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SUMMARY
Yes, buying a new Tokyo condo can still be worth it, but only when the apartment is genuinely scarce, the buyer can hold it for years, and the price is not relying on another round of easy appreciation.
The market is now sending two messages at once. New-build prices are still at record levels and supply is exceptionally tight, but buyers are becoming more selective and resale prices have finally stopped rising every month.
The July ¥265.2 million average makes Tokyo look even more extreme than it really is. Luxury launches distorted that monthly figure, while the first-half average of ¥142.49 million gives a much better view of the broader market.
The real affordability shift is not confined to central Tokyo anymore. LIFULL found average advertised new-condo prices above ¥100 million in 19 of the 23 wards, which means the nine-figure market has spread well beyond Minato, Chiyoda and Shibuya.
Scarcity is doing a lot of the work that demand used to do. Greater Tokyo new-condo supply is now less than one-quarter of its 2000 peak, so developers can often slow launches rather than cut prices aggressively when sales weaken.
That helps explain why weak absorption does not automatically mean a crash. Contract rates have softened and unsold inventory has risen, yet developers still have enough supply discipline to keep headline pricing stubbornly high.
The secondary market is the more important warning for buyers. Tokyo Kantei's 70 m² resale benchmark has fallen for two consecutive months across the 23 wards, while central Tokyo has recorded three monthly declines, showing that sellers have lost at least some pricing power.
New-build economics now look much thinner than the headline boom suggests. A roughly ¥142.49 million new condo against a 70 m² rent of about ¥361,000 per month implies a gross yield near 3%, before management fees, reserves, tax, insurance, vacancy and leasing costs.
Higher Japanese interest rates make that low-yield setup harder to ignore. A ¥100 million mortgage costs roughly ¥282,000 per month at 1%, but around ¥385,000 at 3%, which changes the buy-versus-rent equation quickly for leveraged buyers.
Tokyo still has strong structural support: very low new supply, population growth, rising rents, high construction costs and deep demand in the best locations. Those forces are strongest around major stations, genuine redevelopment zones, permanent views and useful family layouts.
The purchase horizon has become more important than it was during the boom. A buyer who may sell in three years is exposed to transaction costs and the new-build premium, while a ten- or fifteen-year owner has more time to absorb a weak cycle and pay down principal.
The practical conclusion is simple: buy the condo, not the Tokyo story. Strong, scarce apartments can still work very well, but ordinary new builds priced on the assumption that the market will keep bailing out average purchases are much harder to justify.
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Why are people suddenly questioning whether a new Tokyo condo is worth buying?
Buying a new Tokyo condo is harder to justify today because prices have kept climbing while buyers have started pushing back.
According to the Real Estate Economic Institute, the average new-condo price in Tokyo's 23 wards reached ¥137.84 million in fiscal 2025, up 18.5% in one year. During the first half of 2026, it climbed another 9.1% year on year to ¥142.49 million.
Those numbers would normally suggest a market where demand is running away from supply. The sales data tell a less comfortable story. Tokyo's 23 wards released 7,708 new condos during fiscal 2025, 6.8% fewer than a year earlier, while the initial contract rate dropped sharply. Across Greater Tokyo, the contract rate fell to 62.9%, and only 510 apartments, or 2.4% of releases, sold out immediately.
That combination is what makes the question interesting now. Developers are asking record prices for increasingly scarce apartments, yet buyers have become noticeably more selective.
The latest resale data adds another warning. Tokyo Kantei's standardized 70 m² price for the 23 wards fell in June after 25 straight monthly increases, then slipped again in July. Central Tokyo recorded a third consecutive monthly decline.
