties with cutting-edge smart home technologies alongside traditional Japanese architectural elements, a combination rare in other parts of the world.
People are drawn to buying in Tokyo for various reasons. The city's robust public transportation system, renowned safety record, and high standard of living are key factors.
Additionally, Tokyo's status as a global financial and business hub makes it a prime location for professionals looking to be at the center of economic activity.
Foreign interest in Tokyo's real estate market is particularly high. The city's reputation for stability, both economically and politically, makes it an attractive investment.
Foreign buyers see Tokyo as a safe haven for their investments, expecting a steady appreciation in property values.
Speaking of the market's dynamism, one data point that stands out is the resilience of Tokyo's property prices, even during global economic downturns. The market here has a history of maintaining stability and showing gradual appreciation, unlike the volatile swings seen in some other global cities.
A unique and positive aspect of Tokyo's real estate market is the emphasis on space-saving and efficient design. Due to the limited space in the city, properties are designed to maximize usability and functionality in compact areas.
This ingenious use of space is something distinctly Tokyo, offering a living experience that combines practicality with a touch of modern sophistication.
Looking to the future, several factors indicate that properties in Tokyo will continue to gain value.
The city's ongoing infrastructure developments, like the expansion of transportation networks and the construction of new commercial and residential buildings, promise to enhance its appeal.
Moreover, Tokyo's continual draw as a tourist destination and a center for global events adds to its allure, ensuring that the real estate market remains vibrant and attractive for years to come.
Top neighborhoods in Tokyo to consider for living
Areas in Tokyo that are budget-friendly
If you're looking to buy property in Tokyo on a budget, there are a few neighborhoods you might want to consider.
Here is a summary table. Below, we will give more details.
| Neighborhood | Average Price/sqm | Property Types | Residents | Strengths | Weaknesses |
|---|---|---|---|---|---|
| Adachi | ¥500,000 | Older apartments, new constructions | Elderly, young families | Community feel, green spaces | Distance from central Tokyo, older housing |
| Nerima | ¥650,000 | Mix of old/new apartments, houses | Families | Family-friendly, close to central Tokyo | Lacks nightlife, entertainment |
| Itabashi | ¥600,000 | Older apartments, some new developments | Students, young professionals, elderly | Affordability, community atmosphere | Distance from central Tokyo, older buildings |
Adachi
Adachi is known for its affordability in Tokyo.
The reason it's cheaper is because it's relatively far from central Tokyo, which makes it less attractive for those who prioritize proximity to the city center. However, the area is seeing developments in infrastructure and connectivity, which could lead to an increase in property values in the future.
You'll mainly find older apartments and some newly constructed ones in Adachi. The average price per square meter in Adachi is roughly ¥500,000, making it quite affordable compared to other parts of Tokyo. The residents are a mix of elderly people and young families.
The strength of Adachi lies in its local community feel and green spaces, but its distance from central Tokyo and older housing stock can be seen as drawbacks.
Nerima
Nerima offers a good balance between affordability and proximity to central Tokyo.
It's cheaper because it's considered a suburban area, but it's well-connected by public transport, which adds potential for property value growth. The types of properties available are a mix of old and new apartments, single-family homes, and some townhouses. The average price per square meter in Nerima is around ¥650,000.
Nerima is popular among families due to its peaceful environment and good schools. Its strengths are its family-friendly nature and relative closeness to central Tokyo.
However, the area lacks the vibrant nightlife and entertainment options found in more central districts.
Itabashi
Itabashi is another affordable area, mainly because it's on the northern edge of Tokyo and has been overlooked in favor of more central locations.
However, with ongoing developments and better transport links, property values are expected to rise. The area mostly has older apartments and some new developments. The average price per square meter in Itabashi is approximately ¥600,000.
Itabashi is home to a diverse population, including students, young professionals, and elderly residents. The district's strengths are its affordability and community atmosphere.
However, its distance from central Tokyo and the age of many of its buildings could be seen as negatives.
Don't lose money on your property in Tokyo
100% of people who have lost money in Japan have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
Areas in Tokyo that are popular and upscale
When looking to buy property in Tokyo, three neighborhoods stand out as upscale and popular choices. These neighborhoods each have their unique character and draw different types of residents.
| Neighborhood | Average Price per sqm | Resident Profile | Strengths | Weaknesses | Future Outlook |
|---|---|---|---|---|---|
| Minato | 2,000,000 Yen | Wealthy professionals, Expats, Celebrities | Central location, High-end amenities | High cost, Dense development | Continued demand |
| Shibuya | 1,500,000 Yen | Young professionals, Creatives | Trendy, Diverse options | Noisy, Crowded | Ongoing redevelopment |
| Chiyoda | 2,500,000 Yen | High-ranking professionals, Politicians | Central, Cultural significance | Less vibrant nightlife, Expensive | Stable high demand |
Minato
Minato is a prime spot for property buyers in Tokyo, known for its luxury and prestige.
