Authored by the expert who managed and guided the team behind the Japan Property Pack
Everything you need to know before buying real estate is included in our Japan Property Pack
Japan's real estate market in January 2026 presents a unique opportunity where rising rates meet persistent demand in major cities, creating a market that rewards careful, location-focused buyers.
In this article, we break down current housing prices in Japan, market signals, and what the data actually tells us about whether now is the right time to buy.
We constantly update this blog post with the latest data and market shifts, so you always have fresh information to guide your decision.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Japan.
So, is now a good time?
Our verdict for January 2026 is "rather yes," meaning Japan offers solid buying opportunities if you pick the right location and property type, but you need to be more selective than in previous years.
The strongest signal supporting this conclusion is that Japan is not showing classic bubble conditions: national prices are up modestly at around 3% year-over-year, and the BIS long-run index confirms we are nowhere near 1980s-style overheating.
Another key signal is that financing remains accessible despite the Bank of Japan raising rates to 0.75%, because Flat 35 fixed mortgages at around 2.08% are still low by global standards and real borrowing costs can stay negative if inflation persists.
Other strong signals include tight inventory in prime urban condos (especially Tokyo's central wards like Minato, Shibuya, and Chuo), abundant housing stock in regional areas that keeps a lid on prices outside major cities, and increased foreign buyer interest driven by a weak yen.
The best investment strategies in Japan in 2026 favor existing condos in well-connected Tokyo or Osaka neighborhoods, detached houses where you can add value through renovation, or small multifamily buildings in areas with strong rental demand near major rail lines.
This is not financial or investment advice, we do not know your personal situation, and you should always do your own research before making any property purchase decision.
Is it smart to buy now in Japan, or should I wait as of 2026?
Do real estate prices look too high in Japan as of 2026?
As of January 2026, Japan's residential property prices look moderately stretched in prime urban condos but fairly valued in most other segments, with national prices up roughly 3% year-over-year while Tokyo new-build condos have surged to record levels averaging around JPY 133 million (about USD 870,000) in the 23 wards.
One clear on-the-ground signal that supports the "stretched in prime areas" view is that new condo supply in Tokyo remains constrained, and the limited inventory means buyers have less room to negotiate, which typically indicates seller-favorable conditions.
Another telling signal is that existing condo prices in Japan have been rising faster than detached houses (condos up 6 to 8% versus detached homes closer to flat), which shows buyers are concentrating demand in the urban segments where supply is tightest.
You can also read our latest update regarding the housing prices in Japan.
Does a property price drop look likely in Japan as of 2026?
As of January 2026, the likelihood of a meaningful nationwide property price decline in Japan is low to medium, because strong urban demand and limited new supply are offsetting the pressure from rising interest rates.
The plausible downside-to-upside range for Japan's residential prices over the next 12 months is roughly minus 3% to plus 5%, with the downside concentrated in overpriced new-build condos and the upside in well-located existing homes in major cities.
The single most important macro factor that would increase the odds of a price drop in Japan is a faster-than-expected series of Bank of Japan rate hikes, which would push mortgage costs higher and compress what buyers can afford, especially for condos.
This risk is moderate but real: the BOJ has signaled willingness to keep raising rates if inflation stays above target, and markets expect two or three more hikes by the end of 2026, which means affordability pressure could build gradually.
Finally, please note that we cover the price trends for next year in our pack about the property market in Japan.
Could property prices jump again in Japan as of 2026?
As of January 2026, the likelihood of a renewed broad-based price surge in Japan is low to medium, though localized jumps in prime Tokyo and Osaka condos remain possible if foreign capital continues flowing in and the yen stays weak.
The plausible upside for Japan's residential prices over the next 12 months is around 3 to 6% in well-located urban condos and closer to 1 to 2% for the overall market, driven by supply constraints rather than speculative frenzy.
The single biggest demand-side trigger that could drive prices to jump again in Japan is a combination of sustained yen weakness and continued foreign investor interest, which has been heavily concentrated in the JPY 100 million to JPY 300 million range for urban residences.