Tokyo condos are still extremely expensive. What has changed lately is that higher prices no longer come with equally convincing evidence that buyers will accept the next increase.
| Tokyo condo market | Previous level | Latest level | Change |
|---|---|---|---|
| 23-ward new-condo average, fiscal year | ¥116.32m | ¥137.84m | +18.5% |
| 23-ward new-condo average, first half | ~¥130.6m | ¥142.49m | +9.1% |
| 23-ward annual new supply | 8,272 | 7,708 | -6.8% |
| Greater Tokyo contract rate | 66.8% | 62.9% | -3.9 pts |
| Immediate sellouts | 889 | 510 | -43% |
| Greater Tokyo unsold inventory | 6,116 | 6,409 | +293 units |
Does Tokyo's ¥265 million condo average mean prices have gone crazy?
Tokyo's ¥265 million average is real, but it badly exaggerates what happened to the price of a normal new condo.
The Real Estate Economic Institute reported that the average new-condo price in the 23 wards jumped 96% year on year to ¥265.2 million in July. Taken literally, that sounds like the Tokyo market almost doubled in twelve months.
The projects released that month explain much of the jump. Expensive Minato properties averaging around ¥500 million entered the sample, alongside a large Kita project averaging roughly ¥150 million. Almost half of Greater Tokyo's new supply that month was also concentrated in the 23 wards.
We get a much better picture by looking at the first six months instead. The average new condo in the 23 wards cost ¥142.49 million, which was still a record and still 9.1% higher than a year earlier.
LIFULL HOME'S provides another useful check. Among new condos advertised from January through May, the average asking price across the 23 wards was ¥168.84 million and the average price per square metre was ¥2.305 million. Nineteen of the 23 wards had an average unit price above ¥100 million.
Even Sumida, Arakawa, Itabashi and Adachi crossed ¥100 million for the first time in LIFULL's survey. So Tokyo's affordability problem has clearly spread beyond Minato, Chiyoda and Shibuya.
The ¥265 million headline is mostly a luxury-project mix effect. The broader move toward nine-figure new condos across Tokyo is very real.
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Are buyers still fighting over every new Tokyo condo?
No. Buyers are still fighting over the best Tokyo condos, but developers can no longer assume that almost every launch will sell quickly.
That difference is already visible in the contract data. Greater Tokyo's initial contract rate finished fiscal 2025 at 62.9%, down 3.9 percentage points in one year. Only 2.4% of released units achieved an immediate sellout.
Historically, roughly 70% has often been used in Japan as a loose benchmark for a healthy initial sales rate. Recent monthly results jump above and below that level depending heavily on which developments reach the market.
We therefore have a much more uneven market than the record headline prices suggest. A rare apartment attached to a major redevelopment can still attract several applicants. A less distinctive project can sit on the market even while its developer refuses to cut the official price.
As seen above, unsold inventory across Greater Tokyo ended fiscal 2025 at 6,409 units, up 293 from a year earlier. That increase remains manageable, but it confirms that record prices are producing resistance.
For someone buying today, the project's own demand matters more than the Tokyo average. Paying ¥150 million for an apartment because "Tokyo condos are hot" is becoming a dangerous shortcut.
Can Tokyo's shortage of new condos keep prices high?
Yes. The severe shortage of new Tokyo condos remains the strongest protection against a broad price crash.
Greater Tokyo released just 21,659 new condos during fiscal 2025. According to the Real Estate Economic Institute, that was the lowest fiscal-year total since its records began in 1973.
The comparison with earlier decades is striking. Greater Tokyo released 95,479 condos at the 2000 peak. Current annual supply is less than one-quarter of that level.
Tokyo's 23 wards contributed only 7,708 units during fiscal 2025. Developers are dealing with high land prices, expensive construction materials, higher labour costs and stricter building requirements. LIFULL identified those same pressures when explaining why advertised new-build prices have risen across almost every ward.
Developers have reacted by building less and releasing projects more carefully. When demand weakens, many can slow launches before resorting to large headline discounts.
That gives Tokyo an unusual downside dynamic: sales volumes can fall substantially while prices remain stubbornly high.
