- Throughout the pandemic, the regional residential markets, including Osaka, Nagoya, and Fukuoka, have performed better than Tokyo, which experienced larger corrections after years of stronger rental growth.
- Due to shorter commute times, as well as lower population densities compared to Tokyo, remote work in regional markets has not become as prevalent as Tokyo, which could have limited the impact from the pandemic.
- Osaka's residential market has remained relatively stable during the pandemic, although rental growth has slowed down.
- Nagoya's residential market has also been relatively stable with occupancy improving and rents continuing to increase.
- Fukuoka's residential market has outperformed others, supported by favourable demographic trends. However, recent signs of a slowdown may indicate that the growth seen thus far might have been too rapid.
- There have been noticeable portfolio transactions that included residential properties in the regional markets.
Regional residential markets remain stable
The regional residential markets remain steady supported by stable demographic trends. Unlike Tokyo, the pandemic has not substantially affected demand in those markets, and rents have generally continued to grow moderately. With urbanisation expected to continue, the fundamentals of these regional markets appear sound.
Savills Research & Consultancy