Tokyo condo prices reach new highs in 2025

C5W leads 20% surge in new condo prices across Central Tokyo.

Tokyo’s 23-ward (23W) condominium market continued its record-breaking streak in 2025, with both new launch and resale prices climbing sharply, according to a report by Savills.

Strong demand for centrally located properties — particularly within the Central Five Wards (C5W) — has sustained price momentum, even as borrowing costs begin to edge higher.

Central Wards Draw High-Net-Worth and Foreign Buyers

Savills noted that properties in the C5W remain highly sought after by high-net-worth individuals and foreign nationals, many of whom view these assets as long-term investments or second homes.

In Q3/2025, the average price of new condominiums in the 23W rose approximately 20% year-on-year (YoY) to JPY133 million, marking a new record.

The resale market mirrored this strength. The year-to-date average transacted price in the 23W increased around 12% from the 2024 average to JPY1.48 million per sq m in July 2025.

Price growth was even more pronounced in the C5W, where the average transacted price jumped 20% from the 2024 average to JPY2.60 million per sq m.

Mortgage Rates Rise but Remain Historically Low

The rate environment has gradually shifted as the Bank of Japan continued raising policy rates, reaching 75 basis points in December 2025.

As a result, mortgage rates have inched up, prompting some buyers to reassess their purchasing plans. However, financing conditions remain relatively accommodative. As of January 2026, floating mortgage rates were still below 1.0% at many megabanks and online banks — comparatively affordable when measured against other major Asian markets.

Savills highlighted that this supportive financing backdrop has helped sustain buyer appetite despite incremental rate hikes.

Supply Constraints and Policy Watch

Looking ahead, condominium prices are expected to remain elevated in 2026, supported by declining new supply and still-favourable lending conditions.

However, sustained price appreciation has intensified concerns over housing affordability for local residents.

Against this backdrop, Prime Minister Sanae Takaichi has announced plans to introduce measures aimed at fostering a healthier and more sustainable property market, including efforts to curb short-term speculative resale transactions.

Outlook: Elevated Prices Likely to Persist

Savills expects Tokyo’s condominium market to remain resilient in the near term, underpinned by strong domestic and foreign demand, limited new supply and comparatively low borrowing costs.

Nevertheless, with affordability pressures mounting and potential regulatory measures on the horizon, market participants will be closely watching policy developments and interest rate trends as 2026 unfolds.