Cost of land still rising as foreign investors snatch up properties
Japan's average land price rose for the fourth consecutive year, with hubs for foreign tourists logging some of the sharpest increases.
The price of land used for tax calculation purposes in 2025 rose 2.7 percent year on year on a nationwide average, the National Tax Agency said July 1.
It was the largest rate of increase since current calculation methods were adopted in 2010.
In the village of Hakuba in Nagano Prefecture, which hosts one of the nation's most popular ski resorts among international tourists, the cost of land jumped 32.4 percent from a year earlier. This was the steepest increase in the nation for the second year in a row.
A tax accountant familiar with the local market said foreign investors have snapped up closed 'ryokan' inns on the cheap and converted them into accommodations targeting foreign tourists since about 10 years ago.
The city of Osaka is home to 90 percent of the nation's 'minpaku' private lodgings based on the Law on National Strategic Special Zones. Under it, overseas tourists are allowed to stay at unoccupied apartment units and other similar facilities.
About 40 percent of those facilities in Osaka are operated by Chinese individuals or businesses.
The National Tax Agency's announcement revealed that the price of land climbed 17.9 percent from a year earlier in the city's Naniwa Ward where there were 1,036 private lodgings based on the law as of the end of March.
Analysts attributed the rise primarily to increased transactions of apartments and other facilities that can be converted into private lodgings.
Osaka as a whole had 5,587 private lodgings based on the law at the end of 2024. Of these, 2,305 were affiliated with Chinese individuals or businesses, according to a survey by Yoshihisa Matsumura, who is a professor of tourism geography at Hannan University.
Chinese investors, many from Beijing, Shanghai and other major cities, often purchase an entire existing apartment building or rebuild an old house, spending tens of millions of yen to hundreds of millions of yen per property.
Overseas real estate investors have increased their presence in Japan.
Real estate think tank Urban Research Institute Corp. reported that foreign-affiliated companies poured a combined 1.36 trillion yen ($9.51 billion) into domestic properties in fiscal 2024, double the amount of the previous year.
The 'wagaya Japan' real estate information website for foreigners mainly receives inquiries from English-speaking countries.
In recent years, many outside Japan have wanted to acquire properties for investment returns or as vacation homes.
One sought a property with a view of Mount Fuji, while another wanted to live in a town with an active streetcar.
'Customers seem to be attracted by Japan's health care and educational environments as well as security,' said Haruki Noma, president of the company that operates the website.
Noma said he does not think the popularity of Japan is a passing fad as many people actually want to relocate to the country.
Tokyo attracted the largest amount of real estate investments in the world during the first three months of 2025, overtaking New York, according to the real estate service company Jones Lang LaSalle.
In Japan, demand for office space in urban centers remains strong due partly to a shift away from remote work in the years following the novel coronavirus pandemic.
The office vacancy rate in Tokyo was 2.5 percent during the January-March period, according to Jones Lang LaSalle. Comparatively, it was 15.8 percent in New York, 12.4 percent in Beijing and 8.9 percent in London for the same period.
Kenichiro Yunome of the Urban Research Institute said he expects Japan to continue attracting foreign investments.
'As the global economy faces uncertainties due to U.S. tariffs and other factors, Japan is seen as a comparatively 'safe asset' with its stable economy and real estate market,' Yunome said.
(This article was written by Yuta Hanano and Takashi Ichida.)
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