Expensive construction does not automatically mean the apartment is worth the asking price. Buyers can still say no. But today's exceptionally thin pipeline makes a classic oversupply crash much less likely.
| Greater Tokyo new-condo supply | Units |
|---|---|
| 2000 peak | 95,479 |
| Fiscal 2025 | 21,659 |
| Decline from peak | ~77% |
| Tokyo 23 wards, fiscal 2025 | 7,708 |
| Greater Tokyo unsold inventory | 6,409 |
| Immediate sellouts | 510 |
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Have Tokyo resale condo prices finally started falling?
Yes, central Tokyo resale condos have started correcting, although the decline is still tiny compared with the preceding boom.
Tokyo Kantei's standardized 70 m² resale price for the 23 wards fell 0.8% in June to ¥127.41 million. That ended 25 consecutive months of increases. July brought another 0.1% decline to ¥127.24 million.
Central Tokyo looks softer than the 23-ward average. By July, prices there had declined for three consecutive months, while the number of units circulating on the market increased.
There was already evidence of sellers struggling with their asking prices in June. Tokyo Kantei reported that more than half of the observed stock in central Tokyo had undergone a price revision.
Nobody should call two monthly declines of 0.8% and 0.1% a crash. The useful observation is that sellers have finally lost some of their pricing power.
That shift is important to someone buying new because today's new condo becomes tomorrow's resale condo. A developer may successfully sell a launch at ¥180 million, but the owner eventually has to compete with every comparable apartment already trading on the secondary market.
The latest resale numbers make short-term appreciation much harder to take for granted.
Are new Tokyo condos too expensive compared with resale condos?
For many projects, yes. The premium for buying brand new has become large enough that we would want a very good reason to pay it.
During the first half of 2026, the average new condo in the 23 wards cost ¥142.49 million. Tokyo Kantei's standardized 70 m² resale benchmark was around ¥127.2 million by July.
Those datasets are not perfectly comparable. New developments can be larger, newer, better specified and concentrated in more expensive neighborhoods. We should therefore resist turning the roughly ¥15 million gap into a precise "new-build premium."
LIFULL's listing data shows an even more expensive side of the new market, with an average asking price of ¥168.84 million among the developments it tracked during the first five months of the year.
The key issue is what remains once the apartment stops being new.
A shiny lobby, brand-new fixtures and developer marketing lose part of their value almost immediately. Station access, layout, land value, view, building quality and management remain.
We would happily choose an excellent ten-year-old condo over an average new one at the same price. Today's pricing gives buyers less room to make the opposite choice simply because they like new buildings.
| 23-ward benchmark | Approximate price |
|---|---|
| New condo, fiscal 2025 average | ¥137.84m |
| New condo, H1 2026 average | ¥142.49m |
| Tokyo Kantei resale 70 m², June | ¥127.41m |
| Tokyo Kantei resale 70 m², July | ¥127.24m |
| LIFULL new-condo advertised average | ¥168.84m |
| LIFULL average asking price per m² | ¥2.305m |
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Are Tokyo rents rising fast enough to support these condo prices?
No. Tokyo rents are rising today, but nowhere near fast enough to make record new-condo prices look cheap.
Tokyo Kantei put average condominium rent in the 23 wards at ¥5,157 per m² in July, another recent high after a 0.8% monthly increase.
For a 70 m² apartment, that works out to roughly ¥361,000 per month, or ¥4.33 million per year.
Compare that with a ¥142.49 million new condo and the rough gross yield comes to only about 3.0%. The calculation is even less attractive once we subtract management fees, reserve contributions, property tax, insurance, vacancy and leasing costs.
The newest apartments also have an interesting problem. Tokyo Kantei has recently described rents for properties aged five years or less as relatively sluggish compared with older age groups.
So new-condo purchase prices are rising rapidly while rents on very young stock are showing less momentum.
For owner-occupiers, a 3% gross rental yield is only part of the story. For investors, it is difficult to ignore.
| 70 m² Tokyo condo example | Approximate amount |
|---|---|
| Rent per m² | ¥5,157/month |
| Monthly rent | ¥361,000 |
| Annual gross rent | ¥4.33m |
| Yield on ¥127.24m resale price | ~3.4% |
| Yield on ¥137.84m new price | ~3.1% |
| Yield on ¥142.49m new price | ~3.0% |
Does buying a Tokyo condo still make more sense than renting?
