Japan faces soaring condo prices, with the average cost of a new unit in Tokyo reaching ￥94.89 million. This figure represents a 19.3% increase from the same period in 2024, signaling major affordability challenges for households. Consequently, both government authorities and private developers are seeking ways to stabilize the housing market and prevent further increases.
Some observers cite foreign nationals’ real estate purchases as a factor behind soaring condo prices. The Land, Infrastructure, Transport and Tourism Ministry has examined registry data since spring to assess foreign acquisitions. A ministry source indicated that the proportion of purchases by foreign nationals may be lower than widely assumed, suggesting other factors drive the price surge.
Prime Minister Sanae Takaichi stressed the urgency of the issue during a council meeting of relevant ministers on November 4. She instructed Minister Yasushi Kaneko to investigate transactions and release the findings publicly. Kaneko said, “I will work closely with relevant ministries to address any issues and ensure harmonious coexistence among residents.” These actions reflect the government’s proactive approach to maintaining housing stability.
Japan’s commitments under the World Trade Organization make nationality-based purchase restrictions difficult. When Japan joined the WTO in 1995, it agreed to treat domestic and foreign buyers equally to attract investment. Any nationality-based restriction would require complex negotiations and could provoke international objections from countries whose citizens invest in Japan.
By contrast, some nations, including the United States and Australia, maintain legal measures to limit foreign property purchases. For example, Australia recently banned foreign acquisitions of established dwellings for two years. Nevertheless, Japan has limited options without breaching international agreements.
Meanwhile, private developers have implemented measures to reduce speculation. Mitsui Fudosan Residential Co. warned buyers in Tsukishima that deposits would be forfeited if units were resold before handover. Sumitomo Realty & Development Co. imposed a five-year resale ban in Toshima and Itabashi wards, with a 20% penalty for violations. These rules apply to all buyers, regardless of nationality, and aim to moderate market volatility.
Reduced supply is another factor contributing to soaring condo prices. Newly built condos in Tokyo fell from about 45,000 units in 2014 to 23,000 units in 2024. This decline has increased competition among buyers and pushed prices higher, underscoring the need for coordinated solutions.
Osamu Tanaka, executive chief economist at the Dai-ichi Life Research Institute, said, “Even if foreign purchases are small, they could still affect prices. A comprehensive approach is necessary to stabilize the market.” Analysts recommend combining supply-side measures, resale restrictions, and targeted policies to ensure affordability and prevent speculative spikes.
The government plans to release its findings on foreign purchases soon. In the meantime, private developers continue safeguards to protect buyers and stabilize the market. Coordinated action appears essential to address Japan’s real estate challenges and reduce soaring condo prices over the next few years.
