Starting Apartment Investment in Saitama: Latest Trends in the Real Estate Market and Recommended Areas
As global interest in Japanese real estate continues to grow, Saitama Prefecture has gained attention as a popular residential area for those commuting to Tokyo. This article explains the appeal and considerations of investing in real estate in Saitama, based on data, and introduces areas within Saitama that are ideal for investment.
Even if you live abroad and find it difficult to get information about Japan, this article will help you understand the benefits of purchasing investment properties such as apartments in Saitama. We also introduce recommended areas in Saitama where you can expect good returns on your investment, so be sure to read on.
Understanding Saitama Prefecture: Tokyo’s Commuter Town
First, let's take a look at an overview of Saitama Prefecture. Saitama is the fifth most populous prefecture in Japan, with a high demand for rental properties, making it an excellent area for real estate investment. The access to Tokyo is very convenient, especially from major areas like Omiya and Urawa, where you can reach Tokyo Station or Shinjuku Station in a short time, making it a very convenient location for commuters.
In addition, Saitama is culturally rich and known as the cultural hub of "bonsai." Saitama City is home to the Omiya Bonsai Art Museum, the world’s first public bonsai museum, which is highly regarded internationally. The prefecture also boasts many historical sites, such as Musashi Ichinomiya Hikawa Shrine, making it a region attractive to tourists as well.
1. Overview of Saitama Prefecture
Saitama Prefecture is located almost in the center of the Kanto region of Japan, surrounded by one metropolis and six prefectures, with no coastline. It is adjacent to Tokyo in the north, making it a popular commuter town.
Although the prefecture ranks 39th in area out of the 47 prefectures, it has the fifth-largest population. The capital city is Saitama, which houses the Saitama Super Arena sports facility and Musashi Ichinomiya Hikawa Shrine, said to have over 2,000 years of history.
Moreover, Saitama City is the heart of Japan’s bonsai culture, and the Omiya Bonsai Art Museum, which opened in 2010 as the world’s first public bonsai museum, is located here. Internationally, "bonsai" is recognized as an art form, and the museum has gained significant attention.
2. Population Scale and Land Price Trends in Saitama Prefecture
Saitama Prefecture has a population of approximately 7.36 million, remaining stable over the past five years. However, population growth continues in areas such as Saitama City and Kawaguchi City, which is expected to increase demand for rental properties. Land prices for residential areas in Saitama have steadily risen over the past five years, reaching an average of 135,490 yen/m² in 2023. This stability and upward trend in land prices are attractive points for real estate investors.
Top 4 Recommended Areas for Apartment Investment in Saitama
Here are four areas in Saitama Prefecture that are highly recommended for real estate investment. In addition to factors like population size and geographic characteristics, we will also discuss how easily these areas connect to different parts of Tokyo, so please use this as a reference.
1. Omiya
Omiya is located in the center of Saitama Prefecture and is a transportation hub served by 13 lines, including the JR Saikyo Line and the Tohoku Shinkansen. It is a popular area for businesspeople and commuters due to its 30-minute access to Shinjuku and Tokyo. Additionally, Omiya is a stop for the Tohoku and Joetsu Shinkansen, making it convenient for businesspeople who frequently travel to other regions.
The large-scale redevelopment project around Omiya Station, known as the "Omiya Station Grand Central Station Project," is also underway, and further improvements in convenience are expected in the future.
2. Urawa
Urawa is located south of Saitama City and is closer to Tokyo than Omiya. Urawa Station is served by the JR Tohoku Line and the JR Shonan-Shinjuku Line, providing convenient 20-minute commutes to Tokyo Station and Ikebukuro Station.
Urawa Station is surrounded by large commercial facilities such as Isetan Urawa and Atre Urawa, making it a convenient area for shopping. The "Urawa Station West Exit South Takasago District Urban Redevelopment Project," led by Saitama City, is scheduled for completion in 2026. A 27-story building with 525 residential units is currently under construction as part of this project.
In addition, Urawa Ward in Saitama City experienced a population growth rate of approximately 6.7% from 2015 to 2020, indicating a likely increase in demand for rental properties.
3. Kawaguchi
Kawaguchi City has a population of approximately 600,000, making it the second most populous city in Saitama Prefecture after the capital city, Saitama. Located in the southeastern part of Saitama Prefecture, Kawaguchi is adjacent to Tokyo across the Arakawa River, offering excellent access to the city.
From Kawaguchi Station, you can access Ueno Station and Tokyo Station in under 30 minutes without changing trains using the Keihin-Tohoku Line. Additionally, Kawaguchi Motogō Station, about a 15-minute walk from Kawaguchi Station, offers direct access to Tameike-Sanno Station and Roppongi-Itchome Station in about 30 minutes via the Saitama Rapid Railway Line.
