Is it worth it buying property in Tokyo in 2025?

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

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Tokyo. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At BambooRoutes, we explore the Japanese real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Tokyo, Osaka, and Kyoto. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

What kinds of properties are available to buy in Tokyo right now?

Tokyo's property market offers diverse options ranging from compact studios to luxury penthouses across the city's 23 special wards.

Apartment and condo units dominate the market, available as both new builds and resale properties targeting singles, couples, and families. These range from tiny 1R studios (around 20-25m²) to spacious 3LDK family units (70-100m²). Single-family houses are much rarer in central wards due to severe space constraints and high land values.

Luxury properties represent the fastest-growing segment, including penthouses, high-rise towers, and branded developments concentrated in premium wards like Minato, Chiyoda, and Shibuya. These properties often feature concierge services, rooftop gardens, and stunning city views. Townhouses and low-rise mansions can be found in quieter wards or near major train lines, offering more space for families.

An interesting option gaining attention is vacant "akiya" homes—older or abandoned properties mainly in suburban areas that come with government incentives for renovation and purchase.

It's something we develop in our Japan property pack.

Is it smarter to buy or rent if you plan to live in Tokyo?

The buy-versus-rent decision in Tokyo depends heavily on your timeline, financial situation, and lifestyle preferences.

Renting offers significant flexibility with far lower upfront costs—typically 4-5 months' rent including deposits and fees—making it ideal for those with uncertain plans or shorter stays. You can easily relocate if your job changes or if you want to explore different neighborhoods. However, you build no equity, and rents are rising steadily, especially in central areas where a studio can cost ¥120,000+ monthly.

Buying provides equity building and potential appreciation, particularly in central wards where property values have surged 64% since 2021. You gain complete control over your living space and can renovate as desired. The downside is substantial upfront costs (6-8% of property value in transaction fees) plus the purchase price itself, along with a long-term commitment that can be costly to exit.

For stays under 5 years or uncertain plans, renting is generally smarter. For long-term residents (5+ years) with stable finances and clear location preferences, buying often pays off—especially in prime areas experiencing the current price boom.

How much did property in Tokyo cost before, what are prices now, and what's the forecast for the next few years?

Tokyo property prices have experienced dramatic growth since 2021, with central ward condos reaching historic highs.

The price boom began in 2021 with 11.5% year-over-year growth, followed by 7.3% in 2022 and 8.4% in 2023 when central Tokyo condos first averaged over ¥100 million. As of September 2025, new central Tokyo condos average around ¥105 million, while used condos average approximately ¥44.5 million. This represents an extraordinary 64% price surge in prime wards since 2021—among the strongest performance globally.

The forecast for 2025-2029 projects more moderate but steady growth of 5-6% annually for central condo prices. Luxury properties and emerging wards may see slightly higher appreciation. Several factors could moderate this growth, including yen strengthening, rising interest rates, or cooling foreign investment demand.

Regional variations are significant—while central wards command premium prices, outer wards like Adachi or Nerima offer properties at ¥500,000-750,000 per square meter compared to ¥1.5-2.5 million in Chiyoda or Minato.

What are the main real estate market trends in Tokyo for 2025?

Several key trends are shaping Tokyo's property landscape in 2025, driven by both domestic and international factors.

The luxury "mansion" segment continues booming, with trophy properties seeing unprecedented demand from wealthy domestic buyers and foreign investors. Urban redevelopment projects, including new train lines and mixed-use complexes, are pushing previously overlooked neighborhoods upward in value and desirability.

Short-term rental hybrids combining traditional leasing with Airbnb-style services are gaining traction, especially near major tourist destinations in Shinjuku, Shibuya, and Minato wards. This trend reflects Tokyo's growing appeal as an international destination and the desire for flexible accommodation options.

However, challenges are emerging including rising construction costs that limit new supply, potentially higher mortgage rates as global interest rates normalize, and growing political pressure regarding foreign investment concentration in certain neighborhoods. These factors contribute to a more complex market environment than the straightforward growth seen in recent years.

How does the buying process in Tokyo work step by step?

The Tokyo property buying process follows a structured approach that typically takes 2-4 months from start to finish.

1. **Define your goals and budget**: Determine whether you're buying for personal use, investment, or vacation purposes, and establish a realistic budget including transaction costs.2. **Engage a bilingual real estate agent**: This is vital for foreigners, as all agents access the same national database but local expertise and language support are crucial for smooth transactions.3. **View properties and conduct due diligence**: Visit properties matching your criteria and request detailed reports on building management, structural condition, and legal status.4. **Submit a Letter of Intent**: Reserve your chosen property while securing financing and performing final checks—this typically requires a small deposit and gives you exclusive negotiation rights.5. **Negotiate and sign the Contract of Sale (Keiyaku-sho)**: Pay around 10% deposit and finalize all terms, conditions, and completion timeline.6. **Complete payment and register ownership**: Finalize remaining payment, register ownership at the Legal Affairs Bureau, receive title documents, and pay applicable taxes and fees.