Please also note that we regularly publish and update real estate price forecasts for Japan here.
Are we in a buyer or a seller market in Japan as of 2026?
As of January 2026, Japan is a seller-leaning market in prime urban condos (especially central Tokyo wards like Minato, Chuo, Shibuya, and Shinagawa) and a buyer-leaning market in most detached houses and regional areas where housing stock is abundant.
The months-of-inventory metric is not published the same way as in Western markets, but REINS data shows that well-priced existing condos in Tokyo's best areas are moving within weeks rather than months, which typically means sellers have the upper hand in negotiations.
Price reductions are more common in the detached house segment and in regional cities where Japan's 9 million vacant homes create competition, giving buyers more leverage to negotiate discounts, especially for older properties that need renovation.
We have made this infographic to give you a quick and clear snapshot of the property market in Japan. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
Are homes overpriced, or fairly priced in Japan as of 2026?
Are homes overpriced versus rents or versus incomes in Japan as of 2026?
As of January 2026, Japan's homes are not dramatically overpriced versus rents or incomes when viewed nationally, but prime Tokyo condos have stretched valuations where gross rental yields have compressed to around 3.0 to 3.8%, making the math tight for investors.
The price-to-rent ratio in prime Tokyo condos is elevated compared to a balanced benchmark of around 20 to 25 years of rent: at current prices and yields, buyers in central Tokyo are looking at closer to 26 to 33 years of rent to break even, which signals some overpricing in that segment.
The price-to-income multiple in Japan varies sharply by location: Tokyo new-build condos now average around 10 to 13 times median household income, which is stretched, while regional cities and detached homes often sit closer to 5 to 7 times income, which is more affordable by global standards.
Finally please note that you will have all the indicators you need in our property pack covering the real estate market in Japan.
Are home prices above the long-term average in Japan as of 2026?
As of January 2026, Japan's residential prices are above their post-2010 lows and have risen steadily, but they remain well below the bubble peaks of the late 1980s, so we are in a moderate upswing rather than a historic overheating.
The recent 12-month price change in Japan is around 3% nationally, which is faster than the near-flat or declining years that characterized 2010 to 2020, but slower than the 5 to 8% gains seen in Tokyo condos during the strongest periods of 2023 to 2024.
Inflation-adjusted (real) residential prices in Japan have recovered from their cycle lows but remain significantly below the 1991 peak, according to the BIS long-run series, which means buyers are not purchasing into a market at historic highs even if nominal prices feel expensive.
Get fresh and reliable information about the market in Japan
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What local changes could move prices in Japan as of 2026?
Are big infrastructure projects coming to Japan as of 2026?
As of January 2026, the biggest infrastructure catalyst for residential prices in Japan is the Takanawa Gateway City development in Tokyo, which opened to the public in March 2025 and is already boosting demand for nearby condos in Minato and Shinagawa wards.
Takanawa Gateway City is fully operational now, so its price impact is already being felt, with walkable-to-station condos in the surrounding area seeing increased buyer interest; other major projects like Osaka's Umeda Phase 2 redevelopment and preparations for Expo 2025 are also lifting values in their respective neighborhoods.
For the latest updates on the local projects, you can read our property market analysis about Japan here.
Are zoning or building rules changing in Japan as of 2026?
The single most important zoning-related policy change being discussed in Japan is the strengthening of measures around vacant houses ("akiya"), as the government is working to address the record 9 million vacant homes by potentially excluding poorly maintained vacant properties from reduced tax benefits.
As of January 2026, these vacant house policies are unlikely to dramatically move prices in prime areas, but they could accelerate price declines in regional and suburban markets where vacant stock is concentrated, essentially widening the gap between desirable and undesirable locations.
The areas most affected by these rule changes in Japan are aging suburbs and rural prefectures where vacant housing rates exceed 15 to 20%, such as parts of Yamanashi, Wakayama, and Tokushima, rather than the tight urban markets of Tokyo, Osaka, or Fukuoka.