It's expensive, mainly due to its location near central Tokyo and its upscale residential areas. Properties in Minato are predominantly high-end apartments and condominiums, with an average price per square meter around 2 million yen.
The area is favored by wealthy professionals, expatriates, and celebrities, contributing to its vibrant, cosmopolitan atmosphere. Minato's strengths include its proximity to business districts, high-end shopping, dining, and entertainment options, as well as its excellent transportation links.
However, the high cost of living and the density of development are potential drawbacks. Minato is expected to remain a sought-after area, maintaining its hype due to its unbeatable location and status.
Shibuya
Shibuya, famous for its bustling crossing, is another expensive neighborhood in Tokyo.
It appeals to younger, affluent professionals and creatives, and is known for its trendy vibe. The area predominantly offers modern apartments and some older, smaller houses, with average prices around 1.5 million yen per square meter.
Shibuya's strengths lie in its energetic atmosphere, diverse shopping and dining options, and excellent connectivity to other parts of Tokyo.
However, the area can be noisy and crowded, and lacks green spaces. The ongoing redevelopment projects in Shibuya are likely to sustain its popularity and hype, making it a continually desirable location for property buyers.
Chiyoda
Chiyoda, encompassing the Imperial Palace, is a prestigious and expensive area.
It's popular among high-ranking professionals, politicians, and affluent families. The properties in Chiyoda are a mix of luxurious apartments and historic homes, with prices averaging around 2.5 million yen per square meter.
The neighborhood's strengths include its central location, rich cultural and historical significance, and tranquil, green spaces.
However, the area is less vibrant in terms of nightlife and can be quite expensive. Chiyoda's proximity to political and economic centers ensures its continued popularity and status as a top choice for upscale property buyers.
Make sure you understand the real estate market in Tokyo
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.
Areas in Tokyo that emerge as new hotspots
Let's explore these emerging neighborhoods in Tokyo that, according to our local partners and our customers, are getting quite a bit of buzz lately.
| Neighborhood | Average Price per sqm | Resident Profile | Strengths | Weaknesses | Future Outlook |
|---|---|---|---|---|---|
| Nakano | 800,000 Yen | Students, Young professionals, Artists | Arts scene, Community feel | Distance from center | Growing popularity |
| Koenji | 850,000 Yen | Artists, Musicians, Young professionals | Cultural richness, Community | Less upscale, Eclectic | Continued trendiness |
| Sumida | 750,000 Yen | Families, Young professionals | Historical landmarks, Affordability | Fewer luxury options, Longer commute | Rising popularity |
Nakano
Initially a quiet residential area, Nakano has become increasingly popular, especially among younger crowds and creatives.
Its transformation is largely due to the development of quirky shops, cafes, and cultural spaces. The area offers more affordable housing compared to central Tokyo, with average prices around 800,000 yen per square meter. It's attracting a mix of students, young professionals, and artists, drawn by its blend of urban convenience and local charm.
The strengths of Nakano include its growing arts scene and community feel, while weaknesses might be its relative distance from Tokyo's center and fewer high-end amenities.
The neighborhood is expected to continue growing in popularity as it develops a unique identity, offering a balance of affordability and lifestyle appeal.
Koenji
Known for its indie music scene and vintage shops, Koenji has evolved from a sleepy area to a hip, vibrant neighborhood.
It's becoming popular for its unique character, creative community, and more affordable property prices in Koenji, around 850,000 yen per square meter. Koenji appeals to artists, musicians, and young professionals seeking a more laid-back, culturally rich area.
Its strengths include a strong sense of community, diverse cultural experiences, and a growing number of cafes and bars.
However, it lacks the polish of more upscale areas and can feel a bit too eclectic for some. The trendiness of Koenji is likely to continue, attracting those who value culture and community over luxury.
Sumida
Sumida, once overshadowed by more famous areas, is gaining popularity due to its recent redevelopment, including Tokyo Skytree.
The neighborhood offers a mix of traditional and modern housing at an average price of 750,000 yen per square meter. It's attracting families and young professionals drawn to its blend of old and new Tokyo.
The strengths of Sumida include its historical landmarks, growing number of amenities, and relative affordability. Weaknesses might include fewer high-end luxury options and a slightly longer commute to central Tokyo.
Sumida's ongoing development suggests it will continue to rise in popularity, offering a unique combination of tradition and modernity.
Make a profitable investment in Tokyo
Better information leads to better decisions. Save time and money. Download our guide.
Top neighborhoods in Tokyo to invest in property
Areas in Tokyo with a strong rental demand
If you're considering buying real estate in Tokyo for renting it out, these neighborhoods with high demand for rentals should be considered.
| Neighborhood | Tenant Profile | Property Type | Average Rent | Rental Yield | Tips for Higher Income | Weaknesses |
|---|---|---|---|---|---|---|
| Shibuya | Young professionals, expats | 1-bedroom, studios | ¥200,000/month | 3-5% | Near Shibuya Crossing, Harajuku | High cost, noise |
| Minato | Diplomats, executives | 2-bedroom luxury | ¥300,000-¥500,000/month | 3-4% | Roppongi, Azabu areas | High investment cost |
| Setagaya | Families, long-term residents | Family-sized homes | ¥250,000-¥400,000/month | 3-4% | Near schools, parks | Less central, higher investment |
Shibuya
Shibuya is a bustling hub known for its vibrant nightlife and fashion, attracting a younger crowd, particularly professionals and expats.
