Tokyo Real Estate News – Latest Trends as of April 2025

The Tokyo real estate market continues to show strong activity as we move into 2025. In this article, we will cover a wide range of topics: the latest trends in Tokyo’s real estate market, the impact of new government policies and regulations, recently announced major transactions, trends in foreign investment, notable new development projects, and the relationship between the broader economic environment and real estate. The information is organized into short paragraphs and headings for ease of reading without becoming overly technical. Let's dive into a detailed overview of the current Tokyo real estate market.

Overall Trends in the Tokyo Real Estate Market

Property prices in Tokyo’s 23 wards continue to rise. As of January 2025, the housing price index for the Tokyo metropolitan area had increased by approximately 8.14% year-on-year, and even after adjusting for inflation, it showed a growth of about 3.95%. Land prices are also steadily climbing, especially in commercial areas. In the 2025 public land price announcement, commercial land in Tokyo’s 23 wards rose by an average of +11.8%, with Nakano Ward (+16.3%), Suginami Ward (+15.1%), and Taito Ward’s Asakusa area (+14.8%) leading the gains. In Shibuya Ward’s Sakuragaoka redevelopment district, land prices skyrocketed by 32.7% compared to the previous year.

New condominium prices remain high:
According to the Real Estate Economic Institute, the average price per unit for new condominiums launched in Tokyo’s 23 wards in 2024 was about 111.81 million yen, maintaining a level above 100 million yen for the second consecutive year. Although this is slightly lower than the previous year (about 114.83 million yen, pushed up by a large number of ultra-luxury properties), prices remain extremely high. For instance, in 2023, a two-bedroom unit at the large-scale "Mita Garden Hills" project in Minato Ward sold for over 250 million yen, highlighting the increasing presence of high-end properties.

Transaction Volume and Demand Trends:
Despite rising prices, the number of existing home transactions has calmed. From around 2023, the number of used condominium sales in Tokyo fell by ▲9.8% year-on-year, and used detached home sales dropped by ▲12.2%, marking the end of the post-pandemic rush in demand. This is partly due to buyers hesitating at higher prices, but also because new supply remains limited, helping balance the market.
The government is also tackling the issue of vacant homes (known as akiya), promoting initiatives to circulate underused homes back into the market, improving the supply-demand balance and contributing to price stability.

Changing Buyer Demographics:
The profile of Tokyo real estate buyers is evolving. The ultra-luxury housing market aimed at ultra-wealthy individuals is becoming more prominent. Across Japan, there are around 16,500 individuals with net assets over 3 billion yen, about 6,500 of whom live in Tokyo. Additionally, wealthy individuals from Hong Kong, Singapore, and Mainland China are increasingly investing, viewing Tokyo as a destination for asset preservation and investment.
In 2024, the resumption of post-pandemic tourism brought about 37 million visitors to Japan, including wealthy tourists who ended up purchasing real estate in Tokyo. Tokyo’s safety and stability continue to attract both domestic and international high-net-worth buyers.

New Policies and Regulations Affecting the Real Estate Market

In recent years, governments and municipalities have introduced a range of policies and regulations related to the real estate market. Here are the key topics implemented or enforced between 2024 and 2025:

Mandatory Installation of Solar Panels (Tokyo)

Starting April 1, 2025, Tokyo has launched Japan’s first system mandating the installation of solar power panels on newly built detached houses. This initiative, led by Governor Yuriko Koike under the "Carbon Half" program, aims to halve greenhouse gas emissions compared to 2000 levels by 2030.
This regulation targets large-scale housing suppliers in Tokyo, assigning each company a quota for solar energy generation based on the number of homes they build.
Although individual homebuyers are not directly obligated, housing manufacturers are now required to provide environmentally friendly homes. Tokyo has also prepared subsidies for smaller builders to support the development of energy-saving homes.
The average cost of installing solar panels is estimated at around 1.17 million yen (for a 4kW system), and it is expected that with subsidies and electricity sales income, costs could be recovered in about 8–13 years.
Going forward, this environmental regulation could affect the price and specifications of newly built homes.

