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SUMMARY
Yes. For buyers looking for ordinary new condos in Tokyo, especially inside the 23 wards, the shortage is already real.
The strongest evidence is not that Tokyo has stopped building. It is that the annual flow of new condos has collapsed from tens of thousands of units to roughly 8,000 a year inside the 23 wards.
The shortage is increasingly a price problem as much as a unit-count problem. New condos inside the wards now average well above ¥100 million, so the remaining supply is less useful to mainstream households than the headline numbers suggest.
Central Tokyo is taking the biggest hit. More development is shifting toward Kanagawa, Chiba and outer Tokyo, where land economics are easier and buyers can still be reached at lower price points.
The construction pipeline is weak but not dead. Starts rebounded sharply in the second quarter of 2026, yet the first half still came in roughly one-third below the comparable period a year earlier.
Tokyo can therefore have scarce new supply and rising unsold inventory at the same time. The market is short of new homes at prices many buyers can afford, while some expensive projects take longer to sell.
The resale market is doing much more of the work now. Secondhand transactions have exceeded new supply for years, and Greater Tokyo still has more than 47,000 secondhand condo listings available.
Large redevelopment projects can add thousands of homes, but they are too rare to restore the old market structure. Tokyo would need dozens of HARUMI FLAG-scale projects every year to get back anywhere near the supply volumes seen in the early 2000s.
Higher mortgage rates may slow price growth, but they do not solve the supply problem. If buyers cannot absorb today’s prices while land and construction costs stay high, developers may delay projects rather than build cheaper ones.
The practical conclusion is sharper than the literal one: Tokyo is not running out of apartments, but it is running low on the steady stream of reasonably accessible new condos that used to exist across the 23 wards.
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Is Tokyo running out of new condos?
Is Tokyo actually running out of new condos?
Tokyo has an unusually small flow of new condos today, especially inside the 23 wards, and calling the market scarce is now justified.
The Real Estate Economic Institute counted only 7,989 new condos released across Greater Tokyo in the first half of 2026. That was the fifth consecutive first-half decline. Tokyo's 23 wards contributed just 2,684 of those units, down 9.4% from a year earlier.
The annual numbers look even more striking. Greater Tokyo received 21,962 new condos in 2025, the lowest calendar-year total since the institute began tracking the market in 1973. Its latest 2026 outlook points to only around 22,000 units across Greater Tokyo, while the 23 wards are expected to stay around 8,000.
There will still be new towers to buy. The real scarcity is the number of new homes reaching the market every year.
| Measure | Latest reading | Comparison | What we learn |
|---|---|---|---|
| Greater Tokyo supply, H1 2026 | 7,989 units | -0.8% YoY | Supply remains near historic lows |
| Tokyo 23 wards, H1 2026 | 2,684 | -9.4% | Central Tokyo is getting tighter |
| Greater Tokyo supply, 2025 | 21,962 | -4.5% | Lowest calendar-year total since 1973 |
| Tokyo 23 wards forecast | ~8,000 | -5.9% | Little relief expected this year |
How extreme is Tokyo's condo shortage compared with the past?
Tokyo's new-condo market has shrunk to a fraction of the size that used to be normal.
The Real Estate Economic Institute recorded 39,147 new units in the 23 wards in 2004. Supply bounced back to 28,340 in 2013 after the global financial crisis, then resumed its long decline. By 2021, only 13,290 units were being released. In 2025, the figure reached 8,064.
From 2004 to 2025, annual new-condo supply inside the wards fell roughly 79%.
Even choosing less extreme comparison periods gives the same answer. One analysis of the institute's data puts average 23-ward supply at 19,482 units a year between 2007 and 2015, versus 12,372 between 2016 and 2025.
So today's shortage goes far beyond a weak year or two. Tokyo has spent more than a decade moving toward a much smaller new-build market.
| Year | Tokyo 23 wards supply | Change from 2004 |
|---|---|---|
| 2004 | 39,147 | — |
| 2013 | 28,340 | -28% |
| 2021 | 13,290 | -66% |
| 2025 | 8,064 | -79% |
| 2026 forecast | ~8,000 | ~-80% |
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Why are so few new condos being built in Tokyo now?
Tokyo developers are struggling to make ordinary condo projects work financially because land and construction have become expensive at the same time.
The land side is particularly clear. Tokyo Metropolitan Government data shows residential land prices across the 23 wards rising 9.0% in the latest annual assessment, faster than the 7.9% increase recorded one year earlier. Minato rose 16.6%, Taito 14.2% and Shinagawa 13.9%.
