Tokyo condos cost more than ever as prices keep climbing

New condominium prices in Tokyo and its surrounding metropolitan area climbed to a record high in 2025, fueled by soaring construction costs, a sharp shortage of supply, and a growing concentration of high-end luxury developments, according to data released on January 26.

The average price of a newly built apartment rose 17% from a year earlier to ¥91.8 million ($596,000), figures from the Real Estate Economic Institute showed on January 26. The increase marks a rebound after prices dipped slightly in 2024, following five consecutive years of gains, Bloomberg writes.

Housing prices in the Japanese capital have continued their upward trajectory as a weak yen drives up the cost of imported construction materials, while persistent labour shortages push building expenses higher. At the same time, supply constraints have intensified. New apartment supply in the Tokyo metropolitan area fell 4.5% in 2025 to the lowest level in more than half a century, the report said, exacerbating price pressures.

Developers have increasingly concentrated on premium projects in central districts, where higher prices can offset rising costs.

“Developers are focusing on central locations where they can sell luxury condos and justify the pricing,” said Zoe Ward, chief executive officer of brokerage Japan Property Central. “A lot of their inputs will be construction costs and land pricing.”

The Bank of Japan’s gradual push to raise interest rates has so far had little impact on cooling the housing market. Instead, escalating prices have intensified concerns over affordability and speculative buying, particularly by foreign investors. Prime Minister Sanae Takaichi has asked government ministries to explore ways to improve monitoring of such investments.

The luxury segment has been a key driver of the market. Average prices of new condominiums in central Tokyo jumped about 22% to ¥136 million ($884,6) in 2025, the institute reported. Listings priced above ¥100 million ($650,5) surged 55% from the previous year. The most expensive unit on the market was a ¥2.5 billion ($16.2 million) condominium at Brillia Tower Nogizaka.

By Sabina Mammadli