Japan rental market sees nationwide rent increases

Japan is experiencing a significant trend of rising residential rents, expanding beyond major metropolitan hubs to a national scale. According to data from the Japan Real Estate Institute, rent increases were observed in 84 out of 158 surveyed cities for the year ending September 2025, marking a historically notable expansion of the trend.

In Tokyo's 23 wards, Mitsubishi UFJ Trust and Banking Corporation projects an 11% increase in rental apartment prices over the next five years. This forecast is driven by rising construction and labor costs, alongside nominal wage growth. The report suggests that real estate investors remain highly active in the apartment sector, with investment in domestic rental apartments reaching 1.5 trillion yen in fiscal year 2025.

Several structural factors are contributing to this nationwide rise, including increased supply costs for new builds, historic wage hikes following spring labor negotiations, and a shift in demand as rising property prices push more individuals toward renting rather than purchasing homes.