Japan’s 2025 Housing Shift: Why Gunma and Saitama Are Emerging Hotspots for International Buyers and Investors

Estimated reading time: 7 minutes

• Gunma and Saitama present unique buying opportunities due to changing demographics and housing supply constraints.
• Foreigners can purchase property easily and secure favorable financing options with local support.
• Both regions offer potential for capital appreciation and stable rental income as migration patterns evolve.
• Engage local experts to navigate financing, legal issues, and property assessments successfully.

Table of Contents

• Introduction: Japan’s Aging Wave and the Regional Real Estate Opportunity
• 1. Background: The “2025 Problem” and Japan’s Next Real Estate Frontier
• 2. Gunma vs. Saitama: What Every International Buyer Should Know
• 3. Data-Driven Trends: Prices, Supply, and Market Outlook for 2025
• 4. Legal and Financing Considerations: What International Buyers Need to Know
• 5. Living and Investing in Gunma and Saitama: Real Experiences
• 6. Risks and the Future Outlook
• Key Takeaways
• Ready to Explore Your Japanese Real Estate Future?

Introduction: Japan’s Aging Wave and the Regional Real Estate Opportunity

Japan’s real estate headlines in 2025 are dominated by a demographic milestone known as the “2025 Problem.” This year, the entire baby boomer generation turns 75 or older, accelerating Japan’s already fast-aging population. At the same time, construction of new homes nationwide has plummeted: housing starts in April 2025 fell 26.6% year-on-year, the steepest decline since the 2009 global financial crisis. What does all this mean for foreign buyers and investors—especially those considering Gunma or Saitama prefectures, popular for their balance of urban convenience and livable environments near Tokyo?

In this post, we unpack how shifting demographics, supply constraints, and global investment factors are converging to make Gunma and Saitama more attractive than ever for international buyers looking to secure their future in Japan.

1. Background: The “2025 Problem” and Japan’s Next Real Estate Frontier

Japan’s population crisis isn’t breaking news, but 2025 is a watershed moment: for the first time, over 18% of the population will be over 75. This “super-aged society” is triggering profound changes in housing demand, property supply, and urban migration patterns.

• Why does this matter for buyers?
• Increasing Vacancies: Many baby boomers are moving into care or passing away, resulting in a record-high number of vacant properties, particularly in regional and suburban areas.
• Dual Price Trends: Prices for secondhand homes are softening due to oversupply and lower demand from younger Japanese. In contrast, new builds remain expensive due to limited construction capacity and materials inflation.
• Rental Demand Shift: As urban Japan faces a shortage of new housing, demand for rentals is rising, with growing investor interest in solving the “vacancy problem” outside core Tokyo.

For non-Japanese buyers, this means:

• Easier access to properties in regions like Gunma and Saitama, where oversupply and aging owners create buying opportunities.
• Growing appeal among investors seeking stable rental yields and capital appreciation as infrastructure and migration patterns evolve.

2. Gunma vs. Saitama: What Every International Buyer Should Know

Gunma is ideal for buyers seeking space, privacy, and proximity to nature at a much lower price point. Its market is attracting early investors willing to bet on future tourism, retirement influxes, and creative solutions to vacancy.

Saitama, often dubbed “Tokyo’s bedroom,” is more urbanized, offers faster commutes, and is already popular with international families. Its real estate is less volatile, with solid rental demand and growing development, but bargains are rare compared to Gunma.

3. Data-Driven Trends: Prices, Supply, and Market Outlook for 2025

• Housing Starts Down Sharply: Japan saw a 26.6% year-on-year drop in new housing starts in April 2025, accelerating shortages in the new-build market and placing a premium on well-located resale properties.
• Modest Price Growth Projected: While Tokyo property prices are set to rise by 5–6% in 2025, price appreciation in regional prefectures like Gunma and Saitama is expected to be stable—but may outpace laggards as buyers seek alternatives to expensive city cores.
• No Crash in Sight: Despite fears of a bubble, Japan’s real estate market is considered stable, driven by steady rental demand, continued investor interest, and the government’s monitoring of lending practices.
• Growing International Demand: Non-Japanese buyers are drawn by unrestricted property rights, transparency, and the affordability advantage of Japanese real estate.
• Yen Weakness a Boon: The continued depreciation of the yen makes Japanese property even more attractive to dollar- and euro-based buyers, offsetting domestic price rises.

