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Tokyo's property market continues its impressive upward trajectory as we reach mid-2025, with home prices surging 10.7% year-on-year in January 2025.
If you're considering whether to buy property in Tokyo right now, the data tells a clear story: prices are not just rising, they're accelerating at their fastest pace in over a decade. This isn't a temporary spike – it's part of a sustained trend that has seen Tokyo's residential property index climb from 90 points in 2015 to nearly 130 points today.
If you want to go deeper, you can check our pack of documents related to the real estate market in Japan, based on reliable facts and data, not opinions or rumors.
Tokyo property prices are rising strongly, with a 10.7% year-on-year increase recorded in January 2025, marking the fourth consecutive year of gains.
The market is driven by limited supply, strong domestic and foreign demand, and a weak yen, with luxury properties and central ward locations experiencing the most dramatic appreciation.
| Property Type | Current Price (2025) | Year-on-Year Change |
|---|---|---|
| Existing Condominiums (per sqm) | ¥819,000 ($5,439) | +7.8% |
| New Condominiums (per sqm) | ¥1,116,000 ($7,411) | -3.3% |
| Detached Houses (average) | ¥42.13 million ($279,760) | +3.5% |
| New Detached Homes (average) | ¥78.59 million ($534,000) | +2.4% (monthly) |
| Central Tokyo New Condos | >¥100 million ($660,000+) | Sustained high |
| Residential Land (23 wards) | ¥771,600 per sqm | +7.9% |
| Home Price Index (Tokyo) | +10.7% YoY | January 2025 |
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
How much have property prices increased in Tokyo recently?
Tokyo property prices have surged dramatically, with the home price index jumping 10.7% year-on-year as of January 2025.
This impressive growth continues a strong upward trend that has seen the Tokyo residential property market post consecutive annual gains of 11.55% (2021), 7.3% (2022), 3.13% (2023), and 8.44% (2024). The Tokyo Metropolitan Area, which includes surrounding prefectures, recorded an 8.14% increase in the same period.
Looking at specific property types, existing condominiums in Tokyo have performed exceptionally well, with average prices reaching ¥819,000 per square meter – a 7.8% increase from the previous year. For perspective, a typical 70-square-meter apartment now costs approximately ¥57.3 million ($380,730).
New condominiums command even higher prices at ¥1,116,000 per square meter, though this represents a slight 3.3% decrease from their peak. In central Tokyo's 23 wards, the average new condominium now exceeds ¥100 million ($660,000), with luxury units priced above this threshold seeing a 72% surge in offerings.
As we reach mid-2025, the market shows no signs of slowing down, with January sales data indicating existing condo sales up 19.7% and detached house sales surging 79.3% compared to the previous year.
Which Tokyo neighborhoods are seeing the fastest price growth in 2025?
Central Tokyo's premium wards are leading the property price surge, with Chuo, Meguro, and Minato wards experiencing the most dramatic increases.
Chuo Ward has emerged as the most expensive district, with residential land prices reaching an astronomical ¥3,282,900 per square meter. Shibuya Ward recorded the single largest site-specific jump at 32.7%, reflecting the area's continued appeal to both domestic and international buyers.
Redevelopment hotspots are experiencing particularly strong growth. Nakano Ward saw prices jump 16.3%, while Suginami recorded a 15.1% increase. Taito's Asakusa area, benefiting from tourism revival and cultural appeal, achieved a 14.8% gain.
The traditional "Big Five" central wards – Chiyoda, Minato, Chuo, Shibuya, and Bunkyo – remain the most sought-after locations. Properties in these areas regularly exceed ¥2 million per square meter for luxury apartments, particularly in neighborhoods like Roppongi, Azabu, Daikanyama, and Omotesando.
Overall, 10 out of Tokyo's 23 wards are experiencing double-digit growth rates in residential land prices, with the average across all 23 wards standing at 7.9% year-on-year growth.
What property types are experiencing the sharpest price increases?
Luxury properties priced above ¥60 million are leading Tokyo's market with the most dramatic price appreciation.
High-end condominiums are experiencing annual growth rates of 6-8%, significantly outpacing the broader market. The ultra-luxury segment, particularly properties exceeding ¥100 million, has seen unprecedented demand with a 72% increase in new unit offerings compared to the previous year.
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| Property Segment | Price Growth Rate | Key Characteristics |
|---|---|---|
| Ultra-Luxury Condos (¥100M+) | 6-8% annually | 72% increase in new offerings, strong foreign demand |
| Luxury Properties (¥60M+) | 6-7% annually | Premium locations, high-net-worth buyers |
| Existing Condominiums | 7.8% YoY | Strong demand, limited supply in established areas |
| New Condominiums | -3.3% YoY | Slight correction after rapid increases |
| Detached Houses | 3.5% YoY | Growing appeal as condo alternative |
| Mixed-Use Developments | 5-6% expected | New trend combining residential and commercial |
| Service-Equipped Senior Housing | 4-5% growth | Rising demand from aging population |
Existing condominiums are the surprise performers, with their 7.8% annual growth reflecting intense competition for properties in established neighborhoods where new supply is extremely limited.