Are foreign-buyer or mortgage rules changing in Japan as of 2026?
As of January 2026, Japan is expanding reporting requirements for foreign buyers of domestic property, with new rules targeted for April 2026 that require filing a report when purchasing real estate, which could add friction and cool speculative interest without banning foreign ownership outright.
The most likely foreign-buyer rule change is this expanded reporting requirement announced by the finance minister in late 2025, which is designed to increase transparency rather than restrict purchases, but it may dampen some of the last-minute rush of foreign capital that has been driving prime Tokyo prices.
On the mortgage side, the most important change is the price of money itself: with the Bank of Japan raising rates to 0.75% and Flat 35 fixed-rate mortgages now at around 2.08% for long terms, borrowing costs have risen materially from the near-zero era, and banks are expected to raise variable loan base rates again in April 2026 if the BOJ hikes further.
You can also read our latest update about mortgage and interest rates in Japan.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Japan versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
Will it be easy to find tenants in Japan as of 2026?
Is the renter pool growing faster than new supply in Japan as of 2026?
As of January 2026, renter demand is growing modestly in Japan's major urban hubs like Tokyo, Osaka, Nagoya, and Fukuoka, while new rental supply is constrained by high construction costs and labor shortages, creating a favorable balance for landlords in well-located properties.
The clearest demand signal in Japan is urban concentration: despite national population decline, Tokyo and other major cities continue to attract young professionals, and household formation in these areas remains positive even as rural regions lose residents.
On the supply side, housing starts in Japan fell around 4 to 5% in early 2025 compared to the prior year, and construction cost inflation of 25 to 29% since 2021 has made developers more cautious about new projects, which means the supply pipeline is not flooding the market.
Are days-on-market for rentals falling in Japan as of 2026?
As of January 2026, days-on-market for quality rentals in Tokyo's best areas is falling or staying low, with well-priced units near major rail lines filling within days to a few weeks, though there is no single national rental DOM figure published like in some Western markets.
The difference in leasing speed between "best areas" and weaker locations in Japan is significant: rentals near Yamanote Line stations in Tokyo (such as Minato, Shibuya, Meguro, and Shinagawa) lease much faster than units in outlying suburbs or regional cities with high vacancy.
One common reason days-on-market falls in Japan's prime rental areas is the persistent under-supply of new condos combined with domestic buyers being priced out of purchases, which pushes more would-be owners into the rental pool and increases competition for quality units.
Are vacancies dropping in the best areas of Japan as of 2026?
As of January 2026, effective vacancy in Tokyo's best rental areas (such as Minato, Chuo, Shibuya, and Meguro in Tokyo, and Kita and Chuo in Osaka) is very low at around 3 to 4%, even though Japan's national vacant dwelling stock remains at a record 9 million units.
The vacancy rate in these prime urban areas is significantly below the 13.8% national average because the "right homes in the right places" are scarce, while the vacant stock is concentrated in aging suburbs and rural regions that do not compete for the same tenants.
One practical sign that Japan's best rental areas are tightening first is that asking rents for newly listed properties are rising 5 to 8% year-over-year in major cities, even while existing-contract rents (which are sticky) show much slower growth, indicating landlords are successfully commanding premiums on turnovers.
By the way, we've written a blog article detailing what are the current rent levels in Japan.
Buying real estate in Japan can be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
Am I buying into a tightening market in Japan as of 2026?
Is for-sale inventory shrinking in Japan as of 2026?
As of January 2026, for-sale inventory in Japan's prime condo markets is constrained compared to the same time last year, with chronic shortages in both new and resale segments keeping prices elevated in Tokyo's central wards and other major cities.
Japan does not publish a single "months-of-supply" figure like the U.S., but REINS data shows that well-priced existing condos in Tokyo move quickly (often within 1 to 2 months), which is tighter than the 4 to 6 months typically considered balanced, indicating a supply-constrained market.
