Kyoto is Japan’s second-largest tourism market and a top destination for both domestic and international travelers, drawn by its deep history, refined cuisine, and beautifully preserved townscape. Among its most attractive real estate assets is the Kyoto Machiya—a rare and culturally significant townhouse that is rapidly gaining recognition as a high-performing and resilient investment.
Key Advantages of Investing in Kyoto Machiya
Rare Asset with Dual Appreciation: Land + Structure
Unlike most Japanese properties—where the building value typically depreciates over time—Kyoto Machiya appreciate in both land and structure. In prime areas such as Gion and Higashiyama, Machiya prices have more than doubled over the past decade.
Renovated properties that blend tradition with modern amenities often resell at a significant premium over their acquisition and renovation costs.
Shrinking Supply Drives Value
Kyoto once had over 47,000 Machiya, but as of 2024, that number has fallen to just 34,000—a nearly 30% decrease in less than 15 years. According to Kyoto City’s 2016 survey, an average of 800 Machiya are lost each year—that’s more than two per day.
This accelerating decline in supply is creating a scarcity premium and driving further price appreciation.
Strong Returns & Capital Gains
Legal short-term rental (STR) operations typically yield net returns of 5–7%. Exceptional cases achieve over 20% in combined annual capital gains and cash returns.
In 2024, Shiki Properties recorded an average daily rate (ADR) of ¥40,800, significantly outperforming Kyoto’s market average of ¥20,000–27,000.
Renovation Quality Enhances Value
To unlock the full potential of a Machiya, blending heritage with comfort is key. Shiki works closely with local artisans and renovation specialists to preserve historic features such as latticework and exposed beams, while integrating modern conveniences like air conditioning and smart home systems—delivering a luxury hotel–level guest experience.
■ Attractive Entry Point Compared to Global Markets
Fully renovated, STR-compliant Machiya can be acquired from around ¥70–80 million, with limited opportunities for lower-cost un-renovated properties.
Compared to historic properties in cities like Paris, Rome, or London, Kyoto Machiya offer excellent value and yield at a relatively modest entry point.
Keys to a Successful Investment in Kyoto Machiya
Strict Regulations (That Actually Benefit Investors)
Kyoto’s STR regulations include:
- Local manager proximity requirements
- Zoning restrictions
- Minimum road width for access
While complex, these rules also limit oversupply and protect ADRs and occupancy for properly licensed, legal operations.
Licensing Risk Requires Expert Navigation
Failure to secure proper licenses has derailed many projects. Investors should always engage a licensed local legal expert (gyoseishoshi) and a trusted operator before purchasing to ensure compliance with zoning, construction law, and lodging regulations.
Location Is Everything—Especially for STRs
Performance varies dramatically by location. Properties within walking distance of major landmarks like Gion, Nishiki Market, and Kiyomizu Temple consistently outperform.
Ideal investment profile:
- 50–80 sqm (or larger), accommodating 4+ guests
- Walkable access to transport and tourist zones
- Compliant with all relevant building and lodging laws
Shiki Group: Delivering Peace of Mind and Performance
Investing in Kyoto Machiya is a unique opportunity to combine heritage preservation with tangible, long-term returns.
Shiki Group offers full-scope support—from sourcing and legal due diligence to renovation and operation—ensuring your investment is not only compliant, but also truly thriving—under a full-management model.
