Property In Japan: A Property Market Guide for Foreign Buyers

Japan’s property market offers a truly eclectic mix – from city high‑rises and condos to countryside kominka and machiya (traditional townhouses) – each with unique ownership rules and lifestyles. Since foreigners can purchase property in Japan with the same rights as Japanese citizens, I thought it would be helpful to give insight into the real estate market in Japan for those interested in making a property purchase.

From “Kodate” Houses to Machiya Townhouses: Your Primary Type of Property

Japanese real estate housing stock, for both living and investment purposes, is dominated by two patterns: single‑family detached homes and multi‑unit buildings. Single‑family homes (戸建て, kodate) stand alone on their own land – common in suburbs and rural areas – and appeal to families or anyone seeking privacy. Multi‑unit buildings include low‑rise apartments (アパート, apāto) and mid-rise to high‑rise “manshon”. Condominiums (マンション, manshon) are individually owned units in larger complexes; owners share land rights and pay monthly fees for common facilities.

A unique Japanese category is machiya – traditional wooden townhouses found in old cities like Kyoto. Machiya are narrow but deep homes with traditional facades and inner gardens. Many have been updated internally for modern living, but their wooden structure and local zoning rules affect renovation and financing . Similarly, kominka (old farmhouses) in rural areas offer rustic charm but often need major renovation.

Another category, possibly the most famous now-a-days, is akiya (vacant houses). Japan has millions of empty homes (over 9 million, ~14% of all homes). Local governments sometimes list these at extremely low prices — even a ¥0 property price! — through “akiya banks” to attract new residents. These can be bargains for foreigners who plan to buy property and renovate, but usually require a commitment to fix up older property. Akiya is an extra deep topic that deserves its own article, so I’ll leave it at that for now.

Summary of Popular Property Types

• Detached House (Kodate): Private yard, own land. Good for families or those wanting space—often rebuilt every 20–30 years.
• Condominium (Manshon): Unit ownership + shared land. Popular in cities for convenience; requires management fees.
• Apartment (Apāto) / Share House: Typically rentals for single renters; low cost, but short leases.
• Machiya/Kominka: Traditional townhouses or farmhouses; charming but may have strict zoning.
• Akiya (Vacant Houses): Cheap or free rural homes; need renovation and carry resale risk.
  
  

Note: there are additional specific, more niche types of residences such as danchi (multi-unit apartments) or nise-tai jūtaku (two-family/two-generation house), but those are less common, but could be a great real estate investment!

Urban, Suburban, Semi‑Rural, & Rural Lifestyles

Urban areas like central Tokyo, Osaka, and Nagoya offer bustling city living: high‑tech amenities, jobs, dining, and shopping. Tokyo’s 23 wards are an international mix with excellent English signage and services — areas like Shibuya, Roppongi, or Shinagawa feel welcoming to foreigners. City properties tend to appreciate steadily but command higher prices per square meter and offer smaller living spaces than many Western cities.

Suburban neighborhoods—for example, the bedroom communities an hour from central Tokyo or Osaka — feature more detached homes, schools, and parks. Cities like Machida (Tokyo), Koshigaya (Saitama), and Takarazuka (Hyogo) are well-known suburban areas.

Semi‑rural villages and countryside towns range from farming hamlets to scenic mountain villages. Land and houses can be very cheap (well under the ¥10–¥20 million range often times) but job opportunities and English services are limited. Slower pace, lower pollution, and larger properties come with thinner infrastructure and a need for Japanese language skills. Fujiyoshida (Yamanashi), Gujo (Gifu), and Yufu (Oita) are just a few examples of semi-rural living, while Shirakawa (Gifu), Tsuwano (Shimane), and Tōno (Iwate) are rural, countryside towns.

Lifestyle real estate in Japan includes:

• Beach Areas & Islands: perhaps a more difficult place to find and buy property in Japan, Okinawa’s resorts and Honshu’s coasts (e.g., Shonan, Izu) for vacation homes.
• Mountain Resorts & Ski Areas: rapidly growing markets to buy a house in Japan are Nagano, Niigata, and Hokkaido ski towns like Niseko and Furano; a great investment in Japan.
• Onsen Towns: Hot‑spring cities like Hakone, Kusatsu, and Beppu, offering leisure lifestyles and strong seasonal rentals are places many are investing in Japanese real estate.
• Historic City Centers: Kyoto’s machiya, Fukuoka’s seaside/urban blend, and Nagoya’s urban core — each with unique zoning and rental rules which can be great for property value.
  
  

Hot Markets, Investment Subsidies, & Trends for Investing in Japanese Property

• Government Subsidies & Free Housing: Some rural programs pay you to relocate (up to ¥600,000 for individuals, ¥1,000,000 for families) or offer free homes in exchange for a multi‑year residency commitment.
• Rental Yields (APY): Japan’s gross rental yields average ~4%, with areas like Tokyo at ~3.4% and other cities around 4–5%. Compare to 4–5% in many Western markets. Vacancy rates are low (Tokyo >96%). Short‑term rentals can yield more but face local restrictions.
• Price Appreciation: Tokyo home prices rose ~8–10% in 2024, Osaka condos up ~9–10%, Kyoto ~4–5% annually since 2020, and Okinawa +7.3% in 2025. Resort areas like Niseko and Furano have seen double‑digit gains. Rural land outside big cities is mostly flat or declining.
• Popular Regions for Foreigners: Tokyo and Osaka for urban hubs; Kyoto for culture; Okinawa and Hokkaido for resorts; coastal Chiba and Izu for weekend homes. All regions are open to foreign buyers—no nationality restrictions.
• Foreigner‑Friendly Infrastructure: Major cities offer English‑language support, but expect Japanese paperwork and personal seals. Bilingual agents and lawyers help bridge gaps.
  

Quick Key Considerations for Foreign Buyers

• No Purchase Restrictions: Anyone can buy property in the Japanese real estate market.
• Visa vs. Ownership: Buying or investing in property doesn’t grant residency; secure your visa separately.
• Language Barriers: Contracts are in Japanese; use a bilingual real estate agent or intermediary services.
• Financing: Banks favor permanent residents; non‑PR buyers need large down payments, specialized lenders, or financing from their home country.
• Renovation Norms: Expect to rebuild every few decades; pre‑owned homes sell cheaply but need upgrades.
• Zoning & Land Use: Check local rules on rebuilding, agricultural land, and historic districts.
• Taxes & Fees: Registration, transfer, acquisition, annual fixed‑asset, and city‑planning taxes apply; non‑residents need a tax agent
• Vacant House Risks: Verify tax status and renovation costs before buying an akiya; some are hard to resell.
• Cultural & Legal Process: Faster closings than the West but require seals and Japanese‑style contracts; agent fees are typically 3%.
  
  

Japan’s property market is stable, transparent, and open to foreign buyers. From Tokyo manshons to Okinawa villas, there’s a property for nearly every lifestyle and budget. By understanding property types, location choices, and the legal/investment landscape, you can buy a property or find investment opportunities in Japanese real estate with confidence.