Upscale Residential Areas in Tokyo

Tokyo is widely known as one of the greatest cities in the world, and it is especially attractive to foreign investors who are interested in Japanese real estate.

But are you familiar with the upscale residential areas in Tokyo? While some may come up with a few famous neighborhoods, most people are probably unaware of each area’s specific characteristics.

In this first of a series of articles, we focus on a few upscale residential areas in Tokyo, explaining their characteristics as well as their advantages and disadvantages in terms of real estate investment.

For this article, we’ll take a look at the upscale neighborhoods of Shoto, Seijo, and Den-en-chofu.

■Tokyo Upscale Neighborhood: Shoto, Shibuya Ward

Shibuya is known as one of the most popular commercial districts in Tokyo, particularly for young Japanese. The upscale residential area of Shoto is located just around 15 minutes on foot from Shibuya’s central commercial district.

As soon as you step into Shoto, its rich greenery and quiet environment will make you wonder how it can be located so close to the bustling commercial district of Shibuya.

One famous place in Shoto is the Shoto Museum of Art, a stylish museum that befits its location in an upscale residential area. It is frequented by wealthy Shoto residents who have a taste for fine art.

Some of its advantages in terms of real estate investment include its convenience of access, specifically its proximity to Shibuya and Omotesando Station.

Since there is a definite market demand for living in Shoto despite the high rents, property investors need not worry about finding tenants, as long as the property does not have major defects. Furthermore, the high price and convenience means that you are likely to find good and reliable buyers or tenants.

Despite the rapid decrease in the overall population of Japan, Shoto has maintained a high popularity and a steady increase in land prices. This means that property investors can expect capital gains over the long term.

On the other hand, the high land prices in Shoto means that you need to more capital to make a real estate investment. In addition to the land, most buildings in Shoto are also high-priced luxury properties.

In general, the market price for properties in Shoto is around 3 million to 5 million yen per tsubo (Japanese unit of area roughly equivalent to 3.31 square meters). Note that this price generally applies to existing properties that are around 30 years old. Newer or rare properties, such as those designed by famous architects, will have much higher prices.

But the biggest disadvantage to investing in Shoto is probably the fierce competition. Because of the extremely high demand, properties in Shoto usually get passed directly to a buyer, before they can be sold in the market. This is also true for most upscale residential areas in Japan.

In other words, even if you have enough capital, it can be very hard to find Shoto properties available in the market. If you really wish to invest in a property in Shoto, you should be prepared for a long, drawn-out campaign.

Contact wagaya Japan for inquiries on buying real estate in Japan.

■Tokyo Upscale Neighborhood: Seijo, Setagaya Ward

One of the more popular private railway lines in Tokyo for commuting is the Odakyu Line, and Seijo is one of the famous upscale residential areas located along this line.

Seijo is also known as an academic district, and is home to Seijo University, a famous private university.

Seijo has gained a reputation for being an intellectual neighborhood, and this has led many affluent businesspersons and celebrities to choose Seijo as their home. This has been a big factor in the growth of Seijo into one of Tokyo’s major upscale residential areas.

Another charm of Seijo is its rich natural environment. It is located near the Tama Hills, known for its parks, golf courses, and lush greenery. With a surrounding environment that is refreshing to both mind and body, Seijo has become a chosen residence for health-conscious and wealthy Tokyoites.

Similar to Shoto, one of Seijo’s advantages in terms of real estate investment is the consistently high demand, which means you can expect a high, stable income from your investment.

Furthermore, Seijo stands next to none as an upscale neighborhood with an image of high intellect and rich natural environment, so finding buyers or tenants who seek such conditions should be a breeze.

As for its disadvantages, just like Shoto, property prices in Seijo can be very expensive. An existing property that is around 30 years old is generally priced at around 1.5 million to 4 million yen per tsubo.

And while the number of properties in Seijo is higher compared to Shoto, it is still a very limited number. This means that acquiring an excellent property in Seijo can be very difficult due to the high demand and competition.

■Tokyo Upscale Neighborhood: Den-en-chofu, Ota Ward

Den-en-chofu is arguably the most famous high-class residential neighborhood in Tokyo. Sometimes called the Beverly Hills of Tokyo, Den-en-chofu is known for being the home of many famous baseball players, singers, and other rich celebrities.

Den-en-chofu has distinguished itself for its quiet living environment that is rich in greenery. It is also home to many prestigious junior and senior high schools as well as international schools, making it an attractive location for affluent child-rearing families who want the best education and environment for their children.

The main advantage of real estate investment in Den-en-chofu is its high name recognition and brand power as Japan’s leading upscale residential neighborhood. Simply owning a property in Den-en-chofu can be a status symbol in Japan.

Furthermore, due to Den-en-chofu’s excellent educational facilities, there is a consistently high demand for family-type properties, where tenants tend to stay for many years.

On the other hand, one disadvantage of Den-en-chofu is that its overall resident population is graying. Den-en-chofu was one of the first upscale neighborhoods to gain much popularity, and over the years, its residents have become older, with new and younger residents becoming scarcer.

Due to this fact, there is a possibility that existing properties with no inheritors can become available in the market in near future.

But Den-en-chofu’s popularity and brand power remains high, with properties generally priced at around 3 million to 4 million yen per tsubo. So even if the number of available properties increase, it would be foolish to think that acquiring a Den-en-chofu property will be easy.

In this article, we introduced three upscale residential areas in Tokyo, namely Shoto, Seijo, and Den-en-chofu. These areas are known for having a consistently high real estate demand.

Since properties in such upscale neighborhoods are generally very expensive, it is important for property investors to consider the balance of risk and reward, and have a sound investment plan.

Investing in high-class properties requires a high amount of capital as well as high overhead costs for property management and maintenance. For such a big investment, you should find a trustworthy partner who can provide you with sound advice and the necessary support.

Contact wagaya Japan for inquiries on buying real estate in Japan.