Property price surge in Tokyo's prime areas sparks calls to curb foreign ownership

Brooks | Afp | Getty ImagesIn Tokyo's Shibuya district, towering skyscrapers and luxury condominiums symbolize Japan's urban real estate frenzy — with prices surging in recent years.In 2024, the average price of new condos in the 23 municipalities at the heart of Tokyo hit 111.81 million yen ( $760,000), according to Real Estate Economic Re Institute's report earlier this year

Un countries such as Australia, Canada and Singapore, Japan has virtually no restrictions on foreign perty ownership.The Democratic Party for the People or DPFP, which secured solid gains in the July elections, is expected to table a bill curbing foreign real estate purchases as early as the autumn extraordinary Diet session, according to local media

DPFP leader Yuichiro Tamaki has argued that prices in urban areas have soared partly due to overseas investors buying perty for non-residential, speculative purposes, and has floated the idea of a "vacancy tax" to curb such acquisitions.watch now6:4006:40Japan is back at revolving-door prime ministers; Ishiba's PM days are numberedSquawk Box AsiaMeanwhile, Sanseitō, a right-wing populist party campaigning on a "Japan First" anti-immigration platform, is also preparing its own posal to curb foreign land acquisition but has not yet specified a timeline for submission.With the ruling coalition lacking a majority in both houses of the Diet, the positions of opposition parties have become increasingly critical in shaping legislative outcomes.Tobias Harris, founder of political risk advisory firm Japan Foresight, said it was hard to separate foreign perty ownership from broader debates Japan's foreign population

While not the centerpiece of Sanseitō's platform, he said the issue stands out because it offers a er legal path for action versus other issues."The party's rhetoric on the issue has emphasized both national security and economic security, hinting at the dangers of certain foreigners buying perty and also the impact on Japanese quality of life if they can't afford houses."The exact scale of foreign buying is hard to pin down, as Japan does not publish official statistics on buyer nationality, but a semiannual survey by Mitsubishi UFJ Trust & Banking Corp, published in March 2025, found that in Tokyo's Chiyoda, Shibuya, and Minato wards, 20% to 40% of new apartments are typically sold to foreign buyers."Foreigners buying is one factor, but domestic investors and residents are also buying," said Makoto Sakuma, senior reer at Japanese think tank NLI Re Institute.Sakuma noted that although the Bank of Japan has raised interest rates since March last year, they remain low in real terms and ample liquidity is still circulating in the market with much of it flowing into urban perty.Harris said the outlook for any legislative change depends on Japan's political landscape

A new prime minister or shifting coalition dynamics could reshape how opposition parties put issues foreign ownership on the agenda.Romeo Marcantuoni, a doctoral candidate at Waseda University who focuses on Japanese opposition , said the salience of the issue moving ahead is unly to fade, noting that Sanseito has ramped up its rhetoric on foreigners and foreign capital since winning three Lower House seats last year.Still, he noted the legislative path is uncertain, as more pressing priorities, such as tax cuts, cash handouts, and a gasoline levy is ly to dominate discussions in the near term.Urban-rural divideWhile Tokyo's population continues to rise, Japan's overall population has been declining since 2008, creating a sharp gap in demand between urban and rural areas.And while there has been a perty boom in major cities, the country had 9 million abandoned s, known as akiya, as of 2023, primarily in rural regions.watch now3:3103:31Buying a vacant house in Japan: do it for passion, not fit, says expertSquawk Box AsiaAlthough akiya can be purchased cheaply, they don't match the needs of many domestic buyers

Cultural stigma around secondhand s and limited government support for revitalization further limit their appeal."When you look at the countryside, we have a huge blem with stagnation, prices are not rising and houses are not selling," said Parker Allen, co-founder of Akiya & Inaka, a real estate platform helping overseas buyers find and revive vacant houses in rural Japan.Akiya hold little appeal for most Japanese, but they have been catching the attention of foreign buyers seeking lower prices, traditional architecture, and the romance of restoring an old

Allen warns that any potential restrictions on foreign perty ownership should be aimed only at metropolitan where competition with locals is fiercest."The most logical way is to focus on the cities," he said. "If foreign buying is accelerating, it could price some people out of the market — but we're talking here only the Fifth Avenues of Japan."