Investors are moving firmly towards the Yokohama property market as Tokyo has gone increasingly expensive over the years.
In fact, Yokohama is an overlooked city that is getting more and more appreciated, not only by locals, but also foreigners.
With an increasing population, the demand will also stay relatively high, compared to many other cities in Japan.
In this article, I explain the essentials when buying property in Yokohama.
Yokohama property market
Yokohama is the second largest city in Japan in terms of population, but most populous in terms of density.
The city has become a popular destination for foreigners, in fact, the foreign population has increased to a record number of 8%, and is still growing.
Yokohama is unique for one reason: while its population has increased the past decades, the population in Japan is shrinking.
Even in the 1950’s, Yokohama was the 4th most populous city in Japan, but temporarily climbed to a 1st position in 1985.
So: as the population increases, demand increases. Hong Kongers are some of the foreigners who now turn to Yokohama as property gets too expensive back home.
Yokohama is a family-friendly city that welcomes foreigners and often offers better value to property buyers, compared to cities like Tokyo.
It’s also popular because of its proximity to Tokyo, it won’t take you more than 30 minutes going by train between the cities.
Yokohama property prices
You might think that property is priced at similar levels to Tokyo. Then you need to think over.
See: there’s a 30% price difference (!) compared to Tokyo, which lures more investors looking for cheaper property.
Yokohama also experienced the sharpest rise in sale prices per square meter in the last few years, with an increase of almost 10% a year.
The average asking price of a 70 square meter second-hand apartment in Yokohama is, as of the moment I’m writing this article, almost USD 300,000.
If you can’t afford property in Tokyo, Yokohama is where you should look next.
Based on a high demand and an increased interest from foreigners, the city plans to build a 180 meter tall residential tower, to target foreign buyers.
It’s just one example out of a long list of upcoming residential projects, in an anticipation of a further shift of buyers moving from Tokyo to Yokohama.
The increase in the population, due to internal migration, proves that native Japanese find it a better place to live compared to other cities. The surrounding beach with ample green space makes it a great place for expats and families.
The vacancy rate in Yokohama is higher than Tokyo, mostly because of the rapid increase of new projects.
Where should I buy property in Yokohama?
Yokohama has the 5th busiest train station in the world. The residential areas around train stations are high in demand, and have higher rental costs, so prices are higher as well.
On average, you can buy a 2-bedroom apartment for USD 500,000 in the high-demand areas. A three-bedroom home for around USD 1.5 million and a 5-bedroom family home for USD 3 million.
But prices vary much in the city. Yokohama consists of 18 wards and you can notice that new constructions are built almost everywhere.
Let’s have a look at some of the most interesting places in Yokohama.
Buying in Kanagawa
The most important ward in Yokohama is Kanagawa, which is a commercial center. Most industries have offices in this area.
The ward also has many universities, top schools, shopping malls, museums, train stations, and residential complexes, making it an attractive place for investors.
Properties are high in demand and expensive, but you can also earn much on rental incomes.
Buying in Yamate
Many foreigners decide to stay in Yamate. The area also looks different compared to many other parts of Japan or Yokohama, due to it’s westernized architecture, high number of churches and different outlook than other neighborhoods.
The Chinatown is also located here, it’s famously known for being the world’s safest Chinatown. Not surprisingly, most of the Chinese live here, while prices are also slightly higher and with higher rents.
It’s a good, quiet and calm residential area for people with families and has many parks, schools, shopping malls and museums.
Buying property in Aoba and Tsuzuki
These wards are situated in the northern part of the city. Compared to the central wards, there are mostly residential buildings in these wards, prices are also cheaper.
You can also find a sizable foreign population residing in these areas along, with many newly constructed apartment buildings.
Buying in Hokoku
This ward has a mix of residential neighborhoods and commercial districts.
You’ll find many high-rise residential apartment towers in this area, making it one of the most densely populated areas in the city.
Due to its proximity to downtown Yokohama, train stations and neighboring commercial neighborhoods, the property prices and rentals are higher.
Hokoku is famous for its vibrant nightlife and much entertainment.
Buying in Naka
Naka is the most centrally located ward and the main business district in Yokohama. It’s also one of the most expensive areas.
But the price growth is high and you’ll also earn decent money on high rental incomes, if you afford to buy property here.
The area is also known for tourism, its upscale restaurants, shopping districts and amusement parks.
You can find both high-end residential neighborhoods with large homes and newly-built modern apartment buildings.
Buying in Nishi
Nishi provides good investment opportunities. It’s newly built and the smallest ward, but has a significant number of skyscrapers, including the second tallest building in Japan.
You can still find a lot of off-plan properties in Nishi, giving you the opportunity to buy property at a comparatively lower price.
The Minato-Mirai neighborhood is a fairly new area of the city with a modern outlook. The entire area developed from scratch in the last three decades, so the infrastructure is very modern.
The area around the Yokohama station is expensive, which also serves as the entertainment and commercial district of Nishi ward.
In addition, a smart town known as Tsunashima Sustainable Smart Town (SST) is currently being built in the Tsunashima district.
This sustainable environment friendly area is constructed at the Panasonic factory site, which will have both residential and non-residential facilities.
Real estate agents
Yokohama grows faster than any other city in Japan, with new neighborhoods and areas that attract investors.
This has helped to build up a decent real estate industry.
Before you buy property in Yokohama, hiring a real estate agent should be on your to-do list, as they understand the local market.
Below I’ve listed some of the biggest real estate agents, for your convenience:
c. Yokohama-hc.com (Yokohama Home Collection)
d. Solid Real Estate Japan
e. Kyowa Kensetsu
Contact a handful of agents and prepare questions beforehand, to make sure they are credible.
Yokohama is getting increasingly popular among Japanese locals and foreigners, who try to escape the more expensive market in Tokyo.
With a 30 minute ride by train to Tokyo, but property prices that are 30% cheaper, not only Hong Kongers, but many other foreigners have started to open up their eyes to this city.
If you want to read more about general regulations to invest in Japan properties, I recommend you to read my guide that explains how foreigners can buy property in Japan.