Amendments to the Real Property Registration Act (Nationwide)

Starting April 2024, amendments to Japan’s Real Property Registration Act require overseas real estate owners to register a domestic point of contact.
This change addresses the growing issue of unidentified landowners, where over 20% of land nationwide has unclear ownership, largely due to unregistered inheritances.
Under the revised law, when a person with an overseas address acquires property, they must register a domestic representative’s name and address.
This move is in response to the growing difficulty in contacting owners amid an increase in purchases by foreign investors following the depreciation of the yen.
As a result, foreign buyers must now select a domestic representative as an additional step when purchasing property in Japan.

Measures Against Vacant Homes and Tax Incentives

Both the national and local governments are tackling the growing problem of vacant homes by introducing measures to promote demolition of dilapidated properties and to encourage renovation and circulation of vacant homes through tax incentives.
These measures include subsidies for demolishing severely deteriorated homes and tax breaks for investors who buy and renovate vacant houses.
For example, Tokyo actively promotes a special deduction for capital gains of up to 30 million yen when selling a renovated vacant house under certain conditions.
In areas densely packed with aging houses, designations of "special vacant houses" and the removal of residential land tax exemptions (resulting in increased property tax) are used to encourage owners to address neglected properties.
These initiatives are expected to expand the supply in the second-hand housing market and help ease future housing shortages.
Foreign investors are also beginning to purchase cheap rural properties via "vacant house banks," and the Japanese government supports this trend with renovation subsidies.

Deregulation of Urban Development

The Ministry of Land, Infrastructure, Transport and Tourism (MLIT) and the Tokyo Metropolitan Government are easing the application of urban planning laws and leveraging National Strategic Special Zones to promote private-sector-led redevelopment.
Around Shinagawa Station, where plans for the Linear Chuo Shinkansen starting station have been finalized, major redevelopment projects involving office, commercial, and residential complexes are underway.
Projects are being prioritized that contribute to enhancing the city's value by utilizing relaxed floor area ratios and tax incentives.
However, due to rising construction costs, some plans have had to be revised. For instance, redevelopment around Nakano Station faced difficulties continuing under the original framework, leading to a re-selection of developers in March 2025.
Despite these challenges, redevelopment activities remain vigorous across Tokyo, driven by a mix of policy support and shifting market conditions.

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Recent Major Real Estate Transactions

From late 2024 to early 2025, Tokyo’s real estate market witnessed some of the largest transactions in history, drawing significant attention from domestic and international investors. Here are some key examples:

Blackstone’s Acquisition of Tokyo Garden Terrace Kioicho (Approx. 400 Billion Yen)

In December 2024, major U.S. investment fund Blackstone officially announced it would acquire "Tokyo Garden Terrace Kioicho" (located on the former site of the Grand Prince Hotel Akasaka in Chiyoda Ward) for approximately 400 billion yen.
For the seller, Seibu Holdings, this became its largest-ever real estate sale, generating an estimated 260.4 billion yen in profit.
For Blackstone, this represented its largest investment project ever in the Japanese market.
This flagship mixed-use development, comprising offices, hotels, residences, and retail, stands as a symbolic transaction, demonstrating the strength of Tokyo’s real estate market.

Large-Scale Hotel Acquisitions by Domestic and Foreign Funds

Driven by the recovery of tourism demand, hotel transactions have also become active.
In 2024:

• TPG Capital and Angelo Gordon jointly acquired Grand Nikko Tokyo Daiba for about 106 billion yen.
• Invincible Investment Corporation (under U.S.-based Fortress Investment Group) acquired 12 hotels nationwide for around 104 billion yen.

These deals, exceeding 100 billion yen each, reflect expectations of expanding inbound demand, and capital is once again flowing into hotel assets that had slumped during the pandemic.

