Buying property in Tokyo: is it worth it?

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.

What are the current average property prices in Tokyo by area and property type?

Tokyo property prices vary dramatically depending on location and property type, with central areas commanding premium rates.

Central Tokyo's 23 special wards average ¥91.4 million for a standard 70m² apartment as of September 2025. Premium locations in top districts like Minato, Shibuya, and Chiyoda exceed ¥120 million for similar-sized units.

New condominium prices in central Tokyo average ¥1.116 million per square meter, significantly higher than existing condos at ¥819,000 per square meter. The price gap reflects the premium buyers pay for modern amenities, energy efficiency, and updated building codes in newly constructed properties.

Prime land values reach extraordinary levels, with areas like Akasaka commanding over ¥5.9 million per square meter. These land prices directly impact the cost of new developments and help explain why central Tokyo properties carry such high price tags.

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

How have property prices in Tokyo changed in the past 5, 10, and 20 years?

Tokyo's property market has experienced remarkable growth, particularly accelerating in recent years.

Between 2021 and 2025, condominium prices in Tokyo's 23 wards surged by 64%, far outpacing the 26% increase seen in the broader metropolitan area. This dramatic rise reflects concentrated demand for central urban properties and limited supply in prime locations.

The post-pandemic period marked a turning point for Tokyo real estate, with prices gaining significant momentum from 2020 onwards. International investor interest, domestic wealth concentration, and urban redevelopment projects fueled this growth trajectory.

Over the longer 20-year timeframe, Tokyo has maintained an overall appreciating trend despite cyclical fluctuations. The city's status as a global financial center, stable political environment, and consistent urban development have supported sustained property value growth.

What are the price growth forecasts for different Tokyo neighborhoods in the short, medium, and long term?

Tokyo property market forecasts show continued strong growth with varying rates across different timeframes and neighborhoods.

For 2025, analysts project annual price growth of 5-6% across Tokyo, with luxury properties potentially seeing 6-7% increases. These projections reflect sustained demand pressure and limited new supply in central areas.

Specific wards demonstrate exceptional growth potential based on redevelopment activities. Nakano ward shows projected growth of +16.3%, Suginami +15.1%, and Taito/Asakusa +14.8% due to major infrastructure improvements and urban renewal projects. Shibuya recorded a remarkable +32.7% price jump in select locations during 2024-2025.

Short-term forecasts (1-3 years) indicate strong price appreciation in prime wards and areas undergoing redevelopment. Medium-term projections (3-7 years) suggest continued upward trends in urban centers, though growth may stabilize as supply-demand dynamics shift. Long-term outlook (7-15 years) positions Tokyo as a resilient premium market, though cyclical slowdowns remain possible.

Market fundamentals support these projections, including Tokyo's role as Japan's economic hub and ongoing urban development initiatives.

What rental yields can you expect for different property types and locations in Tokyo?

Rental yields in Tokyo vary significantly by location and property type, with central areas offering lower yields due to higher purchase prices.

How do purchase costs compare to ongoing ownership costs in Tokyo?

Tokyo property ownership involves substantial upfront costs followed by manageable ongoing expenses.

Purchase costs typically range from 3-5% of the property value, including stamp duty, registration tax, agent fees, and legal expenses. New builds incur additional consumption tax, making them more expensive to acquire than existing properties.

Ongoing ownership costs center around annual fixed asset tax at approximately 1.4% of assessed property value. Condominium owners pay monthly maintenance fees ranging from ¥10,000-¥40,000, depending on building amenities and age. Homeowner's insurance and occasional repair costs add to annual expenses.

While initial transaction costs represent a significant outlay, ongoing expenses are substantially lower than mortgage payments or the initial purchase investment. Property owners should budget approximately 2-3% of property value annually for ongoing costs.

These cost structures make Tokyo property ownership financially manageable once the initial purchase hurdle is cleared.

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What is the average time to resell a property in Tokyo, and how do values differ by area?

Tokyo property resale timeframes and value retention vary significantly based on location and property characteristics.

Prime central locations typically achieve resale within 2-4 months due to strong buyer demand and limited supply. These areas include major business districts and prestigious residential neighborhoods with excellent transport connections.

Suburban and peripheral properties require longer marketing periods, often 6-12 months, depending on specific location attributes and property condition. Properties near major train stations consistently outperform those requiring longer commutes to central Tokyo.

Resale values perform strongest in central wards for newer, well-maintained properties. Modern condominiums in prime locations often maintain or increase their value, while older properties in suburban areas may experience depreciation.

Property type significantly impacts resale dynamics, with branded development projects and buildings with strong management track records commanding premium resale values and faster transaction times.

Which Tokyo areas are currently undervalued compared to long-term fundamentals?

Several Tokyo areas present compelling value opportunities based on infrastructure improvements and redevelopment potential.

