How much does a new condo cost in Osaka?

More buyers are being priced out of the market.

According to a Savills report, the for-sale condo market in Osaka has seen notable price increments in recent years, with the average price of a new condominium in Osaka City having reached JPY1.2 million per sq m in 2024. This is due to both supply and demand side factors, which appear to continue unabated for the meantime.

“With the demand for housing continuing to increase, and new and used condominium prices hitting new peak levels, more and more potential buyers are being priced out of the for-sale market, leading to a growing number of residents turning to the rental market moving forward,” the report said.

Here’s more from Savills:

Demand for housing continues to increase in Osaka City, which has put upward pressure on prices. Firstly, population growth continues in earnest, with the city having witnessed record yearly net migration of over 16,000 people in 2024. This was especially the case in central areas, as more people return to working in the office, and more companies expand business operations and hiring activities due to strong corporate profits and the labour shortage.

Moreover, mortgage rates have long been low, lowering the barrier to purchasing residences and supporting demand, while in recent years, the weak yen has encouraged overseas buyers to enter the market.

Furthermore, supply side bottlenecks have increased scarcity in the market, playing a major part in these recent price increments. The yearly supply of condominiums in Osaka City has continued to drop since 2017, with 2024 seeing the lowest supply in more than a decade according to data from the Real Estate Economic Institute (REEI). On top of elevated construction costs, land prices continue to increase and have become increasingly difficult to procure, especially in the central wards, further adding to overall development costs and scarcity.

The elevated prices and subdued supply of for-sale condos in Osaka will likely continue to drive residents to the rental market instead. Even with the Bank of Japan increasing policy interest rates to 50 basis points (bps) in January 2025, and with further rate hikes likely, the market is unlikely to cool due to strong demand and limited supply, and many people will still be priced out. As such, the rental residential market should continue to benefit from these circumstances.

Furthermore, the high-end sector has performed even better. Indeed, many areas in the city centre have enjoyed revitalisation activity in recent years, and the area has attracted a growing population of wealthy residents, both domestic and international. In particular, GRAND GREEN OSAKA has completely transformed the Osaka station front area, and has greatly improved the appeal of the wider Umeda submarket.

This large-scale mixed-use development features ultra-luxury units that appear to have been received well, with the most expensive residence in the development reportedly on sale for JPY2.5 billion, at around JPY27 million per tsubo, showing the voracious appetite that the market has for luxury developments, which have historically been in low supply.

In close proximity to the Four Seasons Hotel Osaka in Dojima, Mitsui Fudosan is currently developing the tentatively named Dojimahama 2 Chome Project, likely featuring upscale condominium units. Nearby, Kanden Realty & Development acquired the Toyobo Building for around JPY30 billion, with the intention to redevelop the property, also likely featuring upscale residential units.

With the upcoming Expo 2025 and the Integrated Resort development, in addition to the opening of many international five-star hotel brands set to transform Osaka City’s tourism offerings and attract more affluent clientele, the demand for luxury residences is likely to continue expanding. As such, this should generate even more upward pressure on prices, especially for high-end products.