The International Real Estate Price and Rental Index has noted that among 15 cities worldwide, mansion prices in Tokyo and Osaka have experienced the most significant increases. The yen depreciation, active investment by overseas investors, and the relatively low cost of Japanese real estate compared to other major cities have all contributed to this continued rise in mansion prices.
TOKYO, JAPAN (Business Northeast) – The ongoing depreciation of the yen has also spurred a surge in international tourists visiting Japan for sightseeing and shopping. In April, the number of inbound tourists to Japan reached a new record, and total spending by international visitors in Japanese department stores hit an all-time high for a single month. Many investors are turning to the Japanese real estate market alongside this influx of international tourists. According to the “International Real Estate Price and Rent Index” released by the Japan Real Estate Research Institute, mansion prices in Tokyo and Osaka continue to rise, making them the cities with the highest growth among 15 cities worldwide. This rise is driven by the increasing participation of overseas investors in the Japanese real estate market and strong demand from wealthy local buyers, highlighting the importance of exchange rate and domestic factors in the real estate market.
The report shows that demand for Mansions in Tokyo and Osaka is strong, and transaction prices have increased by 1.5% compared with October 2023, making them the cities with the most significant growth in Mansion prices among the 15 major cities in the world. Although the increase in luxury housing prices in Osaka has slowed down compared to the previous survey, it is still one of the cities with the most significant increase. In contrast, Mansion prices in Hong Kong, Shanghai, and Beijing fell most significantly by 2.0%, 0.6%, and 0.5%, respectively. Although Hong Kong implemented housing tax reduction measures in February 2024 to boost domestic demand in China, it has yet to lead to a reversal in housing prices.
In addition to analyzing the rising and falling trends in Mansion prices, this survey also discussed the prices of luxury homes. One of the data sets the price index per tsubo (3.3 square meters) of luxury homes in Motoazabu, Minato-ku, Tokyo at 100.0, and in Osaka at 68.2. The price index of the world’s 15 major cities, from high to low, is Hong Kong (268.2), London (207.5), Taipei and Shanghai (165.6), New York (144.6), and Singapore (140.2). The price per square meter of luxury homes in Tokyo is less than half of that in Hong Kong and is lower than the price per square meter of luxury homes in other important cities, which has become one of the reasons for the increase in demand and housing prices.
Experts said the yen’s exchange rate has been low in the past 30 years. Compared with the surrounding areas with high housing prices in China, Hong Kong, Taiwan, and South Korea, Japanese real estate is beautiful for overseas investors. In addition, there are no nationality restrictions for foreigners to purchase real estate in Japan, the rental rate of return, and permanent property rights. These three points attract many overseas investors to buy and rent out houses. In addition to the overseas investment community, many overseas job seekers have spotted the business opportunities of the 2025 World Expo in Osaka and have come to inquire about renting or purchasing a house. There is an apparent increase in the number of inquiries and transactions.
Leasing is one of the main ways many home buyers obtain returns on their investments, so the change rate of the rental index of mansions in each city compared with the previous year has become an essential reference data when investing. According to these statistics, the city with the highest rental change rate for mansions is Sydney (up 6.0%), followed by Singapore (up 2.9%) and Jakarta (up 2.0%). Tokyo and Osaka ranked fourth and sixth, rising 1.3% and 1.0% respectively. Rising rental costs will positively stimulate real estate buying and selling prices.
The International Real Estate Price and Rent Index are compiled by the Japan Real Estate Research Institute in April and October each year for 15 cities, including Tokyo, Osaka, Seoul, Beijing, Shanghai, Hong Kong, Taipei, Singapore, Kuala Lumpur, Bangkok, Jakarta, Ho Chi Minh City, Sydney, New York, and London to conduct surveys and collect data on rents and prices of Office and Mansions in the cities to understand changes in the real estate markets in major cities around the world.
