Navigating the Real Estate Market in Japan: An Investor's Guide
Japan's real estate market is as diverse as its culture, spanning from the bustling metropolis of Tokyo to the serene prefecture of Wakayama. Investment opportunities vary significantly across the country, influenced by local economies, architectural advancements, and demographic shifts. This article delves into the intricate dynamics of Japan’s property market, providing vital insights for potential investors.
Ratio of population of foreigners (per 100,000 persons)
1904.5
Aging index
249.9
Rate of population change
-0.44%
Number of elementary schools (per inhabitable area 100 km2)
15.58
Number of lower secondary schools (per inhabitable area 100 km2)
8.14
Number of upper secondary schools (per inhabitable area 100 km2)
3.92
Percentage of persons employed
96.2%
Unemployment rate (Both sexes)
3.8%
Percentage of owned houses
61.2%
Number of retail stores (per 1,000 persons)
6.95
Number of eating and drinking places (per 1,000 persons)
3.95
Number of department stores and general merchandise stores (per 100,000 persons)
0.87
Number of traffic accidents (per 100,000 persons)
240.8
Number of recognitions of criminal offenses (per 1,000 persons)
4.53
Amount of damage by disasters (per capita)(30 years average)
￥9430
Prefectures in Japan
| Area | Median Price per m² | Growth over last 5 years |
|---|---|---|
| Tokyo | ￥818,181 | 30.2% |
| Kanagawa | ￥433,333 | 15.2% |
| Osaka | ￥304,761 | 16.5% |
| Okinawa | ￥293,095 | 2.6% |
| Saitama | ￥290,909 | 8.1% |
| Aichi | ￥282,085 | 3.7% |
| Kyoto | ￥280,000 | 3.5% |
| Chiba | ￥266,666 | 17.6% |
| Hyogo | ￥254,545 | 4.8% |
| Fukuoka | ￥250,000 | 11.1% |
| Miyagi | ￥222,222 | -6.7% |
| Hiroshima | ￥200,000 | 0.0% |
| Shiga | ￥176,697 | -1.3% |
| Kumamoto | ￥169,230 | 9.8% |
| Nara | ￥167,333 | 2.7% |
| Okayama | ￥160,000 | 6.7% |
| Shizuoka | ￥156,521 | -5.0% |
| Kochi | ￥152,000 | 52.0% |
| Gunma | ￥142,857 | 0.3% |
| Hokkaido | ￥139,130 | 22.2% |
| Oita | ￥138,927 | 24.0% |
| Tochigi | ￥125,925 | -19.2% |
| Saga | ￥124,137 | 7.6% |
| Ibaraki | ￥122,222 | -10.1% |
| Fukushima | ￥120,606 | -25.6% |
| Nagasaki | ￥117,333 | -3.6% |
| Ishikawa | ￥117,241 | 1.6% |
| Kagoshima | ￥114,285 | -12.5% |
| Ehime | ￥112,000 | -10.7% |
| Nagano | ￥111,556 | -0.2% |
| Yamanashi | ￥111,111 | 1.9% |
| Kagawa | ￥106,478 | 6.5% |
| Yamaguchi | ￥106,190 | -1.4% |
| Miyazaki | ￥91,987 | -20.6% |
| Fukui | ￥90,944 | -1.4% |
| Tokushima | ￥90,322 | -2.5% |
| Mie | ￥90,066 | -13.4% |
| Akita | ￥88,888 | 9.2% |
| Iwate | ￥88,000 | -15.6% |
| Gifu | ￥87,692 | -18.2% |
| Yamagata | ￥85,714 | -2.0% |
| Tottori | ￥79,130 | -10.5% |
| Aomori | ￥73,684 | -9.3% |
| Wakayama | ￥72,413 | -25.5% |
| Shimane | ￥69,545 | -11.9% |
| Niigata | ￥66,666 | -33.3% |
| Toyama | ￥65,714 | -29.2% |
Over the years, the median total transaction price for apartments in Japan has shown a steady increase from ¥19,000,000 in 2005 to ¥24,000,000 in 2023. In contrast, houses have seen a more volatile price journey, peaking at ¥40,000,000 in 2005 and equating to apartment prices at ¥24,000,000 in 2023. This trend highlights an increasing preference or value alignment between apartment and house living standards.
Median total transaction price
Apartment vs detached house over year of transaction
The median price per square meter provides a clearer insight into the evolving market, showing a gradual increase for apartments from ¥400,000 in 2005 to ¥500,000 in 2023. House prices per square meter, however, peaked at ¥358,208 in 2005 and saw a more significant fluctuation, ultimately decreasing to ¥190,476 in 2023. This illustrates the varying demand and valuation for different property types over time.
Median price per m² over construction year
Apartment vs detached house over year of transaction
An examination of property prices by age shows a steep depreciation for apartments in the first year, from ¥840,000 per m² for new constructions to ¥727,272 per m². This trend continues but stabilizes around the 30-year mark. Houses depreciate less sharply and tend to stabilize sooner, reflecting perhaps a lasting value in land over structure.
Median price per m² by building age
Apartment vs detached house over age of building
Tracking the price trends of apartments by construction cohorts reveals the impact of evolving building standards, especially in earthquake resistance. For instance, apartments constructed between 2000-2005 saw their median price per m² jump from ¥763,636 in 2005 to ¥600,000 in 2023, showcasing the premium on newer, safer buildings.
Median price per m² over construction year cohort
Actual price trend of Apartment built in specific years
Houses built in the same period (2000-2005) also reflected a similar trend but with less volatility, rising from ¥430,000 per m² in 2005 to ¥178,378 in 2023. This less dramatic change points to a sustained, albeit evolving, trust in the construction quality of houses.
Median price per m² over construction year cohort
Actual price trend of House built in specific years
Japan's real estate market is intricate and multifaceted, influenced by a variety of factors including aging demographics, technological advances in earthquake resistance, and changing lifestyle preferences. While the market shows a general trend towards the appreciation of well-located and contemporary properties, regional differences are significant. Investors should note the premium placed on newer constructions and the potential for properties to stabilize in value over time, making Japan an intriguing market for both residential and commercial investment opportunities.