Market trends

Renters Getting Squeezed: Average rent in Osaka down but so is living space

According to Kinki REINS, the average rent for a “mansion-type” type apartment in Osaka City fell 2.9% to 69,100yen (about 579usd at today’s exchange rate) in the second quarter (April to June) of 2015 compared to the same quarter in 2014.

Growing Demand

However, the average size of an apartment leased during the period also fell by 4.5% to 34.41 square meters (about 370 square feet). In 17 of Osaka’s 24 wards, the average apartment leased was smaller than in the same period last year.  

At the same time, the number of residential leases signed in the city spiked 19.9% year-on-year, to 7,792.

This high demand has caused the average rent per square meter in the city to actually increase 1.7% to 2,009yen per square meter for the April to June period. While the average rent fell in 16 of Osaka’s wards, the average rent per square meter actually rose in 19 wards.

This is because people are moving into smaller apartments amid growing demand for rental housing, especially in the central wards. At the same time, the number of smaller households is growing.

As Savills explains in a recent report, as of January 2015, Osaka Prefecture had over 3.94 million households, about 9% more than 10 years earlier. In the same period, the number of households in Osaka’s 24 wards  increased by roughly 11%, while the Central Six Wards (Kita, Chuo, Tennoji, Naniwa, Nishi, Fukushima) posted rapid growth of around 36%.

In the same report Savills explains how this demographic trend is affecting the demand for residential housing: “Ongoing urbanisation and a trend towards smaller household sizes (as more people marry later, divorce or remain single), has led to an increase in the number of single-occupier and DINKS (Dual Income, No Kids) households in Osaka. This, combined with improved economic sentiment in recent years, has created robust occupier demand for relatively compact multi-family apartment units, especially those located centrally or with convenient access to local transport hubs.

Most Expensive Wards

The most recent quarter’s data bears out the general trend that Savills describes. There is high demand in Osaka’s central wards, which also is where the highest rents are found.

  • Fukushima: Average rent 92,100yen, up 2.3% year-on-year
  • Nishi: Average rent 83,600yen, down 6.8% but the average apartment size also shrunk by 10.54% to 35.06 square meters, which caused the price per sqm to increase by 4.0%. The number of residential leases signed in the period also surged on a year-on-year basis by 36.3%.
  • Kita: Average rent 83,500yen, down 4.1%, with  average apartment size holding about the same at 35.48 square meters.
  • Chuo: Average rent 78,100yen, down 2.5%, but up 4.3% year-on-year in terms of average price per sqm. Chuo ward had the highest number of residential leases signed in the period, at 1,116, a spike of 35.3%.
  • Tennoji: Average rent 71,300yen, down 6.9%, but up 3.1% in terms of price per square meter, with the average apartment size shrinking by 9.8%.

Click on the charts below for details by ward:

Source: Kinki REINS
Source: Kinki REINS
Source: Kinki REINS
Source: Kinki REINS
Source: Kinki REINS
Source: Kinki REINS
Source: Kinki REINS
Source: Kinki REINS

You may also be interested in: Tokyo’s Growing Population: What it means for renters and investors.


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