Buy a House in Okinawa! What are the Pros and Cons of Real Estate Investment in Okinawa?

Real estate in Okinawa is popular not only among Japanese investors, but also foreign investors, and it is one of the most inquired areas on our website, alongside Hokkaido, Tokyo, Yokohama, Kyoto, and Osaka.

Okinawa consists of the main island of Okinawa, and around 160 smaller islands including Miyako and Ishigaki islands. With a population of approximately 1.46 million, Okinawa Island is divided into three administrative regions: North, Central, and South, and the prefectural capital city of Naha is located in the South.

Real estate in Okinawa has different characteristics from real estate in big cities like Tokyo and Osaka. Therefore, it is important to understand these characteristics before buying a house or investing in real estate in Okinawa.

Advantage1: High Rental Demand

Okinawa is one of the few prefectures in Japan where the population is increasing, despite the overall population decline in the country. As of 2018, the rental housing rate in Okinawa is 49.5%, which is 13.9% higher than the national average of 35.6%. It is predicted that this rental housing rate will continue to increase until 2035. Therefore, if you run a rental apartment in Okinawa, you may expect a continuous demand for rental housing, which could lead to a certain profit. On the other hand, the rent market price is lower than other prefectures, and the return on investment is often lower as well. Therefore, it is important to be cautious not to purchase overpriced properties that could result in an inability to make a profit from renting apartments.

Advantage2: High demand for vacation rentals due to being one of Japan's leading resort areas

Okinawa is a popular tourist destination both domestically and internationally, alongside Hokkaido and Kyoto. In 2018, approximately 10 million tourists visited Okinawa during a period unaffected by the COVID-19 pandemic. Currently, with the pandemic nearing its end, tourists are quickly returning and there is expected to be significant demand for vacation rentals in the future.

Advantage3: Land prices in Okinawa are on the rise

According to the land price survey released by the Ministry of Land, Infrastructure, Transport and Tourism in 2020, the average change rate of residential land prices in Okinawa compared to the previous year was +4.0%. Many other prefectures had negative rates, indicating that land prices in Okinawa are on the rise compared to other prefectures. As mentioned earlier, investing in rental apartments in Okinawa may result in lower returns, but since real estate prices are on the rise, there is a big advantage in terms of the potential for future gains from selling properties.

What are the popular areas for real estate investment in Okinawa?

Naha City

Naha City is a popular area for real estate investment in Okinawa. As the prefectural capital, it offers both convenience and livability. It has Naha Airport and the only railway on the island, Yui Rail. There are large commercial facilities in the city, so shopping is not a problem. With a population of about 320,000, it has the highest demand for rental properties in the prefecture. However, Naha is a popular area, so property prices are relatively high. Therefore, it is recommended for those who prioritize stable rental income rather than high yield.

Chatan Town

Chatan Town, which is filled with exotic charm, is also popular for real estate investment in Okinawa. Located about 16km from Naha City, it is characterized by a large number of US military personnel and foreign residents. There are many restaurants and clothing stores catering to foreigners, creating an atmosphere similar to that of a foreign resort town. With the ocean nearby, marine sports can be enjoyed year-round. In addition, there are several large commercial facilities, and with over 200 restaurants, shopping and dining out can also be enjoyed.

Urasoe City

Urasoe City is a bedroom community adjacent to Naha City, located in the southern part of Okinawa Prefecture. It is one of the cities with the largest population in the prefecture, with commercial areas such as shopping malls, movie theaters, and restaurants, as well as residential areas with well-equipped parks and sports facilities. In recent years, the number of foreign tourists has also increased, creating a rich international atmosphere. With many elementary schools, junior high schools, high schools, and parks scattered throughout the city, it has become a popular area for households raising children. Therefore, if you start real estate investment with family-type apartments or condominiums, there is a possibility of achieving stable real estate rental management.

Onna Village

Onna Village, located on the west coast of Okinawa Island, is known as a resort area surrounded by beautiful sea and nature. The village is home to numerous resort hotels and condominiums, offering facilities such as beaches, pools, and spas, making it a popular destination for tourists. Diving, snorkeling, and marine sports are also popular activities, allowing visitors to enjoy the beautiful scenery of the sea. Offering a "private space for themselves" unique to villas, rather than hotels, can be highly valued. Therefore, purchasing a villa in Onna Village and renting it out as an accommodation may lead to substantial profits during the tourist season.

Advantage3: Land prices in Okinawa are on the rise

What are the disadvantages and points to note when investing in real estate in Okinawa?

Okinawa is more prone to typhoons with stronger intensity compared to other regions in Japan, which may cause damage to buildings and pose risks for those seeking profits from vacation rentals. Additionally, as the area is surrounded by the sea, salt damage caused by sea breeze may lead to deterioration of buildings. Therefore, it is important to be cautious when purchasing older properties as repair costs may add up.

Okinawa is a car society where cars are necessary in many places. While there is a monorail called Yui Rail between Naha Airport and Urasoe City, most households own a private car. When considering real estate investment in Okinawa, the availability of parking spaces is one of the important checkpoints to keep in mind.