A developer then has to build on that increasingly expensive site. Labor shortages, higher material prices and longer construction schedules have raised the cost of turning land into finished apartments.
That combination changes which projects survive. A mediocre site with thin margins becomes easy to postpone. A premium tower in Minato, Shibuya or a major station redevelopment can absorb much higher costs because buyers there will pay far more.
The Real Estate Economic Institute itself points to difficulty securing development sites when explaining why 23-ward supply is expected to decline again.
Tokyo still has places where housing can be built. Finding sites where a for-sale condo project makes financial sense has become much harder.
Are fewer Tokyo condos actually starting construction?
Yes. Tokyo's future condo pipeline is thinner than it was a year ago, even after a sharp improvement during the spring.
Tokyo Metropolitan Government data shows only 4,230 condominium housing starts in the first quarter of 2026, a 59.5% year-on-year collapse.
Then the picture changed. Second-quarter starts jumped 50.9% to 4,529 units as April, May and June all recorded year-on-year increases.
Combining the two quarters gives 8,759 starts during the first half. Based on the government's year-on-year figures, the comparable first half of 2025 was around 13,450. We therefore get a decline of roughly 35%.
That is much more useful than looking at either quarter alone. The terrible first quarter exaggerated the deterioration, while the strong second quarter can make the recovery look bigger than it really is. Six months of data still shows a much smaller pipeline.
The longer view points the same way. Tokyo recorded 18,019 condominium starts during fiscal 2025, down 39.2% from the previous fiscal year.
| Tokyo condominium starts | Units | YoY |
|---|---|---|
| Q1 2026 | 4,230 | -59.5% |
| Q2 2026 | 4,529 | +50.9% |
| H1 2026 | 8,759 | about -35% |
| FY2025 | 18,019 | -39.2% |
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Is central Tokyo losing more new condos than the suburbs?
Central Tokyo is where the supply squeeze is strongest, and more new development is already spilling into cheaper parts of Greater Tokyo.
Only 33.6% of Greater Tokyo's first-half 2026 new-condo supply came from the 23 wards. Kanagawa supplied 2,132 units, almost 27% of the total, while Chiba contributed another 1,302.
This fits the Real Estate Economic Institute's forecast for the full year. It expects most of the Greater Tokyo increase to come from large projects outside the 23 wards and in Chiba.
Developers have an obvious reason to move outward. The first-half average new-condo price reached ¥142.49 million inside the wards. Outside the wards in Tokyo it was ¥75.50 million. Kanagawa averaged ¥83.46 million.
The gap gives developers far more room to target households that have already been priced out of central Tokyo.
The catch is that suburban projects are getting expensive too. The shift is pushing the affordability boundary farther away from central Tokyo instead of producing a new pool of genuinely cheap homes.
| Area | H1 2026 supply | Average new-condo price |
|---|---|---|
| Tokyo 23 wards | 2,684 | ¥142.49m |
| Tokyo outside 23 wards | 1,032 | ¥75.50m |
| Kanagawa | 2,132 | ¥83.46m |
| Saitama | 839 | ¥64.69m |
| Chiba | 1,302 | ¥89.97m |
Are Tokyo's remaining new condos becoming luxury products?
Tokyo's new-build market is moving rapidly upmarket, and the change is large enough to alter what "new condo" means for an ordinary buyer.
The average new-condo price in the 23 wards reached ¥136.1 million in 2025, according to the Real Estate Economic Institute. During the first half of 2026 it rose again to ¥142.49 million.
Across Greater Tokyo, the half-year average crossed ¥100 million for the first time.
One revealing number is the growth of ¥100 million-plus units. There were 5,669 of them in 2025, up by 2,021 in a single year. Those apartments accounted for roughly one-quarter of all Greater Tokyo launches.
The monthly averages can get absurd when a handful of luxury buildings launch, so we should not treat every headline average as the price of a normal family apartment. But the broader movement survives that adjustment. Fewer units are being built, and a larger share of what remains sits at the expensive end of the market.
For many households, the practical shortage is therefore much worse than the headline supply number suggests.
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If Tokyo has unsold new condos, how can supply be scarce?
Tokyo currently has both scarce new supply and rising unsold inventory because many of the condos being offered are simply too expensive for a large part of the buyer pool.
At the end of June, the Real Estate Economic Institute counted 6,389 unsold new condos across Greater Tokyo, 363 more than a year earlier.
The first-month contract rate was only 64.8%. Inside the 23 wards it reached 63.9%, almost five percentage points lower than a year earlier.
Those figures are important because supply itself remains historically low. If buyers were desperate for every available new unit regardless of price, such limited supply should clear rapidly.
