Authored by the expert who managed and guided the team behind the Japan Property Pack
Yes, the analysis of Tokyo's property market is included in our pack
Tokyo's real estate market is a dynamic and ever-evolving landscape that captures the interest of investors and homebuyers alike.
But what are the key trends and data points you need to know for 2025? How is the market expected to shift, and what factors are driving these changes?
In this article, we'll delve into 12 crucial pieces of market data to help you navigate Tokyo's real estate scene with confidence.
Actually, we know this market inside and out. We keep tabs on it regularly, and all our discoveries are reflected in the most recent version of the Japan Property Pack
12 Key Market Data Points About the Real Estate Market in Tokyo
Here is a detailed analysis of the real estate market in Tokyo, focusing on average rents, yields, price per square meter (sqm) and square foot (sqft), and other essential metrics.
- Average Rent:
The average rent for an apartment in Tokyo varies significantly depending on the location and size. In central areas like Shibuya or Minato, the average rent for a one-bedroom apartment can range from JPY 150,000 to JPY 250,000 per month. In more suburban areas, rents can be lower, ranging from JPY 80,000 to JPY 150,000 per month.
- Rental Yields:
Rental yields in Tokyo are generally moderate, with an average range of 3% to 5%. Central districts tend to have lower yields due to higher property prices, while outer districts may offer slightly higher yields.
- Price per Square Meter (sqm):
The price per square meter in Tokyo can vary widely. In prime areas like Minato and Shibuya, prices can range from JPY 1,000,000 to JPY 2,500,000 per sqm. In more affordable areas, prices might range from JPY 500,000 to JPY 1,000,000 per sqm.
- Price per Square Foot (sqft):
Converting the price per square meter to square foot, in central Tokyo, prices can range from JPY 92,900 to JPY 232,300 per sqft. In less central areas, prices might range from JPY 46,450 to JPY 92,900 per sqft.
- Vacancy Rates:
Vacancy rates in Tokyo are relatively low, often below 5% in central areas, indicating a strong demand for rental properties. In suburban areas, vacancy rates might be slightly higher, around 5% to 7%.
- Property Taxes:
Property taxes in Tokyo are calculated based on the assessed value of the property. The standard rate is approximately 1.4% of the assessed value annually, with additional city planning taxes of 0.3%.
- Transaction Costs:
Buying property in Tokyo involves several transaction costs, including agent fees (typically 3% of the purchase price), registration fees, and taxes. Total transaction costs can range from 6% to 8% of the property price.
- Mortgage Rates:
Mortgage rates in Japan are relatively low, often ranging from 0.5% to 1.5% for fixed-rate loans, making financing attractive for buyers.
- Construction Costs:
The cost of constructing a new building in Tokyo can vary, but on average, it ranges from JPY 200,000 to JPY 400,000 per sqm, depending on the quality and location.
- Land Prices:
Land prices in Tokyo are among the highest in the world. In central areas, prices can exceed JPY 10,000,000 per tsubo (approximately 3.3 sqm), while in suburban areas, prices might be around JPY 2,000,000 to JPY 5,000,000 per tsubo.
- Population Growth:
Tokyo's population growth has been stable, with a slight increase in recent years, supporting demand for housing. The city continues to attract both domestic and international residents.
- Infrastructure Development:
Ongoing infrastructure projects, such as new subway lines and urban redevelopment, are enhancing connectivity and potentially increasing property values in certain areas.
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What You Need to Know Before Investing in Tokyo's Real Estate Market (2025)
What is the average price per square meter in Tokyo's central districts?
As of 2025, the average price per square meter in Tokyo's central districts is approximately ¥1,500,000.
This represents a 5% increase from the previous year, reflecting the ongoing demand for prime locations.
Prices can vary significantly depending on the specific district and proximity to key amenities.
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How has the rental yield in Tokyo changed over the past year?
The average rental yield in Tokyo has remained stable at around 3.5% in 2025.
This stability is attributed to a balanced demand and supply in the rental market.
Investors should consider the yield in relation to property appreciation potential.
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What are the most popular districts for foreign investors in Tokyo?
Shibuya, Minato, and Chiyoda are among the most popular districts for foreign investors in 2025.
These areas offer a blend of commercial opportunities and residential appeal.
Proximity to international schools and business hubs makes them attractive to expatriates.
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What is the current vacancy rate for residential properties in Tokyo?
The vacancy rate for residential properties in Tokyo is currently at 4.2%.
This is a slight decrease from the previous year, indicating a healthy demand for housing.
Lower vacancy rates can lead to increased rental prices and competition among tenants.
How does Tokyo's property tax compare to other major cities?
Tokyo's property tax rate is relatively low, at around 1.4% of the assessed value.
This is competitive compared to other major cities like New York and London.
Lower property taxes can enhance the overall return on investment for property owners.
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What are the projected trends for Tokyo's real estate market in the next five years?
Experts predict a steady growth in Tokyo's real estate market, with an annual appreciation rate of 3% to 4%.
Factors such as infrastructure development and the upcoming international events are expected to drive demand.
Investors should keep an eye on policy changes that might affect the market dynamics.
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How does the cost of living in Tokyo affect real estate investment?
The cost of living in Tokyo is high, which can impact the affordability of properties for local residents.
However, for international investors, the strong rental market can offset these costs through consistent rental income.
Understanding the cost of living is crucial for assessing the potential return on investment.
What financing options are available for foreign buyers in Tokyo?
Foreign buyers in Tokyo have access to various financing options, including local bank loans and international mortgage services.
Interest rates for these loans are currently around 1.5% to 2%, depending on the lender and the borrower's profile.
It's important for buyers to compare different financing options to find the most favorable terms.
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What impact does Tokyo's public transportation system have on real estate values?
Proximity to Tokyo's efficient public transportation system significantly boosts real estate values.
Properties near major train and subway stations often command a premium due to convenience and accessibility.
Investors should consider transportation links as a key factor when evaluating potential properties.
How does the aging population in Japan affect the real estate market in Tokyo?
The aging population in Japan is leading to increased demand for senior-friendly housing and healthcare facilities.
This demographic shift presents opportunities for investors in specialized real estate sectors.
Developers are increasingly focusing on creating accessible and adaptable living spaces for older residents.
What are the legal considerations for foreign investors buying property in Tokyo?
Foreign investors in Tokyo must comply with local regulations, including property registration and tax obligations.
There are no restrictions on foreign ownership, but due diligence is essential to navigate the legal landscape.
Engaging a local real estate attorney can help ensure a smooth transaction process.
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=> What are the legal requirements for buying property in Tokyo?
How does Tokyo's real estate market compare to other Asian cities?
Tokyo's real estate market is considered more stable and mature compared to rapidly growing cities like Shanghai and Bangkok.
The city's strong economic fundamentals and transparent regulatory environment attract long-term investors.
While prices are higher, the potential for steady appreciation and rental income makes Tokyo an attractive investment destination.