While Tokyo remains a prime target for many regional investors, attention has gradually spread to other cities in Japan – especially to Osaka, the country’s second biggest property market. Encompassing seven prefectures, the Greater Osaka (or “Kinki”) region is home to over 20 million people, making it the eighth largest urban agglomeration in the world. The central urban area of Osaka City is an economic powerhouse and a top destination for Japan’s largest corporations, universities, and cultural institutions in the west.  

Unemployment is healthy at 3.9% of the working population, and average income is 15% above that of Japan at large. Income growth per taxpayer is at 2.7% YoY (yearon-year), also  signifi cantly above the national average.

The Savills Report shows that Population growth remains focused on the central area, New household formation buoying condominium demand, there is a recovery in residential land prices and residential prices per sq m still increasing as unit size falls.

Outlook

The report states that the modern condominium market in Osaka remains healthy, supported by steady price increases, stable supply, and increased demand for smaller living space. Low unemployment and gradual population growth also contribute to stability. Extremely low interest rates are a strong tailwind, although real wage increases remain elusive. Early signs of moderation in the pricey Tokyo market may affect Osaka later, but popular locations in and around Osaka City can expect sustained price growth for the foreseeable future due to more reasonable current pricing levels relative to Tokyo and moderate supply. 

For more information click here to download the full report.