Budget an additional 6-8% of the property value for transaction costs including agent fees, taxes, legal registration, and other administrative expenses.

Where can you actually find properties—are there trusted real estate agencies or platforms to go through?

Tokyo's property market is well-served by both traditional agencies and modern online platforms, with several trusted options for international buyers.

Established agencies include Japan-Property, Sumitomo Real Estate Sales, Mitsui Fudosan Realty, and Blackship Realty (which specializes in luxury properties). These agencies provide bilingual support and deep market access, essential for navigating Japan's complex property regulations and procedures.

Online platforms like RealEstate.co.jp, Suumo, and Homes.co.jp offer comprehensive property databases with English interfaces and filtering options. These platforms allow you to browse available properties, compare prices, and contact agents directly.

All legitimate agencies access the same national property database, so the key differentiator is service quality, language support, and expertise with foreign buyers. Choose agencies with proven track records working with international clients and strong aftercare support for post-purchase matters.

It's something we develop in our Japan property pack.

Which kinds of properties can you realistically get for different budget levels?

Property Type	Central Wards	Outer Wards	Example Areas
Studio (1R, 20-25m²)	¥25-30 million	¥15-20 million	Shibuya/Chiyoda vs Adachi/Itabashi
1LDK (30-50m²)	¥40-60 million	¥25-35 million	Minato vs Nerima/Sumida
2LDK (50-70m²)	¥70-100 million	¥40-60 million	Minato/Shibuya vs Adachi
3+ bedrooms (70m²+)	¥120+ million	¥70+ million	Chiyoda/Minato vs Itabashi/Nerima
Luxury penthouses	¥200+ million	¥150+ million	Premium towers in Roppongi/Shibuya
Single-family homes	¥150+ million	¥80-120 million	Rare in central, more common outer wards
Akiya renovation projects	¥30-50 million	¥10-30 million	Suburban areas with incentives

What are the biggest mistakes to avoid when buying property in Tokyo?

Several critical pitfalls can cost buyers significant money and cause long-term problems in Tokyo's complex property market.

Structural and safety oversights top the list—failing to inspect for earthquake compliance (buildings should meet post-1981 standards) or hidden structural issues can be catastrophic. Always verify that properties meet current seismic safety requirements and conduct thorough inspections before purchase.

Financial mismanagement includes not properly checking building reserve funds and management quality in apartment complexes, which affects ongoing costs and property values. Additionally, many buyers underestimate total transaction costs, forgetting to budget for the 6-8% in fees, taxes, and legal expenses on top of the purchase price.

Location errors involve buying in hazard-prone areas without researching flood risks, earthquake zones, or neighborhood development plans that could affect long-term value. Some buyers also overpay for properties lacking liquidity or rental demand, particularly in areas with declining populations or poor transport links.

Service-related mistakes include assuming all agencies offer equal support—choose experienced agents familiar with foreign buyer needs, as post-purchase support varies dramatically between agencies.

What's the cost of living in Tokyo and how does it affect your decision to buy?

Tokyo's cost of living significantly impacts the buy-versus-rent calculation, with housing representing the largest expense category.

A single person typically needs ¥145,000-¥444,000 monthly for living expenses including rent in less central wards, while families of four require ¥530,000-¥709,000 monthly. Central Tokyo studio apartments rent for around ¥120,000 monthly, while family-sized units in desirable locations cost ¥250,000-¥300,000 monthly.

Food, transportation, utilities, insurance, and education add substantially to these base costs. International schools can cost ¥1-3 million annually, while quality Japanese education remains relatively affordable. Healthcare costs are reasonable due to universal coverage, but premium services and international hospitals command higher fees.

These high living costs make the buy-versus-rent decision more complex. If monthly ownership costs (mortgage, management fees, taxes) approach rental costs for similar properties, buying becomes more attractive for long-term residents. However, the high upfront costs mean you need substantial liquid capital beyond your living expenses to make buying feasible.

Which neighborhoods are the best options—affordable areas, upcoming hotspots, or established upscale districts—and what are the strengths and weaknesses of each?

