New condominium prices have long been a hot topic, as many buyers are simply priced out.
Adding to the challenge, supply is shrinking due to limited land in central Tokyo and intense competition for development sites.
According to the Real Estate Economic Institute, the number of new condominiums sold in Tokyo’s 23 wards in 2024 was only 8,275 units — down 30.5% from the previous year.
As a result, buyers who could not secure new units are now shifting into the pre-owned condominium market, driving prices higher.
Does this mean real estate investment in Tokyo is no longer feasible?
Not necessarily.
While ownership has become harder, strong demand for rentals remains.
Many still prefer to live in central Tokyo, even at higher rents.
Prices are soaring in core wards such as Chiyoda, Chuo, Shinjuku, Bunkyo, and Shibuya.
At the same time, other popular “residential cities” such as Yokohama, Saitama, and Chiba have seen price declines.
This suggests an increasing polarization between investment-driven areas and general residential areas.
2025: What should real estate investors do?
One key factor that cannot be ignored is the gap between rising construction costs and slower rental growth.
As the Nikkei reported on May 5, 2025:
“While construction costs continue to rise, rent growth has been moderate, making profitability more difficult.”
In other words, simply building on ordinary land no longer guarantees attractive yields.
So, where are the real opportunities?
If you build new: Target “difficult plots”
One strategy is to acquire land that others tend to avoid — irregularly shaped sites or narrow-access roads.
Ai Construction particularly recommends these “challenging plots.”
For example, on narrow roads (less than 4m wide), heavy machinery access is limited, making non-wooden structures impractical.
Fireproof wooden construction, however, can be built even under such strict site conditions.
In dense urban areas with narrow frontage, deep lots, L-shaped or flagpole plots, wooden structures — with their lighter materials and flexible design — offer unique advantages.
If you buy used: Revitalize with renovation
New condominiums are increasingly expensive and scarce, but older properties are relatively more affordable.
Through renovation, they can regain value and attract strong rental demand.
In central Tokyo, the desire to “live in the city even at higher rents” remains strong. For rental owners, whether or not a property has been renovated significantly impacts occupancy speed and achievable rent levels.
At Ai Construction, we handle many projects for houses and condominiums over 40–50 years old.
No matter how old, interiors can be transformed to look like new.
Build new or renovate? The best choice depends.
Every property is different. Some are better suited for redevelopment, others for renovation.
At Ai Construction, we bring extensive experience in both — from mid-rise wooden apartment buildings to “photo-ready renovations” designed to maximize rental appeal.
Whether you are planning to develop a new investment property or seeking strategies to reduce vacancies, we are here to support your goals.
Contact us today to explore the best option for your property !