Detached houses, while showing more modest growth at 3.5%, are gaining popularity as buyers seek alternatives to increasingly expensive condominiums. The average price for newly built detached homes has reached ¥78.59 million ($534,000), attracting families looking for more space.
What was the average Tokyo property price in 2024 versus 2025?
Tokyo property prices have shown remarkable growth between 2024 and early 2025, with significant variations across property types.
In 2024, the average price for new condominiums in Tokyo's 23 wards was approximately ¥110 million ($730,000). By mid-2025, this figure has climbed to over ¥116 million ($820,000), representing a 5.5% increase in just six months.
The broader Tokyo residential property index rose from an 8.44% annual increase in 2024 to 10.7% year-on-year growth by January 2025. This acceleration indicates that the market momentum has actually strengthened rather than slowed.
For existing properties, the average price per square meter increased from approximately ¥760,000 in early 2024 to ¥819,000 by January 2025 – a gain of nearly ¥60,000 per square meter in just one year.
Luxury properties showed even more dramatic appreciation. Properties priced over ¥60 million that were forecast to grow 8% in 2024 are now experiencing 6-7% growth rates in 2025, though from a much higher base price.
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How do current mortgage rates affect Tokyo property prices?
Japan's ultra-low interest rate environment continues to fuel Tokyo's property price growth, with mortgage rates remaining near historic lows despite recent adjustments.
The Bank of Japan raised its policy rate to 0.25% in mid-2024, marking the highest level since 2008, with further increases to 0.75% expected by mid-2025. However, these rates remain extraordinarily low by global standards, keeping mortgage financing highly affordable.
Commercial real estate financing rates currently hover under 2%, allowing both domestic and international investors to maintain strong purchasing power. For residential buyers, typical mortgage rates range from 0.5% to 1.5% for variable rates, while fixed rates remain under 2% for most borrowers.
This cheap financing has enabled buyers to afford higher property prices, with many dual-income households ("power couples") able to secure mortgages for properties exceeding ¥100 million. Banks remain eager to lend, with loan-to-value ratios of up to 90% available for qualified buyers.
The impact is clear: even with the BOJ's gradual rate increases, the cost of borrowing remains so low that it continues to support strong demand and rising prices in the Tokyo property market.
What are the forecasts for Tokyo property prices in 2026?
Property prices in Tokyo are projected to continue rising through 2026, though at a more moderate pace than recent years.
Leading financial institutions, including Mitsubishi UFJ Trust and Banking, forecast annual price growth of 5-6% for 2025, down from the 8% surge recorded in 2024. This moderation reflects a maturing market rather than any fundamental weakness.
For 2026, analysts expect similar growth rates in the 5-6% range, supported by ongoing urban redevelopment projects, infrastructure improvements ahead of major events, and sustained demand from both domestic and international buyers.
Luxury properties are expected to maintain stronger growth trajectories, with forecasts suggesting 6-7% annual appreciation for properties priced above ¥60 million through 2026. Central ward locations will likely continue outperforming, driven by limited supply and persistent demand.
The rental market is also expected to remain robust, with yields stabilizing around 3-5% in central Tokyo. Rising rents – up 6.4% year-on-year in late 2024 – will provide additional support for property values, making real estate an attractive investment despite lower yields compared to other major cities.
Which areas of Tokyo offer the best value for property investment?
While central Tokyo commands premium prices, several emerging neighborhoods offer compelling value propositions for savvy investors.
Eastern wards like Koto, Sumida, and Adachi present opportunities with prices 40-60% lower than premium central locations while offering good transportation links and ongoing development. These areas are seeing increased interest from young professionals and families priced out of central wards.
Western Tokyo suburbs along major train lines – particularly areas served by the JR Chuo, Odakyu, and Keio lines – offer larger properties at more reasonable prices. Stations 20-30 minutes from Shinjuku or Shibuya provide excellent value with properties priced 30-50% below central Tokyo.
Emerging redevelopment zones deserve special attention. Areas around new station developments, planned infrastructure projects, or urban renewal initiatives often see accelerated price growth. The Shinagawa redevelopment area, benefiting from the upcoming Linear Chuo Shinkansen terminal, represents significant long-term potential.
For rental yield seekers, properties near universities or in areas popular with international residents – such as parts of Setagaya, Meguro, and Minato – offer better returns despite higher entry prices.
It's crucial to balance affordability with growth potential, focusing on areas with improving infrastructure, demographic trends favoring population growth, and proximity to employment centers.
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.
How does foreign investment impact Tokyo property prices?
Foreign investment has become a major driver of Tokyo's property price growth, particularly in the luxury segment.
The weak yen, hovering near multi-decade lows against major currencies, has made Tokyo real estate exceptionally attractive to international buyers. As of mid-2025, US$1 million buys approximately 64 square meters of prime Tokyo property – double what it would purchase in Singapore.
Investment in residential properties by foreign entities rose 18% year-on-year to ¥740 billion ($5 billion) in 2024. Singapore investors alone contributed nearly $3 billion, while buyers from Hong Kong, Korea, Taiwan, and mainland China have been increasingly active.
