Why Gunma & Saitama Are Emerging Hotspots for Foreign Buyers Amid Japan’s 2025 Demographic Shift

Estimated reading time: 7 minutes

• Gunma and Saitama are becoming desirable locations for affordable real estate investment.
• The “2025 Problem” presents both challenges and opportunities for foreign buyers.
• Understanding market trends helps in making informed property investment decisions.
• Legal and financing aspects are crucial for non-residents looking to purchase property in Japan.
• Both prefectures offer unique lifestyles catering to various preferences of expatriates.

Table of Contents

• Introduction: Japan’s 2025 Demographic Shift and the Rise of “Value” Prefectures
• 1. Background: What Is the “2025 Problem” and Why Does It Matter for Real Estate?
• 2. Market Data: Price Trends, Returns, and Urban-Rural Divergence
• 3. Gunma vs. Saitama: Comparative Advantages for Foreign Buyers
• 4. Financing & Legal Guidance: What Foreigners Need to Know
• 5. Lifestyle, Community, and Practical Experience for Foreign Residents
• 6. Risks and Future Outlook
• Key Takeaways
• Ready to Explore Your Future in Japan?

Introduction: Japan’s 2025 Demographic Shift and the Rise of “Value” Prefectures

Japan’s real estate market is at a watershed moment. The so-called “2025 Problem”—the milestone when the entire baby boomer generation turns 75 or older—is transforming the landscape of residential property across the country. While Tokyo and major cities still command headlines with double-digit annual price gains, a quieter revolution is underway in regional hubs like Gunma and Saitama. These adjacent prefectures, right on Tokyo’s doorstep, are rising in profile among savvy foreign buyers and investors seeking affordability, stable returns, and a balanced lifestyle. With property values still accessible, good rental demand, and rapid transport links to the capital, Gunma and Saitama are increasingly on the radar for non-Japanese buyers considering “where next” in the archipelago.

Let’s dive into what’s driving this shift, the latest market data, and how the 2025 demographic crunch could work in your favor as an international participant.

1. Background: What Is the “2025 Problem” and Why Does It Matter for Real Estate?

The “2025 Problem” refers to a critical demographic tipping point: by 2025, over 18% of Japan’s population will be aged 75 or older, as the postwar baby boom generation enters advanced age. This accelerates long-term trends of:

• Population aging (higher ratio of retirees to working adults)
• Falling birthrate
• Depopulation of rural and suburban areas
• Increased housing vacancies

For real estate, this means a rapidly expanding inventory of vacant homes (known as akiya), especially in areas outside Tokyo, but also shifting demand patterns—even within commuter belts like Gunma and Saitama. The government and private sector are working to address these challenges with vacancy reduction schemes and incentives for both locals and foreigners.

What does this mean for you?
Foreign buyers will find more choices, less crowding, and greater negotiating power in many local markets. However, understanding which areas are resilient versus those at risk of long-term decline is crucial for making wise investment or relocation decisions.

2. Market Data: Price Trends, Returns, and Urban-Rural Divergence

Property prices in Tokyo surged by 10.7% year-on-year to early 2025, with forecasts calling for continued, though slower, growth. The national average will likely rise by 2-3%, but this masks a sharp divergence:

Gunma and Saitama are classified as affordable “value” prefectures. They did not see the speculative spikes of central Tokyo, but:

• Entry prices for detached homes, townhouses, and condos are far lower than in the capital.
• Rental yields are attractive, especially for investors focused on long-term leases to families or workers commuting to Tokyo.
• Vacancy risk is present—but strategic location (near stations, schools, industry hubs) can mitigate this.

Key point:
While ultra-rural parts of Japan may face shrinking demand, well-positioned suburbs and satellite cities in Gunma and Saitama continue to see moderate growth and stable rental demand, with government support for redevelopment and population attraction efforts.