The area around Kawaguchi Station has seen a wave of new high-rise apartments, including "Proud Tower Kawaguchi" in 2020 and "Proud Tower Kawaguchi Cross" in 2023. Meanwhile, the Arakawa River’s riverside offers numerous golf courses and parks, providing a balanced mix of urban and natural environments.
4. Koshigaya
Koshigaya City is the third most populous city in Saitama Prefecture, with approximately 340,000 residents. Shin-Koshigaya Station is served by the Tobu Skytree Line, which connects directly to the Hanzomon and Hibiya Lines, and the JR Musashino Line, providing easy access to major cities. Otemachi Station and Akihabara Station can be reached in about 40 minutes without changing trains.
In 2008, "Aeon Lake Town," one of Japan's largest shopping malls, opened in the area, leading to a rise in the number of apartments and houses nearby. Every year at the end of August, the "Minami-Koshigaya Awa Odori" festival, one of Japan's three major Awa Odori festivals, attracts over 700,000 visitors, making it a lively event.
Three Advantages of Real Estate Investment in Saitama
There are three main reasons why international investors are focusing on Saitama. Here, we will compare Saitama with other prefectures and highlight the strengths that make it a great choice for real estate investment.
1. Lower Land Prices Than in Tokyo and Kanagawa, Reducing Investment Costs
Saitama Prefecture tends to have lower land prices compared to the other prefectures in the Tokyo metropolitan area, including Tokyo and Kanagawa. This allows investors to purchase investment properties such as apartments at a lower cost, which is a significant advantage.
Targeting the demographic that commutes to Tokyo for work or study can result in higher occupancy rates for rental properties, leading to stable rental income.
In addition, the lower land prices also mean lower tax burdens. Land valuation is based on land prices, which affect property taxes, inheritance taxes, and other levies, making the overall tax burden lighter compared to Tokyo.
2. Saitama Has the Second-Lowest Vacancy Rate in Japan
According to data released by the Ministry of Internal Affairs and Communications, Saitama Prefecture has a vacancy rate of 9.4%, the second lowest in Japan after Okinawa's 9.3%.
While the northern and Chichibu regions of Saitama tend to have relatively high vacancy rates, areas such as Saitama City and Koshigaya City have vacancy rates below 3%. Therefore, focusing on investment properties in the southern part of Saitama may help reduce the risk of vacancies.
Source: Ministry of Internal Affairs and Communications | 2023 Housing and Land Survey
3. Many Areas Undergoing Redevelopment
In Saitama Prefecture, redevelopment projects are planned not only in the populous cities of Saitama and Kawaguchi but also in nature-rich areas like Toda City and Wako City, which border Tokyo’s Itabashi and Nerima Wards.
These redevelopment projects are all centered around station areas, and as living environments improve, further demand for rental housing is expected.
In addition to an extensive railway network, Saitama also has highways running through it, making it a convenient area for families who own cars. Although the population growth rate is stabilizing, Saitama is still expected to attract attention as a highly convenient commuter town.
Things to Consider When Investing in Real Estate in Saitama
When investing in real estate in Saitama, there are several points to be aware of, including the characteristics of the local population and area-specific factors. To start your real estate investment with minimal risk, it is essential to understand these considerations in advance.
1. High Homeownership Rate Can Lead to Lower Rental Demand
While Saitama Prefecture has the second-lowest vacancy rate in Japan, it also has a high homeownership rate, which is another characteristic worth noting.
Saitama’s homeownership rate is 65.7%, higher than the national average of 61.2%. Among the three prefectures in the Tokyo metropolitan area, Saitama has the highest homeownership rate. As a result, targeting single-person households for investment properties, such as apartments, may yield better results than targeting families who have already purchased houses or condominiums.
Source: Ministry of Internal Affairs and Communications | 2018 Housing and Land Survey
2. Lower Average Rental Income Compared to Tokyo and Kanagawa
While the average rent in Saitama Prefecture is 59,358 yen, the third-highest in the nation, it is lower than the 81,001 yen in Tokyo and 68,100 yen in Kanagawa Prefecture.
Although it is easier to reduce costs when purchasing investment properties in Saitama compared to Tokyo or Kanagawa, it is expected that the average monthly rental income will be lower. If you are considering purchasing investment apartments or condominiums in Saitama, targeting high-rent areas such as Saitama City and Kawaguchi City, where populations are concentrated, is recommended.
Source: Ministry of Internal Affairs and Communications | 2018 Housing and Land Survey
Aug 26, 2024