In the global real estate market, rental growth has stalled in Europe, the Americas, and Southeast Asia, but Tokyo has shown strong recovery. As of October 2024, Tokyo ranks first globally among 15 major cities for both new apartment prices and office rents, with office rents increasing by 1.3% over the past six months, marking the first time in nine years it has topped the global rankings. This growth is fueled by corporate relocations and expansions, leading to a drop in vacancy rates. Tokyo and Osaka have once again topped the market, signaling continued prosperity in the real estate sector. Despite the scarcity of development land and tightening supply, the demand for high-end properties remains strong. The depreciation of the yen has attracted significant foreign capital, further fueling the market’s momentum.
According to the Shinjuku Real Estate Economic Research Institute, the 266 residential units in the iconic “THE Toyohama Tower Marine & Sky” in central Tokyo sold out on the first day of release. The average price reached an astonishing 144.71 million yen, demonstrating the heated demand in Tokyo’s property market. On the global price increase ranking, Sydney came in third with a 1.4% increase, driven by tight housing supply, while rental prices continued to rise, with apartment rents topping global surveys. In contrast, New York’s housing price increase slowed significantly to only 0.1%, dropping to eighth place, as high interest rates began to take their toll. Despite the general rise in global housing prices, Japan’s real estate market still offers high value for money. For example, the unit price of apartments in the Minato Ward of Tokyo serves as a benchmark, with Osaka’s apartment prices at only 68.9, far below international high-priced cities like Hong Kong (258.7), London (206.3), Shanghai (158.3), and New York (140.8).
With enthusiastic participation from Chinese investors, Japan’s real estate market is experiencing a new surge, sparking the interest of local Japanese buyers who worry that their ideal properties might be “scooped up” by Chinese buyers. One of the surprising advantages of buying property in Japan is the low entry barrier—there are no restrictions based on nationality or visa status, and properties come with permanent ownership rights, including the land. Additionally, the actual living space is generous, with extra features like balconies enhancing the overall appeal of even smaller homes, making them feel more spacious and bright. For overseas buyers seeking investment opportunities, Japan offers an irresistible allure with the yen serving as a safe-haven currency, stable asset growth, and attractive investment thresholds.
Japan’s real estate market stands out due to its permanent ownership rights, low entry barriers, and affordable property sizes. However, investors should still pay attention to market trends, evaluate the value for money of properties, and focus on cities with strong recovery momentum like Tokyo. Additionally, monitoring international price increases and selecting regions with stable growth is crucial. The yen’s safe-haven status should also be considered as part of the investment strategy. Lastly, understanding local property policies is vital to ensure legal compliance and avoid risks.
