Real estate investment in Japan by overseas investors declined 61% y-o-y to US$ 4.9 billion in 2018, mainly due to fewer number of large transactions. Regional cities saw investment by oversease investors increase 109% y-o-y in 2018, led by Osaka, which recorded a 131% y-o-y rise. As a percentage of total inbound investment, regional cities, including Osaka and Nagoya, increased dramatically from 8% in 2017 to 41% in 2018.

Outbound real estate investment from Japan declined 29% y-o-y to US$ 1.9 billion in 2018. This followed a rise in currency hedging costs due to the growing gap between Japanese and U.S. interest rates. Another factor behind the slowdown is seen to be due to the worsening global economic outlook amid the U.S.-China trade conflict.