Is Tokyo becoming unaffordable for locals?

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What does “Tokyo is unaffordable” actually mean for locals today?

Tokyo is already becoming unaffordable for ordinary local households that want to buy a decent-sized home in the 23 wards, although renting or moving farther out still gives many people a way to stay in the wider city.

Someone trying to buy a new 70-square-meter condo in central Tokyo faces a completely different market from a single renter looking for a small apartment in Katsushika, or a family willing to buy a house in Saitama.

The pressure is strongest in ownership. New condominiums in the 23 wards averaged ¥142.49 million in the first half of 2026, according to the Real Estate Economic Institute. Family-sized used apartments have also become extremely expensive. Tokyo Kantei's standardized 70-square-meter resale price reached ¥127.24 million in its latest reading.

Renters still have many more options, particularly outside the most expensive wards, but rents have started climbing much faster as well.

So the useful test is whether an ordinary Tokyo household can still find housing without making increasingly large compromises on location, size, age or tenure. On that test, affordability has clearly deteriorated.

Have Tokyo home prices really risen much faster than local incomes?

Yes. Tokyo home prices have left local wage growth far behind, and the gap is now too large to explain away as a normal expensive-city premium.

Tokyo Kantei's latest complete price-to-income study put the average new condominium in Tokyo at 17.00 times average annual income using 2024 data. The calculation used a standardized 70㎡ apartment price of ¥108.15 million and average income of ¥6.36 million.

Prices kept rising after that study. The average new condominium in the 23 wards reached ¥136.1 million in 2025 and then ¥142.49 million in the first half of 2026.

Wages are rising too, but nowhere near that quickly. The Tokyo Metropolitan Government's final 2026 spring wage survey found an average negotiated increase of 4.82%.

A wage rise approaching 5% is unusually strong by recent Japanese standards. It still cannot keep up with housing that rose 21.8% in the 23-ward new-condo market during 2025 and another 9.1% year on year in the first half of 2026.

Even giving households the benefit of strong wage growth, the direction is clear: housing affordability is still getting worse faster than salaries are improving.

Measure	Earlier benchmark	Latest useful reading	What changed
Tokyo new-condo price-to-income ratio	17.00x	Higher now after further price gains	Affordability worsened
Tokyo 23-ward average new condo	¥136.1m in 2025	¥142.49m in H1 2026	+9.1% YoY
Tokyo negotiated wage increase	—	+4.82%	Strong, but much slower
New-condo price increase in 2025	—	+21.8%	Far above wages

Are Tokyo's crazy condo prices mostly a luxury-market illusion?

Luxury projects exaggerate Tokyo's headline condo prices, but they cannot explain away the broader affordability problem.

The distortion can be huge in individual months. In July 2026, the average new condominium in the 23 wards jumped to roughly ¥265 million as several extremely expensive projects hit the market. Some Minato developments were selling units at averages around ¥500 million.

Clearly, the typical Tokyo household did not suddenly start shopping for ¥265 million apartments.

The annual numbers are more useful. The 23-ward average was already ¥136.1 million in 2025, up 21.8%, while the six central wards averaged about ¥195 million. During the first half of 2026, the broader 23-ward average reached ¥142.49 million.

The product mix has changed too. According to the Real Estate Economic Institute, Greater Tokyo sold 5,669 new condominiums priced at ¥100 million or more in 2025, up by 2,021 units in one year. Those high-end properties represented roughly one-quarter of all new supply.

Back in 2010, only around 760 new Greater Tokyo condos crossed ¥100 million, roughly 2% of supply.

That is a major structural shift. New construction increasingly targets buyers with much higher incomes or wealth, so the headline average is partly inflated by luxury development while also revealing something real: developers are building fewer homes for normal middle-income buyers.

Can Tokyo locals just buy a used condo instead?

Used Tokyo condos are cheaper than new ones in many neighborhoods, but the resale market is no longer an easy affordability escape for families.

Tokyo Kantei's latest standardized price for a 70-square-meter used condominium in the 23 wards is ¥127.24 million. That came after roughly two years of almost uninterrupted monthly increases.

A ¥127 million resale apartment would equal nearly 16 years of gross income for a household earning ¥8 million annually. Even a ¥10 million household would be looking at almost 13 years of gross income before financing costs, taxes or everyday spending.

Actual transactions can be far cheaper because Tokyo has a huge stock of small and older apartments. Ministry of Land transaction records show condos selling for tens of millions of yen in outer wards such as Itabashi, Katsushika and Adachi.