Major Transactions in Logistics Facilities and Office Buildings

With the office market rebounding and growing demand for e-commerce (EC) logistics, large-scale sales were seen in other sectors too.
For example:

• In 2024, Industrial & Infrastructure Fund Investment Corporation (IIF, under KKR) acquired 28 logistics facilities nationwide from LOGISTEED (related to Nippon Yusen) for about 108 billion yen.
• A domestic SPC (Special Purpose Company) acquired a part of Shibuya Sakura Stage, a large redevelopment project in Shibuya, for approximately 71.6 billion yen (book value basis).
• A consortium including local banks purchased the World Business Garden skyscraper in Chiba City for about 70 billion yen.
• The Singaporean sovereign wealth fund GIC acquired a logistics facility in Yokohama for around 56.2 billion yen.

Overall, robust investment capital is flowing into the real estate sector.

Increase in High-End Residential Transactions

Transactions involving luxury residential properties by individual wealthy buyers are also rising.
In 2024, 28 residential property transactions exceeding 500 million yen were completed in Tokyo, reaching record levels.
Luxury residences in areas like Roppongi, Aoyama, and Toranomon Hills are setting new records for price per square meter.
For instance, as of 2025, a high-end condominium on a hill in Roppongi is offered at over 1.4 million yen per tsubo (approx. 1.44 million yen per square meter), bringing Tokyo’s prime residential prices closer to those of London and New York.

These successive mega-transactions demonstrate the high liquidity and trust in Tokyo’s real estate market.
In particular, large-scale foreign investments are noticeable, highlighting a renewed evaluation of Japan's market stability and growth potential.

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Notable New Development Project Trends

As of 2025, a variety of redevelopment projects and large-scale new constructions are underway or have been completed across Tokyo. Here are some of the key projects shaping the city's future:

Mita Garden Hills (Minato Ward)

Located just a 5-minute walk from Azabu-Juban Station, this massive condominium project comprises 1,002 units and was completed in late March 2025, with move-ins starting in late April.
This ultra-luxury complex caused a stir with pricing, where even 2-bedroom units exceeded 200 million yen.
Given its scale and prestige, it has become a landmark project in Minato Ward, and its asset value is expected to remain high or even increase post-completion.

Proud Tower Shibuya (Shibuya Ward)

Developed by Nomura Real Estate, this 36-story tower, located just a 5-minute walk from Shibuya Station, comprises 132 units.
Completed in March 2025, move-ins are scheduled to start in June of the same year.
Rental listings have already appeared, with an example being a 70-square-meter 2LDK unit on the 11th floor priced at 1.05 million yen per month plus a 50,000 yen management fee.
This rare property, combining central convenience with a desirable residential environment, has been highly evaluated for its strong resale value.

Park Tower Nishishinjuku (Shinjuku Ward)

Completed in 2024 near Shinjuku Station's west exit, this 40-story, 470-unit skyscraper offers urban living close to Shinjuku’s office district, while also enjoying the greenery of nearby Shinjuku Central Park.
With attached commercial facilities and daycare centers, it answers the growing need for urban residential options.
Several other mid-sized condos are also under construction in the Nishishinjuku area, anticipating a rise in the local residential population.

National Strategic Special Zone Redevelopments (Shinagawa, Yaesu)

In Shinagawa, the "Shinagawa Development Project" (tentative name) is progressing around the future Linear Chuo Shinkansen station, involving ultra-high-rise twin towers for offices, residences, and retail, scheduled to complete sequentially over the next few years.
Meanwhile, in Chuo Ward’s Yaesu 1-Chome East District, a major redevelopment project "TOFOLLOW YAESU" broke ground, with the district’s name unveiled in March 2025.
Yaesu’s skyline will change dramatically as new skyscrapers supply more office space while incorporating luxury residences and hotels into upper floors.

Other Notable Developments

• In Tokyo Bay’s waterfront area, the HARUMI FLAG project — a repurposed Olympic Village — is being handed over to residents in phases starting from 2024.
• The Toranomon-Azabudai Project partially opened at the end of 2023, with the Azabudai Hills skyscraper already operational.
• In Shibuya, the opening of the Shibuya Sakura Stage redevelopment has pushed surrounding land prices significantly higher, reflecting the transformative impact of these projects.