4. Legal and Financing Considerations: What International Buyers Need to Know

• Ownership: Foreigners face almost no restrictions when buying property in Japan — you do not need residency to purchase land or homes.
• Mortgages:
  • Non-residents can apply for mortgages in Japan, but approval often requires strong financial documentation and, ideally, some local ties.
  • Major Japanese banks have begun offering products for non-residents, sometimes requiring higher down payments or a Japanese guarantor.
  • Current mortgage rates remain low by global standards, but may begin to rise as the Bank of Japan signals a gradual shift away from its ultra-low interest policies.
• Fees & Taxes:
  • Buyers should budget for purchase taxes, registration costs, agent fees, and annual property taxes; these can total 5–8% of the purchase price.
  • Capital gains taxes and inheritance tax also apply, and rules may be complex for non-residents. Pre-purchase consultation is essential.
• Earthquake & Safety Standards:
  • The vast majority of homes in Saitama and Gunma are built to strict earthquake-resistant codes, especially post-1981.
  • Consider insurance and resale value when assessing older properties, particularly in rural Gunma.
• Transaction Process:
  • You do not need to be physically present in Japan to complete a property purchase if you authorize an agent via power of attorney, though an in-person signature may be preferred for some contracts.
  • English-speaking agent support is crucial for understanding documentation and negotiating effectively.

5. Living and Investing in Gunma and Saitama: Real Experiences

Quality of Life: Both prefectures offer a high standard of living compared to their price points:

• Gunma: Famous for hot springs (onsen), outdoor recreation, and slow-paced life — attractive for retirees, digital nomads, or anyone seeking escape from metropolitan stress.
• Saitama: Modern amenities, international schools, extensive train network, and proximity to Tokyo make it a favorite for working families and globally mobile professionals.

Community:

• While Saitama has more established international enclaves, Gunma’s smaller expat community is growing as creative entrepreneurs and investors seek unique homes, inns, and hospitality ventures.
• Both regions are seeing efforts by local governments to revitalize empty homes (“akiya”) through subsidies and tax breaks, presenting value opportunities for motivated foreign investors.

Resale and Rental Potential:

• Saitama properties see quicker resale and higher rental yields due to Tokyo spillover.
• Gunma offers potentially higher long-term gains for those willing to renovate and market properties to international tourists or remote workers.

6. Risks and the Future Outlook

• Aging Population = Uncertain Demand: Japan’s headcount is shrinking, especially outside big cities. Investing without local insight raises the risk of slow resale or declining demand in the most rural areas.
• Vacancy Risks: “Akiya” properties may require significant renovation and sometimes face legal or inheritance issues. Always conduct due diligence with local experts.
• Currency Fluctuations: While the weak yen is favorable now, sudden shifts in exchange rates could impact foreign owners’ returns.
• Policy and Tax Changes: Japan is monitoring real estate lending and may adjust regulations affecting foreign buyers, speculation, or short-term rentals—regular market check-ins are wise.

However:

• The government is encouraging regional revitalization, and infrastructure investments (train lines, tourism promotion, digital services) continue to make Saitama and Gunma more appealing for international living and long-term investment.
• The window of ultra-affordable, high-quality property near Tokyo may not last as global interest grows and supply tightens in select neighborhoods.

Key Takeaways

• Market Opportunity: Gunma and Saitama present unique buying opportunities due to supply constraints and changing demographics.
• Legal Access: Foreigners can purchase property easily and secure favorable financing options with local support.
• Long-term Investment: Both regions offer potential for capital appreciation and stable rental income as migration patterns evolve.
• Do Your Due Diligence: Engage local experts to navigate financing, legal issues, and property assessments successfully.

Ready to Explore Your Japanese Real Estate Future?

Buying property in Japan—especially in unique, high-potential prefectures like Gunma and Saitama—offers lifestyle rewards and investment upside, but it pays to navigate the market with expert bilingual support.

Contact New Connection today for a no-obligation consultation in English, Japanese, or Chinese, and let us help you:

• Compare the best opportunities in Gunma and Saitama
• Understand financing and transaction pathways for non-residents
• Assess lifestyle and investment strategies tailored to your needs
• Connect with local professionals for property tours, legal checks, and renovation planning

Take the first step toward your Japanese home or next big investment. The changing market in 2025 is full of promise—let us help you seize it.