Area Type	Examples	Average Price/m²	Strengths	Weaknesses
Most Expensive	Chiyoda, Minato	¥2-2.5M	Prestige, business centers, expat-friendly	Extremely high prices, congested
Upscale & Lively	Shibuya, Shinjuku	¥1.5M	Nightlife, shopping, excellent transit	Noisy, dense, tourist crowds
Affordable	Adachi, Nerima	¥500-650K	Family-friendly, green spaces, value	Longer commutes, older housing stock
Up-and-coming	Itabashi, Sumida	¥600-750K	Growth potential, newer developments	Still developing, fewer amenities
Trendy Hotspots	Nakano, Koenji	¥800-850K	Creative culture, young demographics	Niche appeal, less polished
Development Zones	Around Tokyo Skytree	¥750K	Major attractions, rising popularity	Commute times, limited luxury options
International Focus	Meguro, Setagaya	¥1-1.2M	International schools, expat services	Premium pricing for international appeal

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.

What is life like in Tokyo as an expat and how does that impact whether you should buy or not?

Tokyo offers excellent quality of life for expats, but visa and work situation uncertainties often influence property purchase decisions.

The city provides world-class infrastructure, safety, healthcare, and cultural experiences that many expats find superior to their home countries. International communities are well-established, particularly in areas like Minato, Meguro, and Shibuya, offering English-language services, international schools, and expat social networks.

However, many expats initially rent for flexibility due to visa uncertainties, job mobility, or unfamiliarity with neighborhoods. Work visas can change, companies may relocate employees, and personal circumstances evolve, making long-term commitments challenging early in an expat journey.

For stable, long-term expats—those with permanent residency, established businesses, or family ties—buying becomes more realistic and attractive. These buyers often value international neighborhoods for language support, school options, and community connections, though these areas command premium prices.

The buying process is accessible to foreigners without special restrictions, making Tokyo one of the more foreigner-friendly Asian property markets for those ready to commit long-term.

If you rent out the property long term, which areas make sense, what kinds of tenants you'd attract, what rental income and yield you can expect, and how does that compare with short-term rentals?

Tokyo's rental market offers steady returns but modest yields compared to other Japanese cities, with significant differences between long-term and short-term strategies.

Long-term rental yields average 2.5-5.2% in central Tokyo (around 3.4% typically), which is lower than regional cities due to high property prices. The most popular areas for long-term rentals include Minato, Shibuya, and Shinjuku, attracting expats, young professionals, and affluent local renters. These tenants value proximity to business districts, international amenities, and transport links.

Properties in these areas typically attract stable, long-term tenants willing to pay premium rents for convenience and location. A ¥40 million 1LDK in Minato might rent for ¥200,000-250,000 monthly, generating a gross yield around 6-7.5% before expenses.

Short-term rentals (Airbnb-style) can be more profitable in tourist-heavy areas like Shinjuku, Shibuya, and Minato, with average occupancy rates of 77-81%. However, regulations limit annual occupancy to 180 days in many areas, and the high property price-to-income ratio means net yields remain moderate. Short-term rentals require more active management but can generate higher gross income during peak seasons.

It's something we develop in our Japan property pack.

So overall, is it really worth buying property in Tokyo in 2025—for living, for renting out, or for buying and reselling later at a higher price?

Tokyo property investment in 2025 offers different value propositions depending on your primary objective and timeline.

For personal living, buying makes sense if you're planning to stay 5+ years and value stability over flexibility. The market favors buyers seeking quality of life in a world-class city rather than maximum financial returns. Prime neighborhoods continue appreciating, and owning provides security and customization options that renting cannot match.

For rental income, Tokyo delivers steady but modest returns. Cash yields in central areas are low (2.5-5.2%) but stable, with consistent tenant demand. Higher rental yields are available in cities like Osaka, Fukuoka, or Sapporo, but Tokyo offers unmatched liquidity and demand stability. Consider Tokyo for capital preservation with income, not high-yield investments.

For capital appreciation, prices in prime wards have already surged 64% since 2021, though moderate growth (5-6% annually) is still projected. Opportunities exist in emerging neighborhoods, renovation projects, or akiya properties with development potential. However, entry costs are high, and timing the market is challenging.

Bottom line: Tokyo remains attractive for capital preservation and moderate upside, favoring buyers with long time horizons and substantial capital. For flexibility or high yields, consider renting or alternative markets. The city delivers global city benefits—stability, liquidity, and lifestyle—rather than spectacular returns.

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.

Sources

1. Japan Property Central - Tokyo Market Analysis
2. Tokyo Luxury Towers - Foreign Buyers Guide
3. BambooRoutes - Average Apartment Price Tokyo
4. Tokyo Portfolio - Market Trends
5. BambooRoutes - Japan Property Guide
6. E-Housing - Rent vs Buy Guide
7. Global Property Guide - Japan Price History
8. CNBC - Tokyo Property Price Surge
9. Dovetail - Home Buying Guide
10. Matcha - Real Estate Agencies Guide