Common themes among these developments include mixed-use projects and improved convenience.
Large, multifunctional developments are enhancing the value of surrounding areas, and projects with direct train station access remain highly sought after, even at premium prices.

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Impact of Economic Conditions on the Real Estate Market

Finally, let's look at the broader economic environment surrounding Tokyo’s real estate market. Factors like interest rates, inflation, and exchange rates greatly influence real estate trends.

Bank of Japan’s Monetary Policy and Interest Rates

As of 2025, the Bank of Japan is entering a phase of shifting away from ultra-low interest rates, but rapid rate hikes have not occurred.
Market forecasts suggest short-term rates may rise slightly to about +0.5% to +0.75% by the end of 2025, and real estate loan rates remain below 2%.
Industry insiders are optimistic, noting that as long as rents continue rising, moderate interest rate increases will have limited impact on investments.
Long-term fixed-rate mortgages (such as Flat 35 loans) remain in the high 1% range, keeping homebuyer appetite alive.
However, careful financial planning is increasingly important, especially for highly leveraged investors.

Inflation and Wage Trends

Japan’s Consumer Price Index (CPI) is projected to stay around a 2%+ growth rate between 2024 and 2025.
While price surges in energy and food are easing, rents are clearly rising.
According to the Ministry of Internal Affairs and Communications, rents in Tokyo’s 23 wards rose +1.8% year-on-year as of April 2025, accelerating from +1.1% in March.
Wage growth is also spreading, with major companies raising salaries by 3–5% in 2024.
Sustained growth in both wages and prices could put additional upward pressure on real estate rents.
While inflation can help property owners preserve asset value, it increases housing costs for tenants, making it crucial to watch rent trends and vacancy rates carefully.

Exchange Rates (Yen Valuation)

The yen has remained weak (around 1 USD = 140 yen) from 2024 into 2025, fueling foreign investment inflows.
The weaker yen makes Japanese real estate appear relatively cheaper, encouraging foreign acquisitions.
However, many foreign investors prioritize long-term holdings based on Japan’s market stability and real estate cash flow, rather than short-term exchange rate fluctuations.
Still, if the yen strengthens in the future, it could slow down foreign buying somewhat.

Domestically, a weak yen has pushed up import costs, including construction materials.
Although material costs have recently stabilized, it is noted that construction costs have risen by nearly 30% since 2020, combined with labor shortages, pressuring developer profit margins.
This supply constraint is one reason property prices remain firm.

Economic Trends and Real Estate Demand

Japan’s economy is in a gradual recovery phase in 2025.
With the tourism sector rebounding and exports recovering, corporate earnings are also improving.
In real estate, Tokyo’s office vacancy rate has improved to around 4%, down from the pandemic peak of over 6.5%, and office rents have turned positive year-on-year.
Mitsui Fudosan, for example, reported 10–15% rent increases during 2023 renewal contracts.
Other sectors like logistics facilities (due to e-commerce growth) and hotels (with rising occupancy rates) are also strengthening, and this real demand is supporting the investment market.
Real estate transactions remain active, showing no signs of stagnation even amid moderate interest rate hikes.

New residential construction starts declined by ▲1% year-on-year in 2024 and ▲4.6% in January 2025, continuing a trend of supply restraint.
This supply shortage is helping maintain property prices despite broader economic changes.

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Conclusion

As shown, Tokyo’s real estate market remains robust under a solid economic backdrop, with high demand and tight supply conditions.
With moderate inflation, low interest rates, and strong domestic and foreign demand, momentum remains strong as of April 2025.
However, medium- to long-term risks — such as changes in interest rates, economic cycles, and policy shifts — must still be considered carefully.
Going forward, keeping a close eye on market developments and updating information at the right time will be critical.

We will continue to deliver the latest updates on Tokyo’s real estate trends.
Please use this information as a helpful reference for your real estate buying, selling, or investing decisions in Tokyo.

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