Nakano and Suginami wards represent prime undervalued opportunities, benefiting from recent public transport improvements and ongoing urban renewal projects. These areas offer proximity to central Tokyo while maintaining more accessible price points.

Eastern Tokyo wards, including parts of Taito and Sumida, show strong undervaluation relative to their development potential. Major infrastructure projects and cultural district development support long-term appreciation prospects.

Areas along new or improved train lines consistently outperform market averages as accessibility improvements drive demand. Properties within walking distance of stations on recently upgraded routes offer particular value.

Neighborhoods undergoing district-level redevelopment, such as areas around major station renovations or commercial complex developments, present opportunities for value appreciation as projects complete.

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

What property types hold or gain value best in Tokyo?

Property performance in Tokyo depends heavily on type, location, and age, with certain categories showing superior value retention.

1. New centrally-located condominiums - Benefit from modern amenities, energy efficiency, and prime locations
2. Branded redevelopment projects - Carry developer reputation and comprehensive planning advantages
3. Properties near major stations - Transport accessibility drives consistent demand and value stability
4. Modern mid-rise buildings - Balance between luxury amenities and maintenance costs
5. Properties in mixed-use developments - Benefit from integrated commercial and residential planning

Single-family houses tend to depreciate faster due to Japan's land-versus-building valuation system, except for rare central land holdings where location premium overcomes building depreciation.

Older condominiums and apartments may offer higher rental yields but typically show slower capital appreciation compared to newer properties with modern features and energy-efficient systems.

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.

How does your budget level affect property options and locations in Tokyo?

Budget levels dramatically influence available property types and accessible neighborhoods in Tokyo's stratified market.

Which neighborhoods balance affordability, convenience, and long-term appreciation for residents?

Several Tokyo neighborhoods offer optimal combinations of livability and investment potential for owner-occupiers.

Nakano, Suginami, Setagaya, Koto, and Shinagawa wards provide excellent balance of affordability, convenience, and appreciation potential. These areas benefit from ongoing urban renewal projects and improved transport connections while maintaining more accessible pricing than central premium districts.

Proximity to Yamanote Line stations or express train connections significantly enhances both daily convenience and long-term property value resilience. Properties within 10 minutes' walk of major stations consistently outperform more distant locations.

Neighborhoods with strong local amenities, including shopping districts, schools, and recreational facilities, show superior livability and value retention. Areas like Kichijoji, Nakameguro, and Jiyugaoka exemplify this balance.

Districts undergoing planned development, such as areas around new commercial complexes or infrastructure projects, offer opportunities to benefit from future improvements at current pricing levels.

Which areas and property types show strongest rental demand for investment purposes?

Tokyo's rental market shows distinct preferences based on tenant demographics and location attributes.

Compact units in central business districts demonstrate the strongest rental demand and lowest vacancy risk. Properties near major stations like Shinjuku, Tokyo Station, and Shinagawa attract consistent tenant interest from young professionals and international workers.

Family-sized units in popular school districts maintain solid occupancy rates, particularly in wards known for educational quality. These properties appeal to Japanese families prioritizing children's education and foreign families on corporate assignments.

Modern studios and one-bedroom apartments near universities and business centers show excellent rental performance. Areas around major employment hubs consistently generate strong tenant demand and rental growth potential.

Properties offering modern amenities, good maintenance, and convenient transport access significantly outperform older buildings with limited features, regardless of specific neighborhood.

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

What exit strategies and timing should you consider for Tokyo property resale?

Successful Tokyo property resale requires strategic planning around market cycles, property positioning, and optimal timing.

For maximum resale value, prioritize newly built or recently renovated condominiums in central, transit-rich wards. These properties appeal to the broadest buyer base and typically achieve faster sales at premium prices.

Timing plays a crucial role in resale success, with spring months (March-May) showing highest buyer activity due to Japan's fiscal year cycle and job transfer season. Selling before major tax policy changes or interest rate adjustments can also maximize proceeds.

Consider market cycles and redevelopment plans when planning purchase and exit strategies. Properties in areas with announced infrastructure improvements often see value acceleration as completion dates approach.

Maintain detailed property records, including renovation history and management company performance, to demonstrate value to potential buyers. Well-documented properties with strong maintenance records command premium resale values.

Plan exit strategies around personal financial goals and market conditions, allowing flexibility to hold properties during unfavorable market periods or capitalize on unexpected demand surges.

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. E-Housing Japan - House Prices in Japan
2. BambooRoutes - Average House Price Japan
3. Global Property Guide - Japan Price History
4. CNBC - Tokyo Property Price Surge
5. Tokyo Portfolio - Japan Real Estate Market Trends
6. Ken Corp - Tokyo Property Market Guide
7. Real Estate Tokyo - Tokyo Roadside 2025
8. BambooRoutes - Japan Real Estate Market