Foreign buyers now account for approximately 20% of luxury condominium purchases in central Tokyo, focusing particularly on properties priced above ¥100 million. This international demand has helped decouple Tokyo's property prices from local income levels, supporting continued price appreciation.
The Japanese government's relaxed visa policies and tax incentives for foreign investors have further fueled this trend. With no legal restrictions on foreign property ownership and attractive financing available, international investment is expected to remain a key market driver through 2026 and beyond.
What risks could cause Tokyo property prices to fall?
Several risk factors could potentially trigger a correction in Tokyo's property market, though none appear imminent.
Rising interest rates pose the most immediate concern. If the Bank of Japan accelerates rate hikes beyond market expectations, mortgage affordability could decline significantly. However, with rates expected to reach only 0.75% by mid-2025, this risk remains manageable.
Tokyo's property market scores high on global bubble risk indices, with price-to-income ratios reaching concerning levels. The average new condominium price of ¥116 million far exceeds typical household purchasing power, increasing reliance on foreign investment and wealthy buyers.
A sudden yen appreciation could dampen foreign demand by making Tokyo property more expensive for international buyers. Given that foreign investment has been a key growth driver, any significant currency strengthening could cool the market.
Japan's demographic challenges – an aging population and declining birthrate – pose longer-term risks. While central Tokyo continues attracting migrants, peripheral areas may face oversupply issues as vacant homes increase.
Global economic shocks, trade tensions, or geopolitical events could reduce investment flows and demand. The market's current momentum depends partly on continued economic stability and investor confidence.
How do Tokyo rental yields compare to property prices in 2025?
Tokyo's rental yields are declining as property prices outpace rental growth, creating a challenging environment for income-focused investors.
As of Q1 2025, gross rental yields in Tokyo's central districts average just 3.44%, ranging from 2.54% to 5.22% depending on location and property type. This represents a decline from previous years as property values have surged faster than rents.
While residential rents in Tokyo's 23 wards increased 6.4% year-on-year in late 2024 – a healthy growth rate by any measure – property prices rose even faster at 10.7%. This divergence means investors are paying more for each yen of rental income.
Interestingly, larger apartments tend to offer better yields than smaller units, contrary to trends in many global cities. This reflects strong demand from families and international executives for spacious accommodations.
Occupancy rates remain exceptionally high at 96.6% in the 23 wards, providing stable income despite lower yields. For comparison, cities like Osaka offer slightly better yields at 4.47%, while regional cities can provide 5-6% returns.
This trend suggests Tokyo property is increasingly viewed as a capital appreciation play rather than an income investment, similar to other major global cities.
What major developments are driving Tokyo property price increases?
Large-scale urban redevelopment projects are fundamentally reshaping Tokyo's property landscape and driving significant price appreciation.
It's something we explore in detail in our Japan property pack.
The shift toward mixed-use developments represents a major market trend. Projects combining residential, commercial, and green spaces are attracting premium prices, with new condominiums in these developments averaging ¥1.2 million per square meter.
Infrastructure improvements continue to enhance property values. The upcoming Linear Chuo Shinkansen terminal in Shinagawa is already driving price increases in surrounding areas. Major station renovations and new transportation links are creating value in previously overlooked neighborhoods.
Sustainability requirements are reshaping the market. From April 2025, all newly built homes must meet energy efficiency standards, with requirements tightening further by 2030. Properties meeting ZEH (Net Zero Energy House) standards command premium prices and attract government subsidies.
The Tokyo Bay area transformation, including the former Olympic facilities conversion and waterfront redevelopment, is creating entirely new residential districts. These areas offer modern infrastructure and lifestyle amenities that appeal to both domestic and international buyers.
Corporate campus redevelopments, like the Y640 billion project hosting 20,000 employees and 3,500 residents, exemplify the scale of transformation underway. These mega-projects are creating mini-cities within Tokyo, driving demand and prices in surrounding areas.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Yes, property prices in Tokyo are definitely going up, with the market showing strong momentum as we reach mid-2025. The 10.7% year-on-year increase in home prices, combined with robust demand and limited supply, indicates this trend will continue.
While some moderation in growth rates is expected – from 8% in 2024 to 5-6% projected for 2025-2026 – the fundamental drivers remain intact. Foreign investment, domestic demand from high-income households, major redevelopment projects, and ultra-low interest rates all support continued price appreciation. For investors and homebuyers, Tokyo's property market offers both opportunities and challenges, requiring careful consideration of location, property type, and long-term market dynamics.
Sources
- Japan Property Price Forecasts - Bamboo Routes
- Japan Residential Real Estate Market Analysis 2025 - Global Property Guide
- Tokyo Real Estate Prices Q1 2025 - Tokyo Portfolio
- Japan's 2025 Real Estate Market Trends - Tokyo Portfolio
- Tokyo's property boom looks built to last - Reuters
- Japan's Real Estate Market 2024-2025 - Nippon Tradings
- 2025 Japan Property Market Insights - E-Housing
- Tokyo Real Estate 2025 Market Predictions - PLAZA HOMES
- Residential Property Prices for Japan - Federal Reserve Economic Data
- 19 strong trends for 2025 in the Tokyo property market - Bamboo Routes