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Tokyo has emerged as one of the most promising cities in the world for real estate investment, with exceptional growth in both residential and office markets.
As of October 2024, Tokyo leads the global rankings for new residential apartment price increases and office rent growth, surpassing other major cities like New York and Hong Kong. This robust growth trend contrasts sharply with sluggish growth in Europe and Southeast Asia, as well as declines in China, highlighting Tokyo’s strong and resilient market.
Property investors around the world are paying attention to Tokyo, drawn by favorable economic conditions such as low interest rates and a relatively affordable property market compared to other global hubs. With rising land prices, limited supply, and strong capital appreciation prospects, Tokyo’s real estate market is poised for continued growth.
For foreign investors, the city offers a stable and transparent environment, though navigating the market requires understanding local business norms and working with a trusted real estate professional who has a proven track record and the language skills to explain complex details in their own language.
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Encapsulating the trend in the last few years, new residential apartment prices in Tokyo have surged, ranking first globally with a 1.5% increase in October 2024, a rise that mirrors the growth seen in Osaka. This upward trend is primarily driven by constrained supply and escalating demand from affluent domestic buyers and international investors, drawn by favorable exchange rates and low mortgage rates.
In stark contrast, cities such as New York experienced a modest 0.1% increase, while Hong Kong saw a notable 3.1% decline. Tokyo’s real estate remains exceptionally affordable compared to other major global markets: for instance, the price per square meter in Tokyo’s Minato Ward (¥100) is substantially lower than in Hong Kong (¥258.7), London (¥206.3), or New York (¥140.8). With residential properties priced at approximately half the cost of those in these cities, Tokyo offers exceptional value for discerning investors.
Strong demand supported by strong fundamentals
Japan’s property investment market, one of the largest in the world, has become increasingly attractive to overseas investors, particularly wealthy Asians, due to its stable social, political, and economic environment. Within Japan, Tokyo, ranked third in the Global Power City Index, has stood out as a prime investment destination with its strong economy, high livability, and excellent infrastructure.
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- Japan offers a freehold property system, allowing non-resident foreigners to purchase both residential and commercial properties with land ownership.
- Tokyo is also a well-established rental market with high occupancy rates, so long-term yields in Tokyo’s residential sector continue to remain stable.
- Property prices, including in the previously overlooked re-sale market, have been consistently rising, while still offering opportunities for value-conscious buyers to enter the market.
- The growing demand for land and property in Tokyo, fueled by population inflow, has led to high transaction volumes and reliable returns on investment.
- Japan’s transparent legal framework and lack of ownership restrictions for foreign buyers make it an accessible and attractive market for international investors.
Given Tokyo’s attractions compared to other global cities and the inherent conditions supporting favorable growth and value trends in the market, it is not surprising that foreign interest in Japanese residential real estate is at an all-time high.
However, as with any financial decision, investors are urged to tread carefully. Making a real estate purchase or investment will likely be one of the biggest transactions that most people make in their lives; and to make such a purchase in a foreign country requires even more caution and due diligence.
What to look for in a local real estate company
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Unfortunately, it is also true that even in Japan, there are unscrupulous actors in the industry. It is very important for buyers to ascertain that the company is trustworthy and will communicate clearly and proactively with them in their own language.
Indeed, one of the first decisions a foreign buyer needs to make is how to go about looking for a local partner and what qualities to look for in the real estate company they will be working with.
A full-service company that speaks your language
Among the leading players offering specialized services to international buyers, Hokushin Fudosan, with 60 years of experience in the local real estate market, is a highly recommended real estate company in Tokyo, renowned for its multilingual support (in English, Mandarin, and Cantonese) and comprehensive investment services.
Hokushin Fudosan has been assisting international clients with their professional experience, helping them navigate Japan’s property market with ease. Their multilingual team serves clients from diverse backgrounds, including Hong Kong, Taiwan, Singapore, Malaysia, and other parts of Asia, as well as the U.S. and Europe.
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Hokushin Fudosan, for example, has assisted clients with every segment of the market, from residential, to commercial and investment properties.
Buyers should also think ahead to how they want to live in the property or how to manage it as an investment. This is especially true if they are buying a property as a non-resident. A reliable property manager can help you build income and appreciation from your investment; and to keep it in good condition.
Advice from Hokushin Fudosan
Hokushin Fudosan, a reputable real estate company in Japan with 60 years of industry experience, is a top choice for foreign buyers. The company offers a comprehensive range of services, including consultation, property acquisition, development, and management.
Known for its expertise in the market, Hokushin Fudosan has developed its own popular residential brands, COCOCUBE and COCOFLAT, which are in high demand among investors interested in en-bloc residential buildings.
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- Can non-resident foreigners buy property in Japan?
- Can non-resident foreigners open bank accounts in Japan?
- Can a non-resident foreigner obtain bank loans in Japan when buying a property?
- Can foreigners obtain a visa if buying a property in Japan?
- Is it possible to negotiate on the property price?
They have answered these and many other questions in detail on their FAQ page on the website.
To further support investors, Hokushin Fudosan has prepared a detailed White Paper titled “Navigating Property Purchases in Japan: A Complete Guide to Procedures & Fees for Foreigners.” This resource outlines essential steps and provides answers to frequently asked questions, helping guide customers through the process. It is now available for download here.
With respect to general advice for foreign investors, Hokushin Fudosan emphasizes the importance of choosing a trustworthy brokerage company with a proven track record in the industry and which can communicate fluently with you in your language.
As one of the leading multilingual real estate companies in Tokyo, Hokushin Fudosan exemplifies these characteristics and offers a comprehensive, one-stop service that investors can rely on to cover every aspect of the property investment process.
If you’re considering investing in Tokyo’s real estate market or buying a house, please contact them for a free consultation and advice specific to your situation, in your language, whether it is English, Mandarin or Cantonese.