Tokyo Land Prices Continue to Rise in 2025

On September 16, 2025, the Tokyo Metropolitan Government released its official land price survey as of July 1.（→東京都基準地価格（東京都財務局））

The average price across all uses rose 7.7% year on year, marking the 13th consecutive annual increase and surpassing the previous year’s growth rate of 6.0%.

Commercial land values climbed 11.2% overall (13.2% within the 23 wards).
Among them, Asakusa stood out with a sharp 27.4% increase, driven by inbound tourism and a wave of hotel construction.
Other fast-rising areas such as Ginza and Tsukiji also saw growth supported by new luxury condominiums and hotel developments.

The Role of Foreign Investment

So why are land prices rising so strongly?
A key driver is foreign capital flowing into the market.

As reported by the Nikkei on September 17, 2025: “‘Tokyo remains undervalued, attracting foreign investors; weak yen and low interest rates provide a tailwind; rents still 80% of New York levels.’”（『「割安」東京、外資引きつけ　円安・低金利が追い風　賃料、NYの8割』）

According to real estate services giant CBRE, overseas investors poured ¥1.14 trillion into Japanese real estate in the first half of 2025.
Office rents in Japan remain relatively inexpensive compared to other global cities, and the weak yen combined with low interest rates has further supported investment.
The “yield gap” (rental yields minus long-term interest rates) also remains high, making Tokyo particularly attractive to global investors.

In other words, even as prices rise, Tokyo is still seen as a city with strong investment potential.

Risks Behind the Price Surge

Continued increases in land prices and rents could make it increasingly difficult for workers to live in central Tokyo.
Concerns such as “Rents are too high — I can’t afford to live in the city center” are likely to become more common.

At the same time, relatively affordable rental properties in central and station-adjacent areas are expected to see even stronger demand.
If the shortage of reasonably priced housing worsens, government intervention or tighter regulations could become a topic of debate.

Opportