As we head into the year-end holiday period, Japan will be one of the top holiday destinations for many Singaporeans. The country is a global tourist hotspot, with international visitors eager to see its sights, culture, food and shopping.
Big spenders, including property investors, have also flocked into Japan's property market, chasing strong yields and relatively low borrowing costs. Residential land prices in the country are on track to rise for a fifth consecutive year, in tandem with a series of interest rate hikes by the Bank of Japan.
But borrowing costs in Japan are still very low compared to other mature economies in the Asia-Pacific region and globally, while resilient rental demand is keeping rates - and yields - attractive to retail and institutional investors.
Declining affordability has resulted in many aspiring Japanese homeowners sticking to the rental market. As a result, residential investment activity is expected to remain robust in 2026, with market forecasts pointing to another year of high transaction volumes.
Within the residential sector, investment in rental housing reached a record JPY 904.3 billion (approximately S$7.34 billion) in 2025, according to data from CBRE Japan.
The relatively weak yen compared to major currencies has also encouraged property investors to search for new opportunities, and with Tokyo posting the highest price growth among the country’s 47 prefectures, investors are naturally looking beyond the capital city.
Major regional cities like Osaka have also seen an influx of local rental demand, as Japanese start to feel priced out of some neighbourhoods in Tokyo. The rental demand is compounded by Osaka's dwindling new condo supply, which has hit its lowest level in over a decade.
Osaka’s enduring appeal
As Japan’s third-largest city in terms of population and the Kansai region’s primary economic powerhouse, Osaka’s appeal has increased on the back of new landmark projects.
One of them is Japan’s first integrated resort, MGM Osaka, which is expected to open in 2030.
Minamisemba, which sits northwest of Shinsaibashi's busy commercial hub, has seen some of Osaka’s highest property prices.
It is also where a former Tokyu Hands commercial building was reportedly bought for redevelopment into a luxury residential property.
The appetite for Japanese real estate remains resilient among Singaporean investors, supported by the weak yen, rising rents in Japan's major urban centres, and high rental yields.
Osaka, in particular, remains on investors’ radar for a number of reasons. A surge in international visitor arrivals has resulted in a steady increase in short-stay accommodation demand, followed by relatively lower entry prices for centrally located apartments.
Collectively, this is driving up rental yields, with some areas and properties recording as high as 5%. For Singaporean investors, where the typical rental yield is about 2 to 3%, that seems to be a better utilisation of their capital.
It also helps that Japan imposes no long-term residency status, special approvals, or additional buyer stamp duties on foreign property buyers. Foreign buyers also get the same legal ownership rights as locals.
Some policy tightening has occurred, but is unlikely to have a material impact on investment demand: namely that non-resident property buyers must report their purchases within 20 days and provide mandatory nationality disclosure upon registration.
Amous Lee, CEO and founder of FMI Japan, notes that the persistently high rental demand has attracted institutional investors - including multinational corporations (MNCs) and family funds - into Osaka, with many concentrating on prime properties in Shinsaibashi.
He cites Singapore-based property group City Developments Ltd (CDL) and its purchase of a 256-room hotel property in August 2023. The freehold development, named Bespoke Hotel Osaka Shinsaibashi, was acquired by CDL for JPY 8.5 billion (approximately S$78.5 million).
CDL subsequently sold the hotel property for JPY 14 billion (approximately S$117 million) to international investment manager Blackstone in 2025.
Blackstone is one of many international funds that are stepping up their portfolios of income-yielding Japanese properties. The asset manager has been building up its $1.3 billion hotel portfolio in Japan, including the purchase of Nest Hotel Osaka in 2024. That hotel property is a 5-minute walk to Osaka’s main retail and entertainment district.
Likewise, institutional investors such as Orix JREIT have paid record prices to establish a foothold in the area. The REIT paid JPY 5.3 billion (approximately S$43 million) for the acquisition of the 48-key Mimaru Osaka Shinsaibashi East in 2025.
Making early-stage inroads into Osaka
The residential market in Osaka continues to strengthen this year, led by prime central neighbourhoods. According to Japan’s 2026 official land price survey, residential land in Chuo Ward rose about 9.6%, the second highest among Osaka City’s 24 wards.
Lee foresees that when Osaka’s casino resort opens in 2030, residential properties in these central districts will see another surge in acquisition and rental demand.
For example, Dotonbori, which has been coined "the heart of Osaka", is famous for its food shops, entertainment and nightlife. In contrast to the bustling commercial district, the surrounding residential neighbourhood is relatively quiet and peaceful, making it suitable for B&B rental.
Lee adds that the price of commercial land in Osaka, which is what most B&Bs occupy, has increased by around 15% over the past 12 months. At one benchmark site in Dotonbori, land prices climbed 25% in a single year, he says.
Adding to FMI Japan's growing portfolio in central Osaka is The Peak Shinsaibashi Sho JY, which offers compact residences with efficient layouts that include a living and sleeping area, kitchenette and storage spaces.
The 13-storey building comprises 24 residential units and a shop. Each residential unit is 279 sq ft with two balcony options of 41 sq ft and 74 sq ft.
Located in Shimanouchi within the Shinsaibashi area, the development is about an eight-minute walk to the main road and about three minutes to Nagahoribashi, which is five minutes away from Shinsaibashi Station.
The area is populated with several commercial offices, which provide a catchment of consistent monthly rental demand. A common preference among business travellers visiting Japan is to stay close to the city centre and a train station, but in a quiet spot.
Apart from its appeal to overseas investors, Lee also observes that locals frequent the area too. The Peak Shinsaibashi Sho JY will be sold as an en bloc property at S$12.1 million.
The second property that FMI Japan is currently marketing is The Peak Osaka Castle, set in Andojimachi, an upmarket residential neighbourhood in Chuo ward juxtaposed with old town character.
The 25-unit freehold boutique development is ideal for professionals or expatriates looking for convenient access to Osaka's business and lifestyle districts. The property is scheduled for completion in April 2028.
“For many overseas visitors, the castle is an unmissable landmark. Here, you are close to both the castle and Shinsaibashi, with plenty of cafés nearby. I see a lot of potential here, and at prices that are still more accessible than Shinsaibashi,” says Lee.
The starting price is S$396,000 for a unit, which ranges from 269 to 272 sq ft and comes with a balcony between 37 and 48 sq ft. The location enjoys excellent transportation connectivity as well, with the Tanimachi 6-chome subway station around two minutes on foot, and the Osaka Castle Park area a 13-minute walk away.
To promote its lineup of properties for sale in Osaka, FMI is organising a travel expo and property exhibition from Nov 7 to 8, from 11 am to 6 pm at the Moor & Morrison Room at Raffles City Convention Centre.
Held in partnership with Chief of Homes and OKINI Home, it will showcase new launch projects in Osaka, as well as daily seminars on tax advisory and investing in Japan.
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