Japanese investors pivot to Australian real estate despite strong domestic market

Japan's real estate market remains robust across commercial, residential, and hospitality sectors, yet investors are increasingly turning their attention to international opportunities, particularly in Australia. In the first quarter of 2025, the vacancy rate for grade A offices in Tokyo stood at 0.7%, accompanied by a 13.2% annual increase in rental prices. Last year, new apartment prices in Tokyo surged by 58.5%, marking the highest growth among 100 luxury markets worldwide, while prime residential prices soared nearly 160% over five years, trailing only behind Dubai. Despite a 55% decline in visitors from mainland China, the hotel industry continues to prosper, buoyed by tourists from South Korea and Taiwan. Last year, Japan represented 28% of commercial real estate investments in the Asia-Pacific, with notable outbound investments in Australian properties due to domestic issues.