That cheaper stock is important. It is also where the compromise becomes visible. A household can lower the price by buying an older building, taking less floor space, moving farther from a major station or going into a cheaper ward.

Used housing still keeps ownership possible for more locals than the new-build market does. It just does so under tighter conditions than a few years ago.

How expensive is a Tokyo mortgage right now?

Tokyo mortgage payments are getting harder to absorb because buyers now face record property prices alongside borrowing costs that have moved clearly above the ultra-cheap levels Japan became used to.

Mitsubishi UFJ Bank currently advertises a preferential variable mortgage rate of 1.195% for qualifying new borrowers. Its ten-year fixed rate is 3.63%. Flat 35's most common rate for a 21-to-35-year mortgage with a loan-to-value ratio of 90% or less is currently 3.46%.

Take the ¥127.24 million standardized resale condo mentioned above. With a 20% deposit, the buyer still needs a mortgage of roughly ¥101.8 million.

Over 35 years, that works out at approximately ¥297,000 a month at 1.195%. At 3.46%, the payment is about ¥418,000.

For a ¥142.49 million new condo with the same deposit, the mortgage reaches almost ¥114 million. Monthly repayments are around ¥332,000 at 1.195% or ¥468,000 at 3.46%.

Management fees, repair reserves, property tax and insurance come on top.

The financing environment therefore gives Tokyo buyers less protection from expensive property than it did when mortgage rates were closer to zero.

Property example	20% deposit	Mortgage	Monthly at 1.195%	Monthly at 3.46%
¥127.24m used condo	¥25.45m	¥101.79m	~¥297k	~¥418k
¥142.49m new condo	¥28.50m	¥113.99m	~¥332k	~¥468k

Are Tokyo rents becoming unaffordable too?

Tokyo rents are becoming noticeably harder to afford now, although renting remains far more accessible than buying for most local households.

Tokyo Kantei's 23-ward condominium rent series shows how quickly the market has changed. Average rent rose from ¥3,846 per square meter in 2022 to ¥4,152 in 2023 and ¥4,295 in 2024.

Then the pace accelerated. The 2025 average reached ¥4,723 per square meter, up about 10% in one year. The latest monthly figure has climbed again to ¥5,157.

That latest level is roughly 34% above the 2022 average.

A 50-square-meter condominium at ¥5,157 per square meter would imply roughly ¥258,000 in monthly rent. That is not a representative rent for every Tokyo resident because Tokyo Kantei's series covers condominium units and the age and location mix changes over time, but the trajectory is hard to ignore.

The cheaper wards still look very different. Recent listing-market data put many 1LDK apartments in places such as Adachi, Katsushika and Itabashi around the ¥100,000-to-¥135,000 range.

For now, that gap keeps Tokyo workable for many renters. The concern is that the inflation is spreading outward rather than staying confined to premium central neighborhoods.

Tokyo 23-ward condominium rent	Average rent per m²	Change
2022	¥3,846	—
2023	¥4,152	+8.0%
2024	¥4,295	+3.4%
2025	¥4,723	+10.0%
Latest monthly reading	¥5,157	New recent high

Are Tokyo families getting priced out faster than single renters?

Yes. Tokyo's affordability squeeze hits families much harder because needing two or three bedrooms removes the easiest ways to keep housing costs low.

A single person can live in a 20-to-30-square-meter studio, choose a 1K apartment or move between neighborhoods relatively easily. Families normally need more bedrooms, storage and access to schools or childcare, which pushes them toward larger units.

Recent rental listings show the difference. In some cheaper outer wards, a 1LDK can still be found around ¥100,000 to ¥130,000 a month. A 3LDK in the same broad areas often moves into the ¥150,000-to-¥180,000 range.

Central Tokyo is on another scale. Family-sized units can exceed ¥300,000 a month in wards such as Bunkyo, Shinjuku and Chuo, while Minato can go far above ¥500,000 depending on the building.

Buying creates an even bigger problem because the 60-to-70-square-meter segment is precisely where resale prices have become so stretched.

This is why Tokyo can still feel affordable to a young professional renting a compact apartment while looking completely unaffordable to a couple planning for children. Both impressions can be true at the same time.

Are Tokyo's cheaper outer wards still genuinely affordable?

Tokyo's outer wards still provide real savings, but they are becoming the fallback option for households priced out of more central areas.

