Tokyo Housing Market Slows After Record Growth

The market for secondhand condominiums in central Tokyo has set repeated price records in recent years, driven by strong investment demand, but the situation is beginning to shift. Supply continues to rise, while buyer activity has weakened and price adjustments are becoming more common, The Asahi Shimbun reports.

Record Housing Prices in Tokyo

Tokyo Kantei, a real estate market analytics firm, estimates the value of resale apartments based on asking prices. For comparability, figures are calculated using the price per tsubo (3.3 sq. meters) and then converted into the price of a 70-square-meter unit — a typical family-sized apartment.

In April 2026, the average asking price for used condominiums in Tokyo’s six central wards — Chiyoda, Chuo, Minato, Shinjuku, Bunkyo, and Shibuya — rose 0.5% from March to a record 188.2 million yen (about $1.17 million). This marked the first monthly increase in three months.

Over the past five years, average prices have doubled, and compared with a decade ago, they have increased 2.6-fold. The main driver of growth has been large-scale investment in luxury real estate in the capital, which has also pushed up prices of resale apartments in major cities across Japan.

Turning Point in Tokyo’s Property Market

Luxury Segment

Analysts are now observing clear changes in market conditions. As of April, the supply of luxury high-rise condominiums in central Tokyo shows signs of excess. The number of listed resale units reached 4,682 — the highest level since 2005. This indicator has been rising steadily since last summer and is considered a key leading signal of market direction.

At the same time, the share of properties that saw price reductions after being listed has increased sharply. A year ago, the figure stood at 34%, but it has now climbed to 49.1%. In other words, nearly half of sellers were forced to cut prices within three months of listing. The average discount reached 6.1%, the highest level in a decade.

Residential Condominiums

Conditions differ in other parts of Tokyo. In April, the average price of resale condominiums in six southern and western wards, including Shinagawa and Suginami, reached 105.1 million yen (about $652,000), up 1.8% from the previous month.

In 11 northern and eastern wards, including Itabashi and Koto, prices rose 2.6% to 81.7 million yen (about $506,250). Senior researcher at Tokyo Kantei, Masayuki Takahashi, noted that apartments in these areas are more often purchased for owner-occupation rather than investment, meaning a sharp price decline in the near term is unlikely.

Investment Activity in Japan

Yoichi Ikemoto, editor-in-chief of the real estate portal Suumo, said investors are no longer buying apartments as aggressively as before. In his view, Tokyo’s condominium market is likely approaching a plateau.

Takahashi added that owners in central Tokyo are finding it increasingly difficult to attract buyers due to high price levels. In his assessment, the market is entering a turning phase after a period of excessive growth.

“Perhaps we are seeing a kind of market reaction after it effectively became a venue for a money game driven by excessive speculation,” he said.

He also explained why average asking prices reached a new record in April despite signs of correction. According to him, owners of relatively new and high-priced properties have begun bringing them to market more actively, responding to rising inventory and changing conditions, whereas previously they were reluctant to sell at more accessible prices.

Conclusion

Analysts at International Investment note that Tokyo’s secondary housing market is likely entering the final stage of its investment cycle, where rapid price growth gives way to a period of stabilization. This shift typically reflects a declining influence of speculative capital and a gradual return to fundamental drivers — real demand, buyer purchasing power, and the balance between supply and sales.

For investors, this marks a change in market dynamics. Strategies based on rapid capital appreciation are becoming less effective, while greater importance is placed on asset liquidity, location quality, rental demand stability, and long-term yield potential. At the same time, risks are rising, including longer selling periods and the need for price adjustments to complete transactions. If this trend continues, the market may become less attractive for short-term speculative investment but more predictable for long-term investors focused on capital preservation and stable returns.