Who can afford Japan’s ultra luxury residences?

Such units typically cost over USD7 million.

While there is no universal definition of what constitutes an “ultra-luxury residence” in Japan, they typically cost over JPY1 billion, and also comprise units with prices starting at around JPY20-25 million per tsubo, according to a recent Savills report. Many are located in central locations. Given their high price points, only a very small number of individuals could be considered as potential customers for ultra-luxury residences, most of whom are high-profile business owners that may own or lease multiple units.

“That said, the ultra-luxury residence market is generally very opaque, so units are typically marketed directly to high-profile clients known to developers or realtors, and little information is released openly to the public,” the report said.

Here’s more from Savills:

Nonetheless, developers of ultra-luxury units can feel more confident given Japan’s sizable population of wealthy residents. Indeed, Japan is the third/fourth largest economy in the world, and is home to a large number of UHNWIs, a large proportion of whom are based in Tokyo.

According to Altra, as of 2023, Japan had over 16,500 and Tokyo had close to 6,500 UHNWIs, both increasing more than 10% from the previous year, despite the depreciated yen. The same report also forecasts the number of UHNWIs in Tokyo to grow by more than 10% annually between 2023 and 2028.

Other regions in Asia also have a major pool of potential clientele. The Asia Pacific region is estimated to be home to over 160,000 UHNWIs as of 2024, and is projected to grow by almost 50% by 2028. Japan is a top candidate for such individuals to live in and store wealth given its geographical proximity, relative cultural similarity, and high quality of life.

Indeed, many ultra-luxury residences in Tokyo are rumoured to be owned by high-profile foreign nationals as pied-à-terre, who may own or rent multiple properties, showing proof of concept.

Overall, there is likely a sizable pool of potential clientele for ultra-luxury residences in Tokyo - wealthy domestic residents, and foreign nationals both living in Japan and abroad, bolstered by the attractiveness of Tokyo as a place to live and its strong ownership laws.