3. Gunma vs. Saitama: Comparative Advantages for Foreign Buyers

Both prefectures offer compelling, but distinct, profiles for international buyers:

Gunma is renowned for its hot springs (onsen), outdoor recreation, and affordable land—a favorite for buyers wanting space, privacy, and a peaceful pace of life, yet within reach of Tokyo’s opportunities.

Saitama offers rapid access to central Tokyo and a more urban-suburban lifestyle with plentiful amenities, shopping, and international schools. It’s popular among expat families and professionals seeking a blend of cosmopolitan living and everyday convenience. Both areas are actively promoting foreign investment, with realtors providing English and multilingual support.

4. Financing & Legal Guidance: What Foreigners Need to Know

Japan maintains no legal restrictions on property ownership by foreigners—you can own land, condos, or homes in your name, regardless of residency status.

Financing Highlights:

• Japanese banks increasingly offer mortgages to non-residents—especially if you have a long-term visa, stable income, or can demonstrate ties to Japan.
• Down payments typically range from 10–30%.
• Interest rates remain low by global standards, but are inching up in 2025 as the Bank of Japan tightens its policies.
• Loan documentation and tax guidance are available in English via specialist agencies.

Legal Checklist:

• Title search and due diligence are critical—vacant houses or rural plots may have unclear boundaries or ownership histories.
• Foreign buyers should budget for taxes: property acquisition tax, annual fixed asset tax, and sometimes stamp duty.
• Inheritance and exit strategies are vital, as holding periods can affect capital gains tax and resale prospects for international owners.

Pro Tip:
Partner with a trilingual consultant to navigate contracts, local regulations, and negotiations—especially in less globalized parts of Gunma or Saitama.

5. Lifestyle, Community, and Practical Experience for Foreign Residents

Silicon Valley-style suburban living? Mountain retreats? Family-friendly commuter towns? Gunma and Saitama offer a broad menu for international buyers seeking more than just an “investment property.”

Gunma attracts those seeking a slower pace, affordable family homes, and accessible nature—plus uncrowded hot springs and hiking. Communities are welcoming, but local language support is often limited to larger towns, so partnering with a bilingual agency is wise.

Saitama is a bridge between big-city bustle and suburban comfort, with strong expatriate networks, international schools, and easy Tokyo commutes. Popular with families and professionals, it provides “the best of both worlds”: lower prices than Tokyo, but similar lifestyle perks.

Both prefectures are investing in livability upgrades, smart city initiatives, and population attraction schemes—so foreigners moving in will find improving infrastructure and community engagement.

6. Risks and Future Outlook

Risks:

• Depopulation pressure—in outlying towns, demand may soften in the long run.
• Vacancy management—some properties may require renovation or creative leasing to maximize returns.
• Currency swings and tax regulations—Japan’s stable yen is an advantage, but foreign owners should watch for regulatory changes.

Outlook:

• “2025 Problem” is driving innovation in vacant house reuse, mixed-use developments, and incentives for both domestic and international buyers.
• Government and private initiatives are fostering a more open, internationally minded market, especially in Tokyo’s commuter belts.
• For the next 5–10 years, Gunma and Saitama are likely to see selective, stable growth—especially where transport and amenities are strong.

Key Takeaways

• Armed with the right knowledge, foreign buyers can leverage Japan’s shifting demographic landscape to their advantage.
• Gunma and Saitama present affordable opportunities with solid rental yields, making them attractive for investors.
• Navigating Japan’s real estate market effectively requires attention to legal and financing nuances alongside cultural understanding.

Ready to Explore Your Future in Japan?

If you’re considering buying property in Japan, investing in Gunma or Saitama, or simply curious about “Japan lifestyle for expats,” don’t navigate these new opportunities alone. Contacto Nueva conexión for expert, multilingual support—from property search and legal checks to securing a mortgage for non-residents in Japan. Our local specialists will help you move forward with confidence, clarity, and a fully tailored plan.

Your connection to Japan starts here.