Instead, prices are testing the limits of affordability. Greater Tokyo's first-half average new-condo price climbed 13.1% while the first-month contract rate declined.
Scarcity does not guarantee easy sales. Tokyo has too few new condos at the prices many buyers want and a growing number of expensive units that take longer to move.
| H1 2026 indicator | Reading | YoY movement |
|---|---|---|
| Greater Tokyo supply | 7,989 units | -0.8% |
| Average price | ¥101.35m | +13.1% |
| First-month contract rate | 64.8% | -1.8 pts |
| 23-ward contract rate | 63.9% | -4.9 pts |
| Unsold inventory at June-end | 6,389 | +363 units |
Are affordable new condos disappearing from Tokyo?
Yes. Affordable new condos are disappearing faster than new condos overall, and that is the part of the shortage most buyers actually feel.
A ¥142 million average inside the wards already puts new construction far beyond what a typical household can finance comfortably. Even buyers with substantial incomes are increasingly forced to choose between smaller homes, outer locations and older buildings.
The gap with resale housing shows how far the new-build market has moved. Recent REINS data puts secondhand condo prices in the 23 wards at roughly ¥1.36 million per square metre. The first-half new-build figure was around ¥2.23 million.
That leaves new condos roughly 64% more expensive per square metre.
The comparison is imperfect because new and secondhand homes differ in location, age and quality. Even so, a premium that large changes buyer behavior.
A household looking for 70 square metres in Tokyo can often save tens of millions of yen by buying an older apartment. As that gap widens, "I cannot find a new condo I can afford" becomes much more common than "I cannot find a condo."
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Are Tokyo buyers switching from new condos to secondhand ones?
Tokyo buyers increasingly rely on secondhand condos, and the resale market has become the main escape route from the shortage of affordable new construction.
The crossover happened years ago. In 2016, Greater Tokyo recorded 37,189 secondhand condominium transactions, slightly more than the 36,960 new units supplied. Since 2019, resale transactions have consistently exceeded new supply.
The latest market still offers plenty of choice. REINS recorded 47,151 unsold secondhand condo listings across Greater Tokyo in July 2026.
That inventory is more than twice an entire year's current new-condo supply.
Secondhand housing has its own affordability problem because prices have risen strongly there as well. July resale transactions fell 8.6% year on year, while listings rose 5.5%, suggesting buyers are becoming more selective.
Still, the scale difference is huge. Tokyo can lose thousands of annual new launches without leaving buyers literally unable to purchase a condo because the resale market now does much more of the work.
Can Tokyo's giant redevelopment projects fix the shortage?
Tokyo's giant redevelopment projects will keep adding impressive numbers of apartments, though there are too few sites of that scale to rebuild the mass-market supply of the past.
HARUMI FLAG shows what happens when Tokyo gets an exceptional piece of land. The former Olympic Village contains 5,632 planned homes, including 4,145 for-sale units and 1,487 rentals. The SKY DUO towers alone contain 1,455 apartments.
Normal redevelopment is much smaller. Grand City Tower Ikebukuro has 878 units. Park City Koiwa has 731. Grand City Tower Nakano is planned with 510.
Those are big buildings, yet the historical comparison is brutal. Tokyo's 23 wards released nearly 40,000 new condos in 2004. Recreating that amount would require dozens of projects on the scale of today's biggest towers every year.
Today's supply is also more dependent on exactly when a handful of large schemes launch. That makes monthly and even annual numbers jump around far more than they used to.
Tokyo can still produce spectacular new residential projects. There simply are not enough HARUMI FLAG-sized sites to bring the old volume back.
| Project | Location | Homes |
|---|---|---|
| HARUMI FLAG | Chuo | 5,632 |
| Grand City Tower Ikebukuro | Toshima | 878 |
| Park City Koiwa | Edogawa | 731 |
| Grand City Tower Nakano | Nakano | 510 |
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Will higher mortgage rates free up more Tokyo condos?
Higher mortgage rates can slow demand for Tokyo condos, although they do little to solve the supply problem itself.
The most common Flat 35 rate for 21-to-35-year mortgages reached 3.21% in mid-2026. Two years earlier, it was around 1.85%.
That difference is large for someone already facing a ¥100 million-plus purchase. Higher monthly payments shrink the number of households able to follow prices upward.
We can already see some resistance in the weak contract rates and higher unsold inventory discussed above.
Developers face a different problem. Softer buyer demand does not automatically lower the price of land already purchased or construction contracts already signed. If a project no longer works at the selling price buyers can afford, the developer can delay it rather than build more cheaply.
