November 17, 2025
TOKYO – The public and private sectors are scrambling to find ways to combat soaring condominium prices.
Some observers have cited real estate purchases by foreign nationals as one of the causes of the rising prices, and the land ministry is expected to release the findings of its investigation into this issue soon.
However, in line with its pact with the World Trade Organization, Japan will not be able to easily restrict only foreigners from purchasing real estate. Consequently, the government has few concrete options available.
Private real estate firms have taken matters into their own hands by taking steps such as establishing rules that impose financial penalties or terminate the contract if a condo is resold within a certain period.
The average price of a new condo in the Tokyo metropolitan area climbed to a record-high ￥94.89 million between April and September this year, according to the Real Estate Economic Institute Co. The figure was 19.3% higher than during the same period in 2024.
It has been suggested that real estate acquisitions by foreign nationals have been a factor in this surge. Indeed, the weak yen is making Japanese real estate relatively cheap for people from abroad.
On Nov. 4, at the first meeting of a council of relevant ministers to discuss policies on foreign nationals, Prime Minister Sanae Takaichi instructed Land, Infrastructure, Transport and Tourism Minister Yasushi Kaneko to swiftly determine the actual situation involving condo transactions and announce the findings.
“I’ll work closely with relevant ministries and agencies and deal appropriately with any issues to help with the acceptance of foreign nationals and to realize a society of well-ordered and harmonious coexistence,” Kaneko said.
Since spring, the Land, Infrastructure, Transport and Tourism Ministry has been using registry information to glean a clearer picture of real estate purchases by foreign nationals. The ministry will likely release the results soon, but a ministry source said, “The proportion of acquisitions by foreign nationals isn’t as high as many people have been saying.”
Analyses by major real estate companies have indicated that a fall in the number of condos coming onto the market is a factor behind the spiking prices. The number of newly built condos in the Tokyo metropolitan area stood at about 45,000 in 2014, but that number had halved to about 23,000 in 2024.
WHO pact
Even if real estate acquisitions by foreign nationals was contributing to skyrocketing prices, observers believe imposing restrictions on purchases based on nationality would be difficult. This is because when Japan joined the WTO in 1995, the government prioritized attracting investment from abroad and agreed to treat Japanese and foreign nationals equally in real estate transactions.
The situation is different elsewhere. The United States and Australia have reserved the right to distinguish between their own and foreign nationals when it comes to land acquisitions.
Some nations have imposed restrictions on foreign nationals. For example, starting from April, the Australian government has banned the purchase of established dwellings by foreign investors for two years.
However, it would be difficult for Japan to change the 1995 agreement. The government would need to negotiate with countries affected by any change, and it is highly probable nations home to residents who invest in Japan would push back against such a move.
Condo contracts at risk
Some Japanese real estate agencies have taken matters into their own hands.
Mitsui Fudosan Residential Co. this month notified prospective buyers of condos under construction in Tsukishima, Tokyo, that if a unit was resold before being handed over to the purchaser, the deposit would be forfeited and the contract terminated.
In 2024, Sumitomo Realty & Development Co. decided to prohibit the resale of condos being sold in Toshima and Itabashi wards in Tokyo within five years of their handover. Any violation of this rule faces a penalty of 20% of the property’s price. All these measures are being taken without regard to the purchaser’s nationality.
“Even if the percentage of real estate acquired by foreign nationals is small, it could still have the impact of pushing up prices,” said Osamu Tanaka, executive chief economist at the Dai-ichi Life Research Institute. “Since there is no single cause, a comprehensive approach is required.”