Savills

Publication

Japan Regional Residential Markets - March 2021

Positive demograhic trends provide sound fundamentals for some markets

  • The Japanese residential market has been attracting the interest of overseas investors as the global economy has been disrupted by several events, including the pandemic.
  • Greater Tokyo is undoubtedly the most popular market due to strong fundamentals supported by social and economic trends.
  • Regional hubs such as Osaka, Nagoya, and Fukuoka also pose opportunities as there is steady intra-regional migration flow to major regional cities.
  • The COVID-19 pandemic has changed lifestyles and preferences for residences, possibly creating some longlasting impact on the market.
  • Unlike the logistics market, it may be worth considering why domestic investors, who possess market insight and plenty of capital, are not as enthusiastic about the residential market.

 

Map 1

GRAPH 11 | Rental Index, Q1/2016 to Q4/2020

As the COVID-19 pandemic has disrupted the real estate markets globally, Japan’s residential sector is drawing the interest of investors due to its stable and defensive nature. While Tokyo remains the most popular market in the country, major regional cities that have exhibited sound demographic trends should present opportunities especially to those who seek higher yields.

Savills Research & Consultancy