For years half the planet (and another half as well) viewed Tokyo with a mixture of admiration, curiosity and envy. While other metropolises were dealing with increasingly expensive housing, which was expelling the most humble families, the Japanese capital made headlines On the contrary: in 2023 there were who presented it in fact as “the last big city with affordable housing.” At least if we were talking about rents. And that was the most populated city of the planet.
There is signs that that is changing.
Tokyo’ the affordable‘. Binyamin Appelbaum, columnist for The New York Times, I told it very well in 2023: while a couple on the minimum wage was unable to pay the rent for a two-bedroom apartment anywhere in the New York area, another Japanese couple with the same conditions (full-time work and the legal minimum wage) could afford equivalent housing in at least half a dozen districts of Tokyo.
The Japanese capital was a benchmark, the example of rentals within reach of any pocket. “The last big city with affordable housing”, titled at full blast around those same dates the Australian newspaper Financial Review.
Tokyo vs Manhattan. The data confirms that Appelbaum was not wrong. Although living in Tokyo is far from cheap, in 2023 the city had a residential offer large and diverse enough to not suffocate its residents. Even the most humble.
In 2024 Michael Amerson, analyst at the US Department of Housing, explained that renting a one-bedroom apartment in central Tokyo cost around 80,000 yen, about $500. Other sources speak of between 630 and 1,580 dollars per month, but even those figures are far from the 4,000 that is asked for a home of the same type in Manhattan.
“Unlike other metropolitan areas around the world, Tokyo has avoided a housing crisis. Residents can enjoy a vibrant urban lifestyle without having to shoulder the financial burden that residents of many other large cities bear,” pointed out Amerson. The reason? To a large extent Tokyo real estate culture. Unlike what happens in other metropolises, the Japanese capital has “an accelerated cycle of housing demolition and reconstruction,” which makes it easier to adapt to the needs of the market.
But… And why is that? “People treat houses like cars,” Appelbaum joked in 2023. New construction is prioritized to such an extent that its weight in the market far exceeds that of other cities. Between 2013 and 2018, new housing represented 86% of sales in Japan, while in the US that percentage is usually around 15%. Unlike what happens in other cities that prioritize the conservation of their old buildings or pamper their historic districts, something different takes precedence in Tokyo: urban renewal.
It is not just a question of the market or urban regulation. That way of thinking connects with his planning style and the history of a region forced to deal with natural disasters who has also seen how fire and the bombs They affected part of his assets. Added to this are regulatory issues that facilitate the progress of the works and their commitment to tall buildings, homes that are often small by European standards and with few green areas.
Signs of change. In recent months, however, some media outlets have stopped talking about the virtues of the Tokyo model to become a question: “Is it still affordable to live there?” That is the doubt that I left bouncing in September The Japan Times in a article in which he confirms that (at least if we talk about the buying and selling market) the city is no longer within reach of any pocket.
Tokyoites have encountered a price increase that affects both new housing and second-hand properties. And the latter usually wake up little interest among buyers. a study from the Tokyo Kantei company shows that it is no longer strange that the average price of a used apartment of 80 square meters exceeds 100 million yen, around 540,000 euros, with year-on-year increases that are even above 30%.
Are there more indicators? Yes. They are just that, indicators, but at a minimum break the rhetoric that has surrounded the Tokyo real estate market until now. There are studies that speak of year-on-year price increases of 9% or even more than 60% if the focus is expanded and the data from 2021 and 2025 are compared. Prices are also growing in the metropolitan area (although to a lesser extent) and seem to be also affecting the rental market residential.
In practice, this means that a family that a few years ago could acquire Quietly, a modern three-bedroom, 70 m2 apartment near the center of Tokyo for just over $400,000 is now forced to look at real estate agencies in other areas. And it doesn’t seem like that’s going to change. The latest data from Tokyo Kantei show that the price of a 70 m2 second-hand apartment is around 114 million yen, 34% more than in 2025.
And what is the reason? Better to talk about “reasons”, in the plural. The analysts who have been launched To speculate on the reasons for the price increase, they point to the increase in material and labor costs, the influence of the pandemic on buyers’ tastes (they are now looking for houses with more rooms), the effect of historically low interest rates or simply the increase in demand for housing in Tokyo. While the rest of the country loses population, the capital remains more or less stable either even win residents.
Exploring the market. There is another factor that helps understand Tokyo’s price rise, one that also has slipped in in it political debate: home purchases by foreigners, including those for speculative purposes.
The weakness of the yen, the fact that Japanese real estate was more affordable than that of other countries and the lack of restrictions on foreign purchases has attracted the interest of investors of other nationalities, which has in turn been felt in the price per m2. The data are certainly eloquent. In March 2025, Mitsubishi UFJ Trust & Banking Corp published a study revealing that in certain areas of Tokyo Prefecture between 20 and 40% of the new apartments ended up in the hands of foreign buyers.
Images | Clement Souchet (Unsplash), Guus Baggermans (Unsplash)
GIPHY App Key not set. Please check settings