For the second consecutive year, Tokyo has been ranked as the top destination for property investment in the Asia Pacific region, based on findings released on November 27th from a survey conducted by the Urban Land Institute and PwC.
Japan remains a popular choice for investors, thanks to its low interest rates. Osaka, the nation's second-largest metropolitan area, rose to second place in the Emerging Trends in Real Estate Asia Pacific 2025 report.
The whole report delves further into other property types across APAC such as data centers, logistics facilities, hospitality and more.
Below are some report sample quotes as pertaining to Japanese residential properties.
The perspectives contained only focus on general attitudes of institutional investors which largely align, but present differences also, with the average homeowner.
The information presented is to illustrate trends for informational purposes only. Real estate ownership is a hyper-local venture so always consult with a licensed realtor for your property specific needs.
Chapter 1 Excerpts: Sounding out the Bottom
Last year, for example, Japan was by far the most popular Asia Pacific destination for cross- border investors, to the extent that it was often the only market in which they were willing to deploy capital. That popularity persists today, although institutional buying in Japan fell in 2024 as concerns grow over prospects for domestic rate hikes (Page 7)
Page 3 of report.
According to a Tokyo-based developer: “If you haven’t already secured the general contractor and negotiated your price, you need to pause, in many cases. There’s just huge demand and very little capacity among the major general contractors, so they’re turning down work left and right, and they’re pricing new jobs at record levels. There’s now 40 to 50 percent inflation on construction costs in Japan – something unheard of in anyone’s career." (Page 17)
Page 11 of report.
Chapter 3 Excerpts: Property Type Outlook
Growing investor demand for what are known as “living assets” – a collection of residentially oriented typologies also known as the “beds” sector – has transformed what was previously an investment backwater into an increasingly sought-after asset class.
According to a Tokyo-based fund manager: “If you’re [strategically] focused on growth, the question becomes: where can you achieve rental growth and what structural trends are the ones that could potentially support that? The residential living sector is a good example, where a combination of affordability issues, the growth in the number of households, the absence of institutionally owned residential product, changes in what people want, social mobility, etc., are all drivers for growing demand for renting in one form or another. And it’s not just a story about a product that resonates well with the occupants, it’s also a story that resonates well with buyers.” (both paragraphs from Page 40)
Page 40 of report.
Download the full report below.
Further Reading:
2025 Emerging Trends in Real Estate Full Report (Urban Land Institute & PwC)