For a long-term household, buying can still make sense, but the monthly advantage over renting has shrunk dramatically.
At roughly ¥5,157 per m², a 70 m² condo rents for around ¥361,000 per month across the 23 wards.
Now consider a ¥100 million mortgage over 35 years. At 1% interest, the monthly payment is roughly ¥282,000. At 2%, it climbs to around ¥331,000. At 3%, it reaches about ¥385,000.
Mortgage payments are obviously different from rent because part of each payment builds equity. Owners also pay management charges, repair reserves, taxes, insurance and transaction costs.
What has changed is the starting point. Tokyo buyers used to combine much lower property prices with extraordinarily cheap financing. Those two advantages made the buy-versus-rent calculation unusually favorable.
Today's buyer is entering after a huge increase in condo prices and during a period of rising borrowing costs.
Someone who expects to live in the apartment for 15 years can still come out well. Someone who may leave Tokyo in three years has a much harder case.
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Have higher Japanese interest rates made new Tokyo condos less attractive?
Definitely. Higher Japanese interest rates have removed one of the biggest advantages Tokyo condo buyers enjoyed during the previous boom.
The Bank of Japan has raised its policy rate to around 1.0%, up from essentially zero only a few years ago.
That sounds small by American or European standards. For Japan's housing market, the direction and size of the change are significant because property prices were partly built during an era when borrowers could assume extraordinarily cheap money.
A ¥100 million, 35-year mortgage costs about ¥282,000 per month at 1%. At 2%, the payment rises to roughly ¥331,000. At 3%, it reaches around ¥385,000.
The difference between 1% and 3% is therefore more than ¥100,000 every month.
Many Japanese borrowers still use floating-rate mortgages priced below long-term fixed alternatives, so nobody should assume every current buyer is paying 3%. But floating borrowers are precisely the households most exposed if Japanese rates continue rising.
Higher rates also affect investors differently from homeowners. A property yielding roughly 3% gross becomes less compelling when financing and alternative returns both move higher.
The remarkable part of Tokyo's market is that new-build prices have continued setting records despite this tightening. That shows how powerful supply constraints and wealthy-buyer demand remain, but it also leaves today's leveraged buyer with much less room for error.
| ¥100m mortgage over 35 years | Approx. monthly payment |
|---|---|
| 1.0% | ¥282,000 |
| 2.0% | ¥331,000 |
| 3.0% | ¥385,000 |
| 3.5% | ¥413,000 |
| Difference between 1% and 3% | ~¥103,000/month |
| Extra annual payment | ~¥1.24m |
Is Tokyo's population strong enough to keep supporting condo demand?
Yes. Tokyo is still gaining residents, which gives its housing market a much better demographic base than Japan's national population figures suggest.
Tokyo Metropolitan Government resident-register data counted 14.08 million people at the start of 2026, an increase of roughly 75,000 in one year.
The interesting part is where that growth came from. The Japanese resident population increased by only about 12,500, while Tokyo added roughly 62,500 foreign residents. The foreign population grew 8.7% in one year and reached almost 784,000.
Many of those newcomers will rent rather than buy a ¥100 million condo. Their arrival still increases competition for housing and supports rents, particularly in well-connected neighborhoods.
Tokyo also keeps attracting younger Japanese residents for university and work even while much of the country loses population.
We would not build a bearish Tokyo condo thesis around "Japan is shrinking." That statement is true nationally and too crude locally.
The better question is whether the specific ward and station continue attracting households. Tokyo's demographic advantage will support strong locations much more than weak ones.
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Which new Tokyo condos are still worth buying?
The new Tokyo condos we still like are the ones future buyers will struggle to replace.
A short walk to a major station remains one of the clearest advantages. In Tokyo, three minutes versus twelve minutes on foot can materially change both rental demand and resale liquidity.
Large redevelopment projects can also work well when the development genuinely improves transport, retail, public space or the surrounding neighborhood. The important part is the underlying improvement rather than the developer's branding.