The difference across the 23 wards remains enormous. Ministry of Land transaction records contain many condominiums around the ¥30 million level in places such as Itabashi, Katsushika, Adachi and Nerima, while transactions in Minato routinely reach several times that amount.

Rents show the same geography. A 1LDK around Adachi or Katsushika can still hover near ¥100,000 to ¥110,000 in listing-market data, while comparable units in the central wards can cost twice as much or more.

The problem lately is that cheap wards are also recording some of the fastest rent increases. Nomura Real Estate Solutions found single-person rents rising 10.4% in Katsushika during 2025. Kita rose 7.8%, Itabashi 6.4% and Adachi 6.3%.

That pattern deserves more attention than another Minato luxury sale. When the districts people use to escape high prices start rising quickly themselves, the affordability boundary moves outward.

Tokyo still has cheaper wards today. They are simply becoming less cheap.

Does moving outside Tokyo's 23 wards still solve the problem?

For many households, yes. Moving into western Tokyo, Saitama, Chiba or Kanagawa remains the strongest reason we cannot say the whole Tokyo metropolitan area has become unaffordable.

Tokyo Kantei's latest standardized 70-square-meter resale price in the 23 wards is ¥127.24 million. Across Greater Tokyo, the same standardized measure is ¥75.47 million.

Crossing the 23-ward boundary therefore cuts more than ¥50 million from the benchmark before we even reach the cheaper parts of Saitama or Chiba.

Detached housing widens the choice further. Tokyo Kantei currently puts the average price of a small newly built detached house across Greater Tokyo at roughly ¥61.7 million. That is less than half the average new-condo price inside the 23 wards.

Those properties come with real trade-offs. A longer commute can consume hours every week, and families may have to change schools, childcare arrangements or social routines.

Tokyo's rail system still makes that compromise workable on a scale few global cities can match. Someone can live in Saitama, Chiba or Kanagawa and remain part of the same labor market.

This is increasingly how Tokyo preserves affordability: households stay connected to the city by giving up proximity to its center.

Housing option	Recent indicative price	Relative cost
New condo, Tokyo 23 wards	¥142.49m	Highest
70㎡ used condo, Tokyo 23 wards	¥127.24m	Very high
70㎡ used condo, Greater Tokyo	¥75.47m	Much lower
Small new detached house, Greater Tokyo	~¥61.7m	Lower again

Why are developers building so few affordable Tokyo condos?

Tokyo developers increasingly struggle to make ordinary new condos work financially, so scarce central sites are being used for more expensive projects.

Greater Tokyo received only 21,962 new condominiums in 2025, according to the Real Estate Economic Institute. That was the lowest annual supply since its records began in 1973.

The comparison with Tokyo's earlier housing market is striking. New supply exceeded 95,000 units in 2000. By 2025, it had fallen below 22,000, less than one-quarter of that level.

Fiscal-year data show the squeeze continuing, with only 21,659 units released in the year ending March 2026.

At the same time, land is expensive, construction wages have risen, materials cost more and builders face labor shortages. Developers cannot easily absorb those costs while selling ¥50 million family apartments on valuable Tokyo land.

The response is visible in what gets built. Supply is lower, ¥100 million-plus units are far more common, and high-margin central projects occupy a growing share of the market.

Tokyo is not simply short of new housing. It is especially short of new housing priced for ordinary local buyers.

Are foreign buyers and condo flippers pricing Tokyo locals out?

Foreign buyers and short-term investors are adding pressure to parts of Tokyo, especially expensive central condos, but they are too small a share of the overall market to explain the affordability crisis on their own.

The Ministry of Land carried out its first detailed investigation into overseas-address buyers and found that they represented 3.5% of new-condominium purchases in the 23 wards during the first half of 2025.

The rate reached 7.5% across the six central wards and rose to around 10% in some individual areas. That is large enough to matter in luxury projects where a relatively small number of high-value transactions can influence pricing.

Flipping is another factor. Government research has found unusually high short-term resale rates in some major central developments. One analysis put the rate above 12% in the central six wards and close to 20% in Shinjuku during one recent period.

Investor demand is real. It is just not big enough to carry the whole explanation.

More than 96% of 23-ward new-condominium purchases in the ministry's overseas-address measure came from domestic addresses. Meanwhile, construction costs have surged, new supply has collapsed to a record low and wealthier domestic households continue competing for scarce properties.

Foreign demand and flipping push an already expensive market higher, particularly at the top. Tokyo's affordability problem would still exist without them.

Are Tokyo wages finally rising enough to catch housing prices?

