How much does an apartment cost in Tokyo – Sept 2022 Update

In August, the average sales price of a newly constructed apartment in the greater Tokyo region fell and supply plummeted year-on-year, as suppliers pulled back on releasing new units for sale.

The average sales price for a new apartment sold in the greater Tokyo metro region hit ¥61,020,000 ($423,000 USD), which is an 18.1% year-on-year drop and a decrease of 4.3% compared to July.

The year-on-year price drop was especially pronounced last month because the August 2021 Tokyo 23 Wards average sales price, of ¥108,120,000 ($748,000 USD), was an outlier (compared to the 2021 average sales of ¥82,930,000 for the Tokyo 23 Wards).

August was the second consecutive month in which the average sales price and average sales price per square meter both dropped.

Is this the beginning of a turnaround in the long-term upward trend in sales prices? The chart below shows the averages sales price of a newly constructed apartment in the Tokyo metro region from 2015 to 2021. The upward price trend started accelerating in 2020, driven by an extremely weak supply situation amidst strong demand-side pressure.

The overall supply and demand situation has not significantly changed in the last two months.

As of the end of August, total inventory of newly built condominiums in the greater Tokyo area came to 4,762 units, a decrease of 364 units compared to July. This compares to a total inventory of 5,889 units at the end of August 2021, or about 19.1% less than the inventory for the comparable period last year.

In its 2022 fiscal year forecast, the Real Estate Economic Institute (REEI) estimated that the total supply of new units in greater Tokyo would grow by about 4.6% year-on-year to about 34,000 units. If this holds, it would take supply above the pre-pandemic fiscal year 2019 level of 31,238.

However, this number would still be below the pre-pandemic supply trend.

Supply drop

Developers in the greater Tokyo region pulled back sharply on supply last month.

Supply of newly constructed apartments in the greater Tokyo metro region. Source: Real Estate Economic Research Institute (REEI), August 2022

However, the underlying demand factors remain strong.

The Bank of Japan has indicated that it plans to continue with its easy money policy, even as the yen remains weak against the US dollar and Euro. This means that mortgage rates in Japan will likely remain at historic lows for the foreseeable future, incentivizing many renters to consider buying their own home.

The pandemic has also opened up working-from-home opportunities to many workers. This has caused some people to consider buying a home, whether a condominium or single-family home, rather than staying put in an apartment.

For these reasons, we believe that the July and August price dips for the greater Tokyo region do not suggest that the long-term upward price trend will necessarily turn south yet.

It is true, however, that the August contract rate for the greater Tokyo region was 62.0%, a year-on-year drop of 11 points.

The contract rate is the number of units contracted for sale divided by the number of units offered for sale. The 70% mark is considered the dividing line between a seller’s and buyer’s market. The average contract rate for greater Tokyo was 72.1% in the first half of 2022, which means that it has been a strong seller’s market, as demand has exceed supply. So, the August contract rate suggests that demand has slowed compared to the beginning of the year; but again, it is not enough to suggest that long-term buyer demand has suddenly turned around.

The last three months of the year are not traditionally strong months for sales but the conditions we’re seeing, including the sharp drop of the yen against other major currencies, still historically low interest rates and government incentives for homebuyers, suggest the demand-side will continue to be strong.

Average Sales Price of an Apartment in Tokyo – By City & Prefecture

Here is the breakdown of average sales prices by area for August 2022 compared to July 2022 and year-on-year.

Average Sales Price Per Square Meter of an Apartment in Tokyo – By City & Prefecture

Here is the breakdown of average sales prices per square meter by area for August 2022 compared to July 2022 and year-on-year.

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FAQs About Buying Property in Japan

Can a foreigner buy property in Japan?

Yes. You can buy property in Japan regardless of your nationality or country of origin. There are also no residency requirements for buying real estate in Japan. Securing financing as a resident foreigner is more complicated. For info on financing, please see Basic Requirements for Getting a Mortgage as a Foreigner in Japan

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Please see our seminar page for a current list of seminars on: how to buy a home in Japaninvesting in Japanese real estate for beginnershow to apply for permanent residency in Japanhow to sell property in Japan, and much more.

How do I get a property loan as a foreigner in Japan?

Please see this article for information on: Getting a property loan as a foreigner in Japan

Mortgage rates in Japan: May 2022

What is the process for buying a property in Japan?

Please see our step-by-step guide: Guide to Buying Property in Japan

See how much you can borrow and your monthly payments in yen: Yen Mortgage Loan Calculator

For information about purchase and brokerage fees: Breakdown of real estate purchase fees and taxes in Japan

Need to Know

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Repair reserve fund fees explained

Parking spaces in Japanese condominium buildings explained

Building your own home in Japan

7 reasons why foreigners are interested in buy a home in Japan, especially now – March 2022 Update

Average price of an apartment in Japan by prefecture – 2022 Ranking

Bilingual Real Estate Agent in Tokyo Answers Your FAQs on Buying and Managing an Investment Property

How much is my property worth?

Real Estate Japan is pleased to offer free, no obligation appraisals for owners of property in Japan. Please click here and fill out the form: How much is my property worth?

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Greater Tokyo Apartment Market 2022 Mid-year Trends Report


REEI, August 2022 Tokyo New Condominium Market Trends Report (PDF in Japanese)

REEI, July 2022 Tokyo New Condominium Market Trends Report (PDF in Japanese)

REEI, August 2021 Tokyo New Condominium Market Trends Report – Corrected Version (PDF in Japanese)

Photo credit: Tokyo skyline with SkyTree, iStock/SeanPavonePhoto

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