Permanent views are another real form of scarcity. An apartment facing a large park, river or protected low-rise area can keep an advantage for decades. A high-floor "city view" overlooking land that can later support another tower deserves much less of a premium.
Layouts matter too. A sensible two- or three-bedroom apartment that families can actually use usually has a deeper resale pool than an awkward luxury unit full of corridors and tiny bedrooms.
Management becomes increasingly important with age. Reserve funds, maintenance quality and the owners' association eventually matter more than the launch-day interior package.
We would pay extra for characteristics that remain scarce ten years from now. We would be much less willing to pay simply for a new building.
Is central Tokyo still safer than buying in the outer wards?
Central Tokyo remains safer for resale, but some outer-ward condos now offer a better deal because prime-area pricing has become so extreme.
Minato, Chiyoda, Chuo, Shibuya and other central districts attract a broader pool of wealthy Japanese buyers, corporate demand and overseas money. Good properties there are generally easier to resell.
The entry price can be brutal. LIFULL's recent listing survey put Chiyoda's average new-condo asking price at ¥351.5 million, Chuo at ¥297.92 million, Shibuya at ¥277.92 million and Minato at ¥254.85 million.
Moving outward no longer guarantees cheap housing. Average new-condo asking prices reached ¥138.1 million in Sumida, ¥131.61 million in Kita, ¥111.66 million in Adachi and ¥102.4 million in Itabashi.
This spread creates some strange comparisons. A buyer may find himself paying more than ¥100 million in a location that historically traded at a large discount to central Tokyo.
When outer-ward prices approach central-Tokyo levels without offering equally strong transport or scarcity, we become cautious very quickly.
The best value today may be a strong non-prime location rather than the cheapest ward or the most prestigious postcode.
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Is buying a new Tokyo condo off-plan still a good idea?
Buying a Tokyo condo off-plan still works when the buyer gets an unusually good unit early, but buying before completion is no longer an automatic path to profit.
During the strongest part of Tokyo's run, early buyers could contract at one price and watch later phases launch higher. By completion, comparable resale prices had often moved upward as well.
That setup made off-plan buying look almost easy.
Today the developer may already be pricing in several years of expected appreciation before construction is finished. Meanwhile, Tokyo Kantei's latest secondary-market data shows that resale prices can now move down as well as up.
We would therefore focus much more on the apartment itself: floor, orientation, view, plan, station distance and the pricing of later phases.
The strongest case is an early release where a developer genuinely underprices a scarce unit relative to what comes later.
Buying an average unit simply because completion is three years away relies heavily on the market continuing to rise during those three years. That bet looks considerably less comfortable now.
How long do you need to own a new Tokyo condo for the purchase to make sense?
At today's prices, we would want roughly a ten-year horizon before feeling comfortable buying a new Tokyo condo.
Short holding periods expose the buyer to acquisition costs, financing costs and selling costs before the property has had much time to appreciate or the mortgage balance has fallen meaningfully.
There is also the new-build premium. The buyer pays it on day one, while the apartment enters the resale market after purchase.
A three-year owner therefore needs the market to rise enough to cover several layers of friction. Recent Tokyo appreciation made that possible surprisingly often. We would not build a purchase decision around receiving the same gift again.
A ten- or fifteen-year owner has more flexibility. Mortgage principal falls, transaction costs are spread over a longer period and a temporary housing downturn becomes less important.
Long ownership cannot rescue a bad apartment. It simply gives a good apartment enough time to work.
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Who can still make money buying a new Tokyo condo now?
Long-term owner-occupiers and cash-rich buyers of genuinely scarce properties still have a strong case; highly leveraged investors and short-term flippers have a much weaker one.
For an owner-occupier, the return includes more than rent or resale appreciation. The household gets housing stability, pays down principal and avoids future rent increases on the same home.
A wealthy buyer seeking long-term exposure to prime Tokyo can also accept a low current yield if the apartment is exceptionally scarce. Foreign buyers may find Tokyo attractive when their home currency is strong against the yen, although currency swings can amplify losses just as easily as gains.
Rental investors face tougher arithmetic. Gross yields around 3% on broad new-build pricing leave little room once costs enter the calculation, especially now that Japanese interest rates have moved higher.
Short-term flippers face the weakest setup. Central resale prices have recently softened, asking-price reductions have become more common and developers are already launching new units at extremely aggressive valuations.
We can still find good purchases in Tokyo today. The buyer simply needs a much better reason than "Tokyo property keeps going up."
So, is buying a new Tokyo condo still worth it?
Yes, but buying a new Tokyo condo is worth it today only when the property is genuinely good and the buyer can hold it for years.
We would reject the idea that Tokyo's new-condo boom has already broken. Supply remains extraordinarily low, Tokyo is still adding residents, rents continue to rise and developers face high land and construction costs. Those forces should keep supporting strong projects.
We would also reject the old assumption that almost any new Tokyo condo will produce an attractive return.
Prices have run far ahead. The first-half average in the 23 wards has reached ¥142.49 million, while LIFULL found advertised averages above ¥100 million in 19 of the 23 wards. Mortgage rates are moving upward. Gross rental yields around 3% look thin. Most importantly, the latest Tokyo Kantei data shows that the secondary market has finally stopped climbing every month.
As pointed out above, central resale prices have now declined for three consecutive months. That still falls far short of a crash, but it changes what we should demand from a new purchase.
We would buy a new Tokyo condo today when it sits close to an important station, has a useful layout, enjoys genuine scarcity, comes with sensible building management and can be held for roughly a decade or longer.
We would avoid paying a huge new-build premium for an ordinary apartment, especially if the plan depends on rent covering an expensive mortgage or another buyer paying substantially more within a few years.
Tokyo still has attractive new condos. The days when the market could make an average purchase look smart are fading.
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OUR METHODOLOGY
This analysis tests whether buying a new Tokyo condo still makes sense at current prices. We treated it as a decision question rather than a simple call on whether the market is bullish or bearish, and compared new-build pricing with buyer demand, supply, resale-market momentum, rents, financing conditions, population growth and the characteristics that tend to support long-term resale value.
We used each dataset for what it measures most directly. Real Estate Economic Institute releases are used for new-condo pricing, supply, contract rates, inventory and launch conditions. Tokyo Kantei is used for standardized 70 m² resale prices, rents, price revisions, running costs, short-term resale activity and resale-value analysis.
Monthly new-build averages can be distorted by project mix, especially when a small number of ultra-luxury developments launch at the same time. That is why the unusually high July average is checked against the first-half 2026 average and LIFULL HOME'S ward-level advertised-price data rather than treated as a clean measure of what happened to a typical Tokyo condo.
The buy-versus-rent and investment sections use simple calculations from published inputs. The 70 m² rent estimate is derived from Tokyo Kantei's rent-per-square-metre figure, while the gross-yield examples compare that rent with the published resale and new-build price benchmarks. Mortgage-payment examples use a ¥100 million loan over 35 years at different interest rates.
We also cross-checked the secondary market with East Japan REINS and used Tokyo Metropolitan Government resident-register data to separate Tokyo's local population trend from Japan's national demographic decline. The financing discussion uses the Bank of Japan's current policy-rate setting as the interest-rate backdrop.
Key sources used for this analysis include: Real Estate Economic Institute on the fiscal 2025 Greater Tokyo new-condo market, Real Estate Economic Institute on the first half of 2026, the institute's monthly new-condo archive, LIFULL HOME'S on 2026 new-condo asking prices across Tokyo's 23 wards, Tokyo Kantei's June 2026 70 m² resale-price report, Tokyo Kantei's 70 m² resale-price series, Tokyo Kantei's July 2026 condominium-rent report, East Japan REINS' July 2026 Monthly Market Watch, Tokyo Metropolitan Government resident-register population data, and the Bank of Japan's July 31, 2026 monetary-policy statement.
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