The most likely reason inventory is shrinking in Japan's prime areas is a combination of constrained new construction (due to high costs and labor shortages) and existing owners being reluctant to sell when they are locked into low mortgage rates or waiting for better prices.
Are homes selling faster in Japan as of 2026?
As of January 2026, median time-to-sell for well-priced existing condos in Japan's major cities is relatively fast (often 30 to 60 days in prime Tokyo areas), though overpriced listings and detached houses in weaker locations can sit for several months.
Year-over-year, selling times for quality condos in Japan have remained stable or slightly improved as inventory stays tight, while detached houses and regional properties have seen modestly longer selling times as buyer caution increases with rising mortgage rates.
Are new listings slowing down in Japan as of 2026?
As of January 2026, new for-sale listings in Japan appear to be stable to slightly slower than the prior year, though we are not fully confident in precise year-over-year numbers because Japan lacks a single consolidated new-listings tracker like some Western markets have.
Seasonally, Japan sees stronger listing activity in spring (March to May) ahead of the school year and corporate transfer season, so January levels typically look slower, and the current pace does not seem unusually low for this time of year based on historical patterns.
The most plausible reason new listings might slow in Japan is that existing homeowners, especially those with low fixed-rate mortgages from the near-zero era, are reluctant to sell and buy at today's higher rates, creating a "lock-in" effect similar to what other markets have experienced.
Is new construction failing to keep up in Japan as of 2026?
As of January 2026, new housing construction in Japan's prime condo submarkets is not keeping up with demand, which is why prices have risen to record levels in Tokyo's 23 wards, though Japan-wide the story is different because total housing stock continues to expand and vacancies remain high.
Housing starts in Japan declined around 4 to 5% in early 2025 compared to the prior year, and high construction costs (up 25 to 29% since 2021) plus labor shortages have made developers cautious about launching new projects, especially at price points that middle-income buyers can afford.
The single biggest bottleneck limiting new construction in Japan is the combination of elevated material costs and a severe construction labor shortage driven by the country's aging workforce, which makes it expensive and slow to bring new units to market.
We made this infographic to show you how property prices in Japan compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
Will it be easy to sell later in Japan as of 2026?
Is resale liquidity strong enough in Japan as of 2026?
As of January 2026, resale liquidity in Japan is strong for well-located condos near major rail stations (such as Tokyo's Minato, Chuo, Shibuya, and Shinagawa wards, or Osaka's Kita and Chuo districts), but weaker for older detached houses in suburban or regional areas.
Median days-on-market for quality existing condos in Japan's best areas is often 30 to 60 days, which compares favorably to a "healthy liquidity" benchmark of under 90 days, meaning sellers can expect to transact within a reasonable timeframe if pricing is realistic.
The property characteristic that most improves resale liquidity in Japan is proximity to a major train station (ideally within 10 minutes walk), combined with a well-managed building with clear maintenance reserve history, because Japanese buyers prioritize convenience and building condition.
Is selling time getting longer in Japan as of 2026?
As of January 2026, selling times in Japan are holding steady for well-priced condos in prime locations, but there are signs of modest lengthening for overpriced listings and for detached houses as rising mortgage rates make buyers more cautious and selective.
Current median days-on-market in Japan's best condo markets ranges from around 30 to 60 days for realistic prices, while the realistic low-to-high range across all listings can stretch from 2 weeks for hot properties to 6 months or more for overpriced or poorly located homes.
One clear reason selling time can lengthen in Japan is affordability pressure from rising mortgage rates: as Flat 35 rates have climbed to around 2.08% and variable rates are expected to increase further in 2026, buyers simply cannot afford as much, which slows absorption of higher-priced inventory.
Is it realistic to exit with profit in Japan as of 2026?
As of January 2026, the likelihood of exiting with a profit in Japan is medium to high for well-located condos purchased at fair prices and held for at least 5 years, but lower for detached houses (which depreciate) or properties bought at current record-high prices in overheated segments.
