Real estate in Japan - statistics & facts
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.
House prices in Japan have been on the rise since late 2020, although price growth adjusted for inflation slowed in 2024. Prices for condominiums, both new and pre-owned, increased significantly, especially in Tokyo. Soaring material prices and construction delays played into this upward trend, but more recently, strong demand for condominiums from wealthy domestic and global investors let property prices surge. Except for some historically protected locations, Japan has no restrictions on foreign real estate property ownership, making it an attractive market for investors from other countries. Global investment was also driven by the weak yen, low interest rates, and the relative affordability of real estate in relation to comparable markets worldwide.
The weak yen and the booming tourism industry have fueled investment in Japan’s real estate industry. The financial environment and the country’s regulations on foreign real estate ownership have made it an attractive market for global investors. 2023 and 2024 were marked by strong demand for condominiums, especially in Tokyo. Rural parts of the country profited from investment in semiconductor plants and tourism. In March 2024, the Bank of Japan entered a period of monetary-policy normalization. As a result, variable mortgage rates increased for the first time in more than a decade. It remains to be seen what implications these changes will have for the yen and the Japanese real estate market.
Residential property market
A large and steady supply of new housing and a relatively small market for second-hand properties are characteristic of the residential real estate market in Japan. Combined with the country’s rapidly aging and shrinking population, this has resulted in a growing housing stock and rising vacancy rates, especially in less populated areas. A growing share of empty homes, many abandoned and dilapidated, stands in stark contrast with strong demand and soaring prices for homes and luxury properties in urban areas, like Tokyo.House prices in Japan have been on the rise since late 2020, although price growth adjusted for inflation slowed in 2024. Prices for condominiums, both new and pre-owned, increased significantly, especially in Tokyo. Soaring material prices and construction delays played into this upward trend, but more recently, strong demand for condominiums from wealthy domestic and global investors let property prices surge. Except for some historically protected locations, Japan has no restrictions on foreign real estate property ownership, making it an attractive market for investors from other countries. Global investment was also driven by the weak yen, low interest rates, and the relative affordability of real estate in relation to comparable markets worldwide.
Land prices are on the rise
Land prices rose for the third consecutive time in 2024. They remained most expensive in Tokyo, but smaller cities like Fukuoka outpaced the capital region in terms of price growth, and rural regions also saw the highest growth rates in years. Japan’s burgeoning tourism industry pushed commercial and residential land prices in tourist areas and spurred demand for hotels. Other, more rural parts of the country benefitted from the construction of several semiconductor plants, which resulted in land price increases in the surrounding area.The weak yen and the booming tourism industry have fueled investment in Japan’s real estate industry. The financial environment and the country’s regulations on foreign real estate ownership have made it an attractive market for global investors. 2023 and 2024 were marked by strong demand for condominiums, especially in Tokyo. Rural parts of the country profited from investment in semiconductor plants and tourism. In March 2024, the Bank of Japan entered a period of monetary-policy normalization. As a result, variable mortgage rates increased for the first time in more than a decade. It remains to be seen what implications these changes will have for the yen and the Japanese real estate market.
