Real Estate - Japan

Japan

The Real Estate market market in Japan is expected to reach a projected value of €23.37tn in 2024.
Within the market, Residential Real Estate holds the largest share with a projected market volume of €13.17tn in 2024.
It is anticipated that the market will experience an annual growth rate of 0.61% between 2024 and 2029 (CAGR 2024-2029), resulting in a market volume of €24.09tn by 2029.
When compared globally, United States is projected to generate the highest value in the Real Estate market sector, reaching €122.4tn in 2024.
The demand for luxury apartments in Tokyo has surged, driven by wealthy buyers seeking prime locations and high-end amenities.

Key regions: United States, China, Japan, Germany, United Kingdom

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Analyst Opinion

The Real Estate market in Japan has been experiencing significant growth and development in recent years.

Customer preferences: Japanese consumers have shown a strong preference for investing in real estate due to its stability and potential for long-term growth. Many individuals and businesses view real estate as a safe and reliable asset class, particularly in a country known for its economic stability. Additionally, with low interest rates and limited investment options in other sectors, real estate has become an attractive option for both domestic and international investors.

Trends in the market: One major trend in the Japanese real estate market is the increasing demand for residential properties in urban areas. As Japan's population continues to urbanize, there is a growing need for housing in cities. This has led to a surge in residential development projects, particularly in Tokyo and other major metropolitan areas. Developers are focusing on creating high-quality, modern housing options that cater to the needs and preferences of urban dwellers. Another trend in the market is the rise of co-living and co-working spaces. With the changing work culture and a growing number of freelancers and entrepreneurs, there is a demand for flexible and affordable workspaces. Co-living spaces, which offer shared housing and communal amenities, are also gaining popularity among young professionals and students. These trends reflect the evolving preferences of Japanese consumers, who are seeking more flexible and community-oriented living and working environments.

Local special circumstances: One unique aspect of the Japanese real estate market is the high demand for rental properties. Many Japanese individuals and families prefer to rent rather than buy a home due to the high cost of homeownership and the flexibility that renting provides. This has led to a strong rental market, with a wide range of rental properties available to meet the diverse needs of tenants. Additionally, the aging population and declining birth rate in Japan have contributed to an increase in demand for senior housing and assisted living facilities.

Underlying macroeconomic factors: Several macroeconomic factors have contributed to the growth of the real estate market in Japan. The country's economic stability, low interest rates, and favorable government policies have created a conducive environment for real estate investment. Additionally, the government's efforts to attract foreign investment and stimulate economic growth have also had a positive impact on the real estate market. These factors, combined with the unique preferences and needs of Japanese consumers, have created a thriving and dynamic real estate market in Japan.

Methodology

Data coverage:

Figures are based on value of residential and commercial real estate, average real estate value, residential estate transactions and leases.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data from international organizations and industry associations. Next we use relevant key market indicators and data from country-specific associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.