The minimum holding period in Japan that most often makes exiting with profit realistic is around 5 to 7 years, because this timeframe allows enough price appreciation (even at modest 2 to 3% annual growth) to offset the substantial round-trip transaction costs.
Total round-trip costs (buying plus selling) in Japan are significant: expect roughly 6 to 10% of the property value, including acquisition tax, registration fees, agent commissions (typically 3% plus tax on each side), and various fees, which works out to around JPY 6 to 10 million on a JPY 100 million property (roughly USD 40,000 to 65,000 or EUR 37,000 to 60,000).
One clear factor that most increases profit odds in Japan is buying an existing condo slightly below market value in a high-demand area with strong rail access, because these properties benefit from both price appreciation and sustained liquidity when you eventually sell.
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What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Japan, we always rely on the strongest methodology we can, and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why it's authoritative | How we used it |
|---|---|---|
| Ministry of Land, Infrastructure, Transport and Tourism (MLIT) | Japan's central government body for official land-price programs and market monitoring. | We used it to anchor land value trends using official frameworks. We also relied on it to avoid unverified market commentary. |
| MLIT JRPPI Methodology | The official methodology note for Japan's transaction-based residential price index. | We used it to understand how Japan's official index adjusts for quality changes. We relied on it to interpret price growth accurately. |
| REINS (Real Estate Information Network System) | Japan's national MLS-style system for existing-home brokerage transactions. | We used it for market-balance signals like inventory and days-on-market. We relied on it to assess buyer versus seller conditions. |
| Japan Housing Finance Agency (JHF) Flat 35 | The public agency-backed reference for widely used long fixed-rate mortgage pricing. | We used it to pin mortgage affordability as of January 2026. We stress-tested whether prices can keep rising if borrowing costs rise. |
| Bank of Japan (BOJ) | The primary source for Japan's monetary policy communications and rate decisions. | We used it to contextualize near-term rate risk for buyers. We framed why 2026 differs from the ultra-low-rate era. |
| Reuters | Major wire service with strong standards and direct quotes from officials. | We used it to confirm the latest policy-rate level and guidance as of early January 2026. We quantified rate headwind risk for buyers. |
| BIS via FRED | BIS is a top-tier international source; FRED is a transparent data platform. | We used it to anchor long-run cycles in Japan's housing history. We avoided over-weighting only the last 2 to 3 years of growth. |
| Statistics Bureau of Japan | Japan's official statistics authority for demographics and housing data. | We used it to ground population, household, and vacancy discussions. We explained why regional markets differ from central Tokyo. |
| Statistics Bureau Housing & Land Survey | The official 2023 survey results on vacant dwellings in Japan. | We used it to anchor Japan's vacancy reality at 9 million units. We explained structural pricing constraints outside core cities. |
| e-Stat Housing Starts | The government's central portal for official housing construction datasets. | We used it to ground the new construction pipeline discussion. We avoided relying on developer marketing for supply figures. |
| Savills Research | Major global real estate consultancy with transparent research and citations. | We used it to quantify prime Tokyo condo pricing and supply constraints. We cross-checked official series with professional market segmentation. |
| OECD Housing Prices Indicator | International organization with standardized cross-country housing metrics. | We used it to benchmark Japan's valuation pressures against long-run and peer-country metrics. We kept "overpriced?" grounded in ratios. |
| GO TOKYO (Tokyo Metropolitan Government) | Official metropolitan platform describing major projects and openings. | We used it as a real-world catalyst check for redevelopment-driven demand. We illustrated where infrastructure matters for neighborhoods. |
| CBRE Japan Market Outlook | Leading global commercial real estate services firm with Japan-specific research. | We used it for investment volume and market activity context. We referenced their projections for 2026 market conditions. |
| Global Property Guide | Independent research platform with standardized international housing analysis. | We used it for recent price growth rates and rental yield context. We cross-referenced their analysis with official sources. |
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Japan. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
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