What is the current macroeconomic situation and overall trend of the real estate market in Japan? (e.g., is it a buyer's market or a seller's market?)

Okay, no problem. Let me break down the current macroeconomic and real estate market situation in Japan for you in an easy-to-understand way.

First, the Big Picture of Japan's Macro Economy

To understand real estate, we need to look at the overall economic "weather." Recently, there have been several major shifts in Japan's economy that are highly relevant to ordinary people like us, especially those considering buying property.

1. Finally Entering a Period of "Mild Inflation"

What was it like before? For the past two or three decades, Japan experienced "deflation." Simply put, things kept getting cheaper, people felt their money was becoming more valuable, so they were reluctant to spend or invest. The economy felt stagnant.
What about now? The opposite is happening now. Influenced by the global environment and Japan's own policies, prices are starting to rise. Everything from convenience store rice balls to electricity bills is going up. This is "inflation." While it puts pressure on living costs, mild inflation is actually good for the economy overall – it signals the economy is "moving."
Impact on buying property? When money sitting in the bank risks losing value due to inflation, many people look for ways to preserve and grow their wealth. Real estate, as a tangible asset, becomes an attractive option. People feel that if they don't buy now, it might be more expensive later.

2. The Yen's "Massive Easing" and Significant Depreciation

This is a key point. You've probably noticed the yen has fallen significantly against currencies like the Chinese Yuan and the US Dollar.
An analogy: Previously, a 50 million yen property might have cost you 2.5 million RMB. With the yen's depreciation, you might now get it for 2.3 million RMB or even less. For those of us using foreign currencies, all Japanese assets are effectively on sale.
Impact on buying property? This directly stimulates a large influx of overseas investors (including from China, Singapore, Europe, the US, etc.) into the Japanese property market. They see it as a great deal – a chance to invest while potentially enjoying Japan's living environment. This strong purchasing power is a major driver pushing up prices in core cities.

3. Wages Are Starting to Rise, But...

In response to inflation, major Japanese companies have started raising employee wages – good news not seen in decades.
However! The pace of wage growth hasn't yet caught up with the pace of price increases. So, many local Japanese residents feel increased pressure on their household budgets.
Impact on buying property? This creates a divergence: Overseas buyers and high-income Japanese have strong purchasing power, but ordinary salaried workers become more cautious about taking on mortgages because both interest rates and living costs are rising.

4. Farewell to the "Negative Interest Rate" Era

The Bank of Japan recently ended its long-standing "negative interest rate" policy and began raising rates slightly.
What does this mean? It means the cost of borrowing money from banks will increase. Although the initial increases are very, very small – almost negligible – the "trend" is significant. It signals to the market that the era of borrowing money almost for free may be slowly coming to an end.
Impact on buying property? The short-term impact is minimal, as mortgage rates remain very low. But long-term, if rates continue to rise, it will increase monthly mortgage payments, potentially cooling down the overheated property market slightly.

Now, Let's Look at the Specifics of the Real Estate Market

Given the broader economic environment above, Japan's real estate market shows a very clear trend of "divergence."

Trend 1: Core Urban Areas vs. Rural Regions – Worlds Apart

Core Cities (Tokyo Area, Osaka Area, Nagoya, Fukuoka, etc.): Very hot. Prices for new luxury condominiums (tower mansions), especially in Tokyo's 23 wards, have been steadily rising. The reasons are simple: abundant job opportunities, population inflow, good education and healthcare resources, plus the influx of overseas investors mentioned earlier. Properties in good locations sell easily.
Regional Cities and Rural Areas: A completely different picture. Severe population decline, aging populations, and numerous vacant houses ("akiya") are common. Except for a few unique tourist towns, prices in most of these areas are stagnant or even falling. You might see news about houses selling for just a few hundred thousand yen – that's referring to these locations.

Trend 2: New Construction Booming, Resale Value Depends on Location

New Construction (Especially Condos): Due to rising costs of building materials and labor, the base price of new properties is high. In prime locations, it's common for new developments to sell out quickly upon release.
Resale Properties: Value depends entirely on "location." In central Tokyo, a conveniently located, reasonably modern resale condo is also highly sought after, with strong value retention and appreciation potential. However, in remote or poorly serviced areas, resale properties are much harder to sell.

Conclusion: Is it a Buyer's Market or a Seller's Market Now?

This isn't a one-size-fits-all answer. It depends entirely on "where you are buying" and "what type of property you are buying."

In Core Areas like Tokyo's 23 Wards, Central Osaka:
- Definitely a "Seller's Market."
- Characteristics: Good properties attract multiple competing buyers as soon as they are listed. Viewings require appointments and waiting, there's little room for negotiation, and some popular listings may even require offers above the asking price. Sellers hold the upper hand; they are not worried about selling.
In Most Regional Cities and Rural Areas:
- Definitely a "Buyer's Market."
- Characteristics: There are many properties available but few buyers. You can take your time browsing and selecting, with significant room for negotiation. Sellers may be willing to lower prices to sell quickly.
In Suburbs of Core Cities or Secondary Cities:
- The market is relatively balanced, leaning slightly towards a "Seller's Market."
- Characteristics: The market is relatively healthy with active buying and selling. For well-located, good-condition properties, sellers still dictate terms. However, for properties with significant drawbacks or average conditions, buyers have more opportunity to negotiate on price.

To Summarize

If you are an overseas investor looking to buy property for investment or personal use in major cities like Tokyo or Osaka, you are facing a hot seller's market. You need to be prepared to act quickly and accept that prices are firm.

But if you are looking to experience a slower pace of life in Japan and aren't focused on the absolute core areas, then in the vast "non-core regions," you can still find a comfortable buyer's market where you can take your time choosing your ideal home.

I hope this explanation helps give you a clearer picture of the current situation in Japan. Buying property is a big decision – it always pays to look around and compare!