Real Estate & Investment

Why Everyone Starts With Tokyo — And Why the Best Opportunities Are Often Elsewhere

Many overseas buyers begin their Japan property search in Tokyo. Here’s why that makes sense — and why a good investment strategy doesn’t always stop there.

Ayako Yamaguchi — Japan Real Estate Strategist & Owner’s Representative

Many overseas buyers begin their Japan property search in Tokyo.

That makes sense. It’s the city they know, and often the place they first visited Japan. Information is also easiest to find there — listings, agents, and news coverage, almost all centered on one city.

For many buyers, Tokyo is also the right answer. It has liquidity, infrastructure, and a market that’s easy to understand from overseas. I never tell a client to avoid it. But I also don’t assume it’s the end of the search. Sometimes it’s just the beginning.

A property search usually begins with a location. A good investment strategy begins with a purpose. That difference is the reason I don’t stop at the obvious first answer.

What the Numbers Actually Show

Tokyo’s price growth is real, and it has continued at a remarkable pace. The average price of a new condominium across Tokyo’s 23 wards reached a record ¥137.84 million in fiscal 2025 (April 2025–March 2026), up 18.5% from the year before. Overseas-based buyers are becoming a more visible presence in this segment of the market too: an official land ministry survey found they accounted for 3.5% of surveyed new condominium purchases in the 23 wards in the first half of 2025, up from 1.6% for all of 2024 — more than double, even though the overall total remains modest.

Outside the Tokyo metropolitan market, price trends look very different. In 2025, average new-condo prices fell in several other major cities even as Tokyo climbed: down 2.1% in Sendai, 11.4% in Nagoya, 2.3% in Hiroshima, and 5.2% in Fukuoka. Worth noting: these are still large, well-known cities, not the smaller regional and rural markets — like the one I’ll be writing about in the weeks ahead — where the price gap with Tokyo tends to be far wider still.

Tokyo vs. Regional Japan, Side by Side

Sources: Real Estate Economic Institute Co.; Ministry of Land, Infrastructure, Transport and Tourism (MLIT) housing surveys; Japan Statistics Bureau, 2023 Housing and Land Survey.

A note on that vacancy figure: it doesn’t mean “one in seven homes is for sale.” Japan’s vacancy survey counts all empty dwellings, including ones tied up in inheritance, ones held off-market by owners, and true long-term abandonments. It reflects a structural pattern, not a ready-made shopping list. But it does mean the housing stock outside Tokyo is far looser than Tokyo’s own numbers suggest, and that gap is part of why regional markets can move very differently from the capital.

None of this means Tokyo is a bad investment. Demand is real, and so is the price growth — currently stronger than what many other Japanese markets are experiencing. It does mean, however, that a buyer who only ever looks at Tokyo is choosing the most competitive and expensive segment of a much larger market, often without realizing there was a choice to make.

Why the Imbalance Exists

Part of the reason is simple: information. Tokyo has decades of English-language coverage, familiar international real estate platforms, and agents who specialize in overseas clients. Smaller regional markets often have far less international-facing information available. A property outside the major cities can be a genuine opportunity and still be almost invisible to someone searching from London or California, simply because nobody has translated the listing, written about the area in English, or explained why it might be worth a second look.

That gap between “quietly available” and “actually visible to overseas buyers” is where I spend most of my time. It isn’t about talking clients out of Tokyo. It’s about making sure they know the rest of the market exists before they commit to its most competitive and expensive segment.

It’s also worth saying plainly: a lower price by itself is not an opportunity. A property still needs legal clarity, market clarity, proper road access, renovation feasibility, real local demand, and a realistic long-term purpose. Foreign buyers can be caught out by issues that are easy to miss from overseas — an unregistered road, a land-use restriction, an old house without proper documentation. “Cheaper than Tokyo” answers one question. It doesn’t answer the more important ones.

The Question I Actually Ask

When a new client contacts me, I don’t start with “where.” I start with “what.”

What are you actually looking for? A second home you’ll use a few weeks a year? A lifestyle change? A long-term investment you may never live in? A place to eventually retire?

The answer changes everything. A busy investor looking for liquidity has different needs than a retiree looking for quiet, or a family wanting a summer escape. Once I understand what a client is really trying to achieve, the search often expands beyond the obvious first answer — and the numbers above are usually part of that conversation.

Liquidity, for example, genuinely favors Tokyo. If a client expects to resell within a few years, a well-located Tokyo property is easier to exit than most regional alternatives. But if the goal is a place to actually live in for part of the year, or an asset held for a decade or more, the calculation changes. Price growth in Tokyo has already priced in a great deal of future demand. In a regional market with a falling average price and a high vacancy rate, a buyer isn’t paying for that same assumption — for better or worse.

Where That Search Sometimes Leads

Sometimes it leads to places with stronger lifestyle appeal than a major city can offer — space, silence, a real connection to nature.

Other times it leads to places with far less competition, where a thoughtful buyer can still find genuine value, rather than bidding against dozens of other offers in a rising market.

And sometimes it leads to places most overseas buyers have never considered at all, simply because no one has told them these places exist. Japan’s Statistics Bureau recorded nearly 9 million vacant homes nationwide in its 2023 survey, with individual prefectures such as Wakayama and Tokushima reporting vacancy rates above 20%. In my view, that isn’t a secret opportunity — it’s simply an overlooked one.

Regional Japan isn’t the right answer for every buyer. Many clients stay in Tokyo, and for them, that’s the correct decision. But for buyers open to it, asking a different question — not “where does everyone else look,” but “what do I actually want” — often leads to a very different, and sometimes better, answer.

Why This Matters More Than It Seems

I’ve spent twenty years working with people from very different backgrounds — first running an English conversation school, and now helping international buyers navigate property in Japan. One thing hasn’t changed: people make better decisions when they slow down and ask better questions, instead of following the most obvious path.

That was true of language learning. It’s also true of buying property in a country you may not know well. The data shows a market where one city keeps getting more expensive — and in my professional experience, much of the rest of the country has room most buyers never think to look for.

A Closing Thought

Tokyo will always be a reasonable place to start a Japan property search. But the best answer is not always the place everyone already knows.

In the coming weeks, I’ll share more about how I evaluate properties, what I look for beyond the obvious, and a few real examples of where that search has led — including places most overseas buyers have never heard of. My evaluation goes beyond the property itself. Ownership structure, renovation reality, local conditions, tax considerations, and the long-term role the asset is meant to play all matter too.

If you’re considering property in Japan and want to discuss your goals, your investment horizon, and the right location strategy, I’d be glad to help.