Tokyo wages are rising faster than they have in years, but locals are still losing ground against housing costs.

The Tokyo Metropolitan Government's final spring labor survey found negotiated wage increases averaging 4.82%. That is substantial in a country where stagnant wages were normal for decades.

We can already see why it is insufficient. New-condo prices in the 23 wards rose 21.8% during 2025. Condominium rents across the 23 wards rose roughly 10% that year. Used family-sized apartments also posted large double-digit annual gains during much of the recent run.

The gap compounds over time. If someone's salary rises 5% while the home they hoped to buy rises 15%, the following year's larger salary does not make them closer to the property. They have fallen farther behind in absolute yen.

Higher wages should make rent increases easier to absorb and improve mortgage eligibility for some dual-income households. They may also eventually help restore affordability if house prices flatten.

Currently, though, wage growth is slowing the damage rather than reversing it.

Is Tokyo housing finally starting to get cheaper?

Tokyo housing is showing its first credible signs of cooling, but prices have barely fallen compared with how far they climbed.

The latest resale data are worth watching closely. Tokyo Kantei's standardized 70-square-meter price in the 23 wards dropped 0.8% in June, ending a 26-month run without a monthly decline. It then slipped another 0.1% in July to ¥127.24 million.

Central Tokyo has weakened more clearly. Prices there have fallen for several consecutive months, the number of properties for sale has increased, and the share of sellers revising their asking prices has risen sharply.

That is a genuine change in market behavior. Buyers now have higher financing costs, while sellers are trying to hold onto valuations established during an extraordinary two-year surge.

Still, a ¥127 million apartment falling by less than 1% does almost nothing for an ordinary household.

A serious affordability recovery would require a much larger price decline, several years of flat housing prices while wages catch up, or both.

As seen above, wages are currently rising by close to 5%. If home prices genuinely stopped climbing for several years, that would finally start repairing the gap. We are nowhere near being able to say that has happened yet.

Is Tokyo becoming a city only rich locals can afford?

Tokyo is heading toward a two-tier housing market where wealth matters much more for ownership, while ordinary locals increasingly stay in the city by renting smaller homes or moving outward.

The clearest break has happened in new condominiums. With average 23-ward prices above ¥140 million, this is increasingly a product for affluent dual-income households, wealthy domestic buyers and investors rather than a normal route into homeownership.

Family-sized resale condos have followed much of that move. Renters have more room to adapt, although the recent acceleration in rents is reducing that advantage.

What keeps Tokyo from becoming a rich-only city is the depth of its housing stock. Smaller apartments, older buildings, peripheral wards, western Tokyo, detached houses and the surrounding prefectures create several lower-cost layers underneath the premium market.

But locals increasingly pay for affordability in another currency: space, building age or commuting time.

A household that once might have bought new in the 23 wards may now buy used. A household priced out of a used family condo may move farther east or north. Another may leave the 23 wards for Saitama or Chiba.

The city still gives people choices. The affordable choices are moving farther away from the housing many local families actually want.

So, is Tokyo becoming unaffordable for locals?

Yes. Tokyo is becoming unaffordable for a growing share of local households, and homeownership in the 23 wards has already moved beyond normal middle-income finances in much of the market.

The strongest evidence comes from several parts of the housing system moving together. New 23-ward condos now average more than ¥140 million. Standardized family-sized resale apartments cost around ¥127 million. Mortgage rates have risen. Rents are climbing much faster than they did a few years ago. Wage growth is strong by Japanese standards but still trails housing inflation.

There is also very little reason to expect cheap new supply to rescue buyers soon. Greater Tokyo built fewer than 22,000 new condos in 2025, the lowest annual total in more than half a century of records, while the number of ¥100 million-plus apartments jumped sharply.

Where we stop short is the claim that ordinary locals can no longer live anywhere in Tokyo. That would be exaggerated. Outer wards remain cheaper, older and smaller units provide another route, and the wider metropolitan area still offers a huge discount. Greater Tokyo's rail system makes those alternatives genuinely usable.

The direction, however, is hard to dispute.

Tokyo affordability increasingly works by asking locals to downgrade something: buy older, accept less space, rent instead of buy, leave the center, leave the 23 wards or commute farther.

As of now, those escape routes still work. If rent and resale inflation continue spreading through the outer wards and surrounding prefectures, Tokyo will cross a much more serious line.

For locals who want a normal family-sized home inside the 23 wards, much of that line has already been crossed.

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.