So rising rates could cool Tokyo condo prices. They could also cause marginal projects to disappear from the pipeline.
Will Japan's shrinking population eventually end Tokyo's condo shortage?
Japan's shrinking population will eventually put a ceiling on Tokyo housing demand, but it has not produced an excess of new condos in the capital today.
Tokyo continues to pull people, jobs, corporate activity and higher-income households toward the metropolitan area. Housing demand also depends on the number of households, so smaller household sizes can keep demand firm even when population growth weakens.
The bigger immediate constraint is affordability.
New condos inside the wards now cost more than ¥140 million on average, mortgage rates have risen, and even suburban prices are climbing. Those forces can reduce demand much faster than national population decline.
Over a longer horizon, demographics absolutely matter. Developers cannot assume that every expensive tower will find unlimited buyers forever.
For now, though, Japan's demographic decline has failed to create anything resembling a new-condo glut in Tokyo.
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Is Tokyo's new-condo shortage about to ease?
A meaningful recovery in Tokyo new-condo supply looks unlikely for now, although the rebound in construction starts means the market is no longer deteriorating in a straight line.
There are some better numbers. Second-quarter Tokyo condominium starts rose 50.9% from a weak year-earlier period, and the latest Greater Tokyo full-year outlook points to around 22,000 launches, essentially flat versus 2025.
Those are real improvements.
They remain small relative to the structural decline. The 23 wards are still expected to receive only around 8,000 new condos this year. Land prices continue rising quickly. Development sites remain difficult to secure. Construction remains expensive. First-half starts still trailed the previous year heavily after the awful first quarter.
A genuine supply recovery would look different. We would want to see several years of rising starts, a sustained return toward perhaps 15,000 or 20,000 annual units inside the wards, and a broader range of mid-market projects rather than occasional jumps from a few giant towers.
We are nowhere near that yet.
So, is Tokyo running out of new condos?
Yes, in the sense that matters to buyers: Tokyo is running dangerously low on the steady flow of ordinary new condos that used to make up a much larger part of the housing market.
As seen above, 23-ward supply has fallen from 39,147 units in 2004 to just 8,064 in 2025. The current forecast stays around 8,000. New construction has weakened sharply, central land prices are still rising, and the new homes that do reach the market increasingly cost well above ¥100 million.
Calling this a literal shortage of apartments would go too far. Tokyo still has major redevelopment projects, thousands of unsold new units and a resale market with more than 47,000 listings across Greater Tokyo.
For someone specifically searching for a new condo in a desirable part of Tokyo at a remotely mainstream price, however, the shortage is already here.
That is the clearest way to read today's market. Tokyo can keep building new condos for decades, but the era when developers could routinely deliver tens of thousands of reasonably accessible new units across the 23 wards looks finished.
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OUR METHODOLOGY
"Is Tokyo running out of new condos?" does not have a useful one-number answer. We broke the question into separate dimensions: current new-condo supply, the long-run decline in launches, construction starts, land and building costs, the shift toward outer Greater Tokyo, price and contract-rate pressure, the resale market, redevelopment capacity, mortgage rates and demographics.
For fast-moving indicators, we prioritized recent 2026 data. We used longer historical series only where they helped distinguish a structural change from an unusually weak quarter or year, and we combined volatile short-term data when a wider window gave a clearer reading.
We also separated the Tokyo 23 wards from Greater Tokyo whenever that distinction changed the answer. That matters here because central Tokyo is experiencing a much tighter supply squeeze than the wider metropolitan market, while more development is shifting toward Kanagawa, Chiba and outer Tokyo.
Price data was treated carefully because a few luxury launches can distort monthly and half-year averages. We therefore used per-square-metre and median measures as cross-checks where available, and compared new-build pricing with the secondhand market to see whether the practical shortage was really about unit availability, affordability, or both.
No single indicator determined the conclusion. We looked for convergence across supply, starts, land economics, pricing, contract rates, unsold inventory, resale availability and redevelopment scale. Apparent contradictions, such as scarce new supply existing alongside rising unsold inventory, were treated as part of the market rather than smoothed away.
Key sources include the Real Estate Economic Institute's H1 2026 Greater Tokyo new-condo release, its full-year 2025 market report, its long-run Greater Tokyo historical series, its 2026 market forecast, Tokyo Metropolitan Government land-price data, Tokyo's Q1 2026 housing-start statistics, Tokyo's Q2 2026 housing-start statistics, East Japan REINS resale-market data, Japan Housing Finance Agency Flat 35 rates, and official project materials for HARUMI FLAG, Grand City Tower Ikebukuro, Park City Koiwa and Grand City Tower Nakano.
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