Below, we outline the most significant policies and developments affecting the Japanese real estate market in 2025, with practical insights for international investors, homeowners, and developers.
1. End of Negative Interest Rates and the Return of Monetary Tightening
After more than a decade of ultra-low interest rates, the Bank of Japan (BOJ) ended its negative interest rate policy in March 2024 and signaled a gradual move toward normalization. The current policy rate in 2025 hovers around 0.1% to 0.25%, still low by global standards but a clear shift from previous stimulus-era lending.
Impact on Property Market:
Mortgage rates have slightly increased, but financing remains affordable.
Domestic buyers are cautiously adjusting, while foreign investors still find Japan’s borrowing costs favorable.
Tokyo, Osaka, and Nagoya continue to attract long-term investment due to stable rental demand.
You may search the latest property listing in Nagoya on our website by clicking here.
2. Accelerating Urban Redevelopment and Infrastructure Expansion
Government-led redevelopment projects are injecting new life into city centers and transport hubs. Major initiatives in 2025 include:
Osaka-Kansai Expo 2025, expected to draw over 28 million visitors.
Continued progress on the Linear Chuo Shinkansen (maglev), linking Tokyo to Nagoya in just 40 minutes by 2027.
Redevelopment of districts such as Shibuya (Tokyo), Umeda (Osaka), and Tenjin (Fukuoka).
Impact on Property Market:
Land values are rising near infrastructure upgrades.
Foreign interest is surging in pre-redevelopment zones for capital appreciation.
Mixed-use developments and luxury residences are reshaping major downtown areas.
You may search the latest property listing in Osaka on our website by clicking here.
3. Foreign Investment-Friendly Policies Remain Unchanged
Japan remains highly open to foreign real estate investment, with no restrictions on ownership for non-residents. In fact, the government is actively encouraging international interest through:
Streamlined visa options (Investor/Business Manager Visa).
Promotion of regional tourism and hospitality investment.
Growing English-language support for real estate transactions.
Impact on Property Market:
High-end apartments and income properties in Tokyo, Kyoto, and Niseko continue to see foreign demand.
Real estate-related tourism (holiday homes, hotel investments) is growing, especially in Hokkaido and Okinawa.
Investors are increasingly targeting undervalued areas with tourism potential.
4. Aging Population and Rural Property Challenges
Japan’s population continues to decline, especially in regional and rural areas. As of 2025, more than 28% of the population is over 65, and over 13% of homes nationwide are vacant—a trend driven by aging homeowners and depopulation.
To counteract this, the government supports programs such as:
Akiya Bank platforms: online listings of vacant homes for low or no cost.
Regional revitalization grants for foreign entrepreneurs and settlers.
Tax breaks for renovating and occupying old properties.
Impact on Property Market:
Bargain opportunities exist in the countryside, but require caution regarding legal rights, renovation costs, and infrastructure.
Urban markets remain strong, while rural areas need careful due diligence.
Some investors are using akiya homes for guesthouses or artist retreats.
5. Green Building Incentives and Earthquake-Resilient Construction
Japan continues to push for energy efficiency and disaster resilience through strict building codes and tax incentives. In 2025, key policies include:
ZEH (Net Zero Energy Home) subsidies for eco-friendly housing.
Reduced fixed asset taxes for certified long-life quality housing (長期優良住宅).
Mandatory earthquake resistance standards for all new builds.
Impact on Property Market:
New homes and condos meeting ZEH or “long-life” certification are more attractive to buyers and investors.
Older properties without seismic retrofitting may face lower demand or require upgrades before resale.
Developers are emphasizing sustainable features to attract eco-conscious buyers.
In 2025, Japan’s property market is navigating an era of moderate rate increases, strong urban development, and growing foreign interest, all underpinned by long-term demographic challenges. For foreign investors and homebuyers, this means:
Urban properties remain a strong bet, especially near redevelopment zones.
Low-interest borrowing is still accessible, but may gradually tighten.
Rural bargains exist, but require careful planning and legal support.
By understanding Japan’s evolving policy landscape, international buyers can make informed, strategic decisions—whether seeking stable rental yields, long-term capital growth, or a personal base in Japan.
At Hikari Property, our bilingual team can assist with everything from selecting promising properties to navigating local regulations and community integration.
Get in touch with us, Japan might be your next home !