Japan’s 2025 Housing Market Shake-Up: Why Gunma and Saitama Are Rising Stars for International Buyers

Estimated Reading Time: 7 minutes

• Gunma and Saitama present accessible investment options compared to Tokyo.
• Understanding regional dynamics is crucial for seizing opportunities.
• Legal and financial pathways for foreign buyers have improved.
• The housing market shows volatility but also potential for growth.

Table of Contents

• Introduction: The 2025 Housing Market Transformation in Japan
• 1. Japan’s Housing Market: A Tale of Decline and Resilience
• 2. Data-Driven Market Analysis: Why Saitama and Gunma Stand Out
• 3. Gunma vs. Saitama: Regional Opportunity Breakdown
• 4. Financing, Legal, and Tax Tips for Foreign Buyers
• 5. Lifestyle & Living: What to Expect in Gunma and Saitama
• 6. Risks and Future Outlook
• Key Takeaways
• Ready to Explore Your Options?

Introduction: The 2025 Housing Market Transformation in Japan

Japan’s real estate market in 2025 is navigating a pivotal moment. After the temporary construction boom in early spring, April 2025 saw housing starts fall by a staggering 26.6% year-on-year, emphasizing not just cyclical weaknesses but also deeper, structural shifts in Japanese housing demand. Major cities like Tokyo continue their price surge, driven by urbanization and international interest, while regional and commuter areas are emerging as the new frontiers for foreign buyers wanting to escape overheated city prices without sacrificing lifestyle or investment growth potential.

Gunma and Saitama—located north of Tokyo and connected by extensive rail and highway networks—are now in the spotlight as accessible, high-potential markets for international investors, remote workers, and families seeking a balanced Japanese lifestyle. If you’re considering buying property in Japan, understanding this divergence and the unique landscape in these prefectures is crucial.

1. Japan’s Housing Market: A Tale of Decline and Resilience

2025 has delivered a reality check for Japan’s construction sector:

• Housing starts in April 2025 plummeted 26.6% year-on-year—the worst fall in months, following an unsustainable spike in March driven by pent-up demand and seasonal effects. [source] [source]
• The volatility—March’s 39.1% monthly jump quickly reversed—signals deep uncertainty and the end of a long post-pandemic recovery cycle.
• Despite the drop, construction orders for top developers surged 52.7% year-on-year, suggesting strong demand held back by supply chain and regulatory delays.
• The longer-term demographic headwinds persist: Japan’s shrinking and aging population means rural areas risk ongoing decline, but select regional hubs—particularly those within commuting distance of Tokyo—are attracting renewed interest due to affordability and improved amenities.

For international buyers, this turbulence brings both risk (markets outside the main urban corridors may struggle) and opportunity (well-connected, affordable areas offer value and upside).

2. Data-Driven Market Analysis: Why Saitama and Gunma Stand Out

• Tokyo’s Prices Still Climbing: The capital saw a 10.7% year-on-year price increase in 2025. Forecasts predict 5–6% growth in urban cores and 2–3% nationally for 2025–2026, with major cities expected to stay strong as “safe havens” for investment.
• Gunma and Saitama’s Steady Appeal: While not matching Tokyo’s breakneck growth, these prefectures have shown remarkable stability—housing prices have remained more accessible, and rental yields can exceed those in Tokyo due to lower acquisition costs.
• Rental Yields: According to comparative data, Saitama and Gunma offer rental yields competitive with or superior to other Asian and Western cities, particularly for family houses and new-build condos.
• Lifestyle and Infrastructure Upgrades: Both prefectures benefit from new transport projects, urban renewal, and investments in international schools, healthcare, and recreation—making them increasingly attractive to expats and dual-income households.
• Buyer Profiles: Demand is shifting toward remote workers, young families, and international investors drawn by better living space, nature, and ongoing upgrades to local amenities.

3. Gunma vs. Saitama: Regional Opportunity Breakdown

For both, location relative to key train stations (e.g., Shinkansen for Gunma, JR Saikyo and Tobu lines for Saitama) is critical for investment and resale value.

4. Financing, Legal, and Tax Tips for Foreign Buyers

• Mortgages for Non-Residents: More Japanese banks and international lenders are tailoring products for non-residents; however, down payments of 20–35% are common, and income proof or local representation may be required.
• Legal Pathways: There are no legal restrictions on foreigners buying land or homes in Japan, but due diligence is essential—especially regarding zoning, earthquake codes, and local tax obligations.
• Income Tax and Property Tax: Annual property taxes remain moderate by international standards. Rental income is taxable, but depreciation rules for investment property can offer relief.
• Short-Term Rental Laws: Key for investors: cities and towns may cap or restrict Airbnb-style rentals, so check local regulations carefully before buying for this purpose.
• Visa Considerations: Real estate ownership does not guarantee residency, but legitimate property holdings may strengthen long-term visa applications.

5. Lifestyle & Living: What to Expect in Gunma and Saitama

• Space and Pace: Expect larger homes and quieter streets versus Tokyo. Gunma, in particular, offers spacious detached houses and easy access to outdoor sports, onsen, and mountain air, suiting those seeking health and family-friendly environments.
• International Community: Saitama’s proximity to Tokyo and established transport means larger foreigner communities and English-language services; Gunma’s international population is growing, especially around Takasaki and Maebashi.
• Cost of Living: Both regions offer significantly lower costs for housing, food, and schooling, with Saitama having more urban options, while Gunma offers a countryside pace and scenic views.
• Connectivity: Fast trains make commuting to Tokyo plausible from both, but Saitama’s southern districts are especially popular for daily commuters, while Gunma offers an attractive “hybrid” remote work lifestyle.

6. Risks and Future Outlook

• Structural Headwinds: Ongoing population decline is a major risk—localized demand may not keep up everywhere, especially in rural or shrinking towns.
• Short-Term Volatility: The collapse in housing starts may mean less new supply and greater competition for quality properties in the most desirable locations, supporting prices and yields in near-urban hubs.
• Outlook: Market analysts anticipate a “soft landing” over the next five years, with selective growth in regional hubs and continued international buyer interest in accessible, lifestyle-rich prefectures like Gunma and Saitama.

Key Takeaways

• Gunma and Saitama offer accessibility and affordability compared to Tokyo, making them attractive for foreign buyers.
• Understanding regional dynamics and infrastructure developments is key to seizing investment opportunities.
• Legal and financial pathways for foreign buyers have improved, yet diligence is necessary.

Ready to Explore Your Options?

Navigating Japan’s complex and shifting property market requires local insight and global perspective. Whether you’re searching for a dream home, an investment property, or a new lifestyle base, Gunma and Saitama offer compelling, accessible opportunities for foreign buyers ready to act in 2025. Contact New Connection today for multilingual, personalized guidance and turnkey support—so you can buy, invest, and thrive in Japan with confidence.

FAQ Section

1. Can foreigners buy property in Japan?
Yes, there are no legal restrictions on foreigners buying land or homes in Japan.

2. What is the typical down payment for a mortgage as a foreign buyer?
Down payments of 20–35% are common for mortgages targeted at non-residents.

3. Are there incentives for foreign buyers?
Yes, local incentives exist in some prefectures to encourage foreign investment.

4. Is the cost of living lower in Gunma and Saitama?
Both regions offer significantly lower costs for housing, food, and schooling compared to Tokyo.

5. What are the risks associated with buying property in Japan?
Key risks include localized demand not keeping up due to ongoing population decline and short-term volatility in the housing market.