London-based real estate consultancy Knight Frank reported buyers with US$1 million to spend can purchase 60 square meters, or 636 square feet, of prime property in Tokyo, almost double of what they can get in New York or Singapore and nearly triple that of Hong Kong.

Wealthy foreign residents, primarily making their second homes in Tokyo are leading this shift, and prices are on the upswing. The average price of a new central Tokyo apartment increased to a record 129.6 million yen (about US$863,000) between January and June, according to Japan’s Real Estate Economic Institute. Yet this figure was stretched by a few expensive units going on the market.

Outsized potential may exist in tourism hotspots, where increased visitors, tight luxury inventory and commercial and infrastructure upgrades offer potential for properties to appreciate even more. 

For instance, new bullet train developments, like the Linear Chuo and 2030 Sapporo lines will better connect large metropolitan areas in Japan and, according to Savills, potentially “improve overall business productivity, as well as open up new areas for real estate and tourism development, and should provide a major windfall for the Japanese economy.”

As opposed to existing homes, luxury buyers in Japan will choose from mostly new builds, much of it in the development pipeline, Chen said. While comparatively modest properties sometimes get listed at luxury prices, those languish on the market compared to the real deal. 

For luxury buyers looking for a second-home with strong upside potential in Japan, these three markets offer potential for benefiting from a tremendous amount of growth projects that will reshape the luxury real estate and tourism markets.

Located on the northern shore of Japan’s Kyushu Island, Fukuoka is the country’s fifth-largest city. Once a critical port for the Silk Road trade routes, it’s currently a tourist hotspot because of its blend of urban life and natural beauty and world-class dining, though it also harbors Silicon Valley aspirations.

Several redevelopment projects, including a revamp of Hakata Station and a slate of mixed-use towers in the Tenjin Station area are planned to be completed throughout the decade which will make the city more attractive to and functional for tourists.

Vacationers know Kyoto, on the island of Honshu, for its traditional architecture, historical temples and shrines. A further part of Kyoto’s attraction is its proximity to Tokyo, offering residents easy access (only three hours by bullet train) to one of the world’s great metropolises.

Earlier this year, Kyoto became the first city in Japan to move ahead with a vacant home tax. Proposed for 2026, unoccupied vacation homes are among buildings which may be taxed at least 0.7% annually of their dwelling value, with additional taxes owed based on the land value.

With its light powder snow, ski resorts and lengthy season for hitting the slopes, on the island of Hokkaido in Northern Japan, is known as one of the world’s great alpine areas. Niseko’s popularity among international tourists, particularly those from Australia and other Asian countries, has been on the rise.

Though the broader Hokkaido’s Q2 2023 Land Value LOOK Report posted price appreciation between 0% and 3%, similar to the prior quarter, Makishi said of these three areas, Niseko has the highest upside potential..” 


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