Real Estate - Japan | Statista Market Forecast

The Real Estate market market in Japan is expected to reach a projected value of US$25.20tn in 2024.
Within the market, Residential Real Estate holds the largest share with a projected market volume of US$14.20tn in 2024.
It is anticipated that the market will experience an annual growth rate of 0.40% between 2024 and 2029 (CAGR 2024-2029), resulting in a market volume of US$25.71tn by 2029.
When compared globally, United States is projected to generate the highest value in the Real Estate market sector, reaching US$132.0tn in 2024.
The demand for luxury apartments in Tokyo has surged, driven by wealthy buyers seeking prime locations and high-end amenities.

Definition:

The real estate market refers to the transaction of properties, including residential properties (such as houses and apartments) and commercial properties, such as office buildings and industrial properties. Apart from property sales, this market includes leases and the value of real estate.

Structure:

The real estate market comprises residential and commercial real estate. The residential real estate market covers real estate transactions and leases, and residential real estate leases are divided into apartment and house leases.

Additional information:

The market contains the following KPIs: real estate value aggregated for all countries and regions, average real estate value, real estate transaction revenue, number of real estate sold, number of leased and owned real estate, average room per resident, and dwelling type shares. The dwelling type shares comprise the share of the population that lives in houses and apartments. These shares are displayed for real estate owners and real estate renters as well.

Residential real estate (houses and apartments)
Commercial real estate (office buildings, retail spaces, warehouses, industrial properties)

Real estate agencies
Construction companies
Accommodation services, such as Airbnb
Commercial real estate leases and transactions
Publicly owned buildings used by the local government
Buildings used for public health care services

The Real Estate market in Japan has been experiencing significant growth and development in recent years.

Customer preferences: Japanese consumers have shown a strong preference for investing in real estate due to its stability and potential for long-term growth. Many individuals and businesses view real estate as a safe and reliable asset class, particularly in a country known for its economic stability. Additionally, with low interest rates and limited investment options in other sectors, real estate has become an attractive option for both domestic and international investors.

Trends in the market: One major trend in the Japanese real estate market is the increasing demand for residential properties in urban areas. As Japan's population continues to urbanize, there is a growing need for housing in cities. This has led to a surge in residential development projects, particularly in Tokyo and other major metropolitan areas. Developers are focusing on creating high-quality, modern housing options that cater to the needs and preferences of urban dwellers. Another trend in the market is the rise of co-living and co-working spaces. With the changing work culture and a growing number of freelancers and entrepreneurs, there is a demand for flexible and affordable workspaces. Co-living spaces, which offer shared housing and communal amenities, are also gaining popularity among young professionals and students. These trends reflect the evolving preferences of Japanese consumers, who are seeking more flexible and community-oriented living and working environments.

Local special circumstances: One unique aspect of the Japanese real estate market is the high demand for rental properties. Many Japanese individuals and families prefer to rent rather than buy a home due to the high cost of homeownership and the flexibility that renting provides. This has led to a strong rental market, with a wide range of rental properties available to meet the diverse needs of tenants. Additionally, the aging population and declining birth rate in Japan have contributed to an increase in demand for senior housing and assisted living facilities.

Underlying macroeconomic factors: Several macroeconomic factors have contributed to the growth of the real estate market in Japan. The country's economic stability, low interest rates, and favorable government policies have created a conducive environment for real estate investment. Additionally, the government's efforts to attract foreign investment and stimulate economic growth have also had a positive impact on the real estate market. These factors, combined with the unique preferences and needs of Japanese consumers, have created a thriving and dynamic real estate market in Japan.

Data coverage:

Figures are based on value of residential and commercial real estate, average real estate value, residential estate transactions and leases.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data from international organizations and industry associations. Next we use relevant key market indicators and data from country-specific associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

The global housing market has slowed amid high inflation and soaring borrowing costs. Homeownership is one of the most universal signs of success and prosperity: It serves both as a source of stable and secure housing and a long-term investment. After the global financial crisis, property prices rose in many countries and especially in advanced economies. For more than a decade after that, the housing market has been on an upward trajectory, culminating in the housing boom during the COVID-19 pandemic. However, housing shortages in highly competitive markets, the recent rapid house price growth, soaring inflation, and consequently, some of the highest mortgage interest rates recorded in the past 10 years have led to the market cooling.

Japan is a country with very limited space for buildings, as mountains make up about three-quarters of its landmass. The country’s fairly large population is concentrated in major cities. The metropolitan area of Tokyo, home to a staggering one-third of the population, is the center of economic and political activity. As such, it boasts the highest property prices across the country. Driven by the weak yen, a tourism boom, and global investment, property and land prices surged in 2023 and 2024. Even some rural regions, which are generally confronted with economic stagnation and depopulation tendencies, have been affected by this trend.

The real estate market all around the world has been affected by the global pandemic. This historic event has changed the way we live, consume, and work. The real estate market in the Asia-Pacific region has experienced some turbulent and diverse changes depending on the sector, property type, and location. The commercial real estate segment, which includes offices, retail outlets, logistics centers, and many more, had to adapt to new conditions and demands. Furthermore, residential real estate suffered decreases in rental and capital values in some areas, with the exception of prime real estate, which experienced healthy growth in most locations.

Soaring inflation and aggressive mortgage interest rate hikes cooled the European housing market after a nearly decade-long period of growth. Since 2015, house prices in the European Union have grown by about 50 percent. When inflation in Europe started to rise at an alarming rate in 2021, the European Central Bank increased interest rates, resulting in substantially higher mortgage interest rates and a decline in homebuying. But how important is homeownership for Europeans?

Real Estate - Japan

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