The demand for rental properties in Shibuya is high, driven by its central location and excellent transportation links. Tenants often seek modern one-bedroom apartments or studios, valuing convenience over size. Rental income for a one-bedroom apartment in Shibuya averages around ¥200,000 per month.
The rental yield in Shibuya typically ranges from 3% to 5%. To maximize rental income, focus on properties near popular areas like Shibuya Crossing or Harajuku, as these locations ensure lower vacancy rates and attract higher-paying tenants.
However, the initial property costs can be high, and the area can be noisy, which might deter some tenants.
Minato
Minato attracts a more upscale demographic, including diplomats, executives, and expats, due to its proximity to many embassies and multinational corporations.
This area is in demand for its luxury apartments and high-end amenities. Tenants in Minato prefer spacious two-bedroom apartments or larger, with rents for such properties averaging around ¥300,000 to ¥500,000 per month.
The rental yield in Minato is about 3% to 4%. Properties near Roppongi or Azabu, known for their exclusivity and upscale living, can command higher rents.
The key to success in Minato is investing in properties with unique features or luxury amenities. However, the high investment cost and the potential for longer vacancies due to a smaller tenant pool are drawbacks.
Setagaya
Setagaya offers a more residential and family-friendly environment, attracting families and long-term residents.
The demand in Setagaya is for larger homes or apartments with multiple bedrooms. The average rent for a family-sized home in Setagaya can range from ¥250,000 to ¥400,000 per month.
The rental yield in Setagaya is typically around 3% to 4%. Properties close to good schools or parks, like those in the Shimo-Kitazawa or Sangenjaya areas, are particularly appealing.
Focusing on family-oriented amenities can boost rental appeal. However, the area is less central, which might not appeal to those who prioritize proximity to the city center, and the larger property sizes mean higher initial investment costs.
Don't lose money on your property in Tokyo
100% of people who have lost money in Japan have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
Areas in Tokyo where property prices might increase in the future
In these areas in in Tokyo you can still find properties at a reasonable price, with room for appreciation as the neighborhoods develop.
| Neighborhood | Tenant Profile | Property Type | Average Price/Night | Tips for Higher Income | Weaknesses |
|---|---|---|---|---|---|
| Shibuya | Tourists, business travelers | Small apartments | ¥10,000-¥15,000 | Near Shibuya Station | Noise, competition |
| Shinjuku | Tourists, occasional business travelers | Studios, 1-bedroom | ¥12,000-¥18,000 | Near Shinjuku Station | Crowded, noise |
| Asakusa | Cultural experience seekers | Traditional-style, modern | ¥8,000-¥12,000 | Blend of traditional and modern | Less central, hotel competition |
Shibuya
Shibuya is a magnet for tourists and short-term visitors due to its iconic status and lively atmosphere.
The demand for short-term rentals is high in Shibuya, with tenants primarily being tourists or business travelers. They usually look for smaller, well-equipped apartments or unique accommodations. Amenities like Wi-Fi, a kitchen, and proximity to major attractions are important.
The average price per night in Shibuya is around ¥10,000 to ¥15,000. Properties near Shibuya Station or popular tourist spots can command higher prices and have lower vacancy rates.
However, the area can be loud, and competition for short-term rentals is fierce, requiring distinct features or exceptional management to stand out.
Shinjuku
Shinjuku, known for its entertainment and shopping districts, is another popular area for short-term rentals.
The tenants in Shinjuku are mainly tourists and occasional business travelers looking for convenience and easy access to nightlife. Compact studios or one-bedroom apartments with modern amenities in Shinjuku are preferred.
The average nightly rate in Shinjuku is about ¥12,000 to ¥18,000. Properties near Shinjuku Station or close to landmarks like the Tokyo Metropolitan Government Building tend to perform well.
Investing in properties with unique designs or extra facilities can increase appeal. However, the area can be quite crowded, and noise can be an issue for some guests.
Asakusa
Asakusa, known for its traditional atmosphere and historic sites like Senso-ji Temple, appeals to tourists seeking a more cultural experience.
Short-term tenants often look for traditional-style accommodations like ryokans or modern apartments with a local touch. The average nightly rate in Asakusa ranges from ¥8,000 to ¥12,000.
Properties that offer a blend of traditional Japanese aesthetics with modern comforts tend to be more popular. Proximity to cultural sites is a key factor.
However, the area is less central and might not appeal to those looking for modern Tokyo's hustle and bustle. Competition with traditional hotels and ryokans is also a challenge.
Make sure you understand the real estate market in Tokyo
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.