Tokyo Property Market and Recommended Areas for Property Investment
Navigating Trends and Investment Hotspots in Tokyo's Evolving Real Estate Landscape
In this article, we are going to look at the latest Tokyo property market and recommended areas for property investment. First of all, let us look at the trends of new condominium unit prices in Tokyo’s 23 wards.
New Condominium Unit Average Prices in Tokyo’s 23 Wards
The average price of new condominiums sold in Tokyo’s 23 wards in 2023 was 114.83 million yen (up 39% from the previous year), exceeding the 100 million yen mark for the first time.
On the other hand, on the supply side, the supply of new condominium units in Tokyo 23 wards recorded 10,797 units in 2022, which was the lowest level since 2005 (65% decline vs 2005).
The main factors for the short supply of newly built condominiums are the disruption of the supply chain caused by the pandemic, the increase of the price of construction materials due to inflation, and the dwindling numbers of construction workers
Supply of New Condominium Units
Since the supply of new condominium units in Tokyo is projected to remain low, prices of new condominium units are likely to further go up.
Then, which parts of Tokyo are good for property investment? The answer is the area called Core 5 Wards (Minato, Chiyoda, Chuo, Shinjuku, and Shibuya). These wards are promising in terms of demand and population projections, since the population continues to grow at a faster pace than in other areas.
Population Projections
The price history proves that the prices in these Core 5 Wards indeed show upward trends.
Land Price Growth Rates in Tokyo 23 Wards from 2023 to 2021
Now let’s look at the characteristics of the Core 5 Wards.
Minato Ward:
Minato is one of the wards with the steepest streets in Tokyo. Minato Ward is a representation of the typical image of Metropolitan Tokyo, with iconic landmarks such as Tokyo Tower, Roppongi Hills and Rainbow Bridge and upscale residential areas exuding a sophisticated atmosphere such as Aoyama and Azabu. Minato ward is also home to most of the embassies in Tokyo and tends to attract high net worth foreigners. As a result Minato is the area with the highest price increases and bigger than average apartments with good views tend to sell extremely fast. High rise condominiums with a view of Tokyo tower are especially prized and some people wait years for specific units to hit the market. Other popular properties are low rise residential buildings with parking included located near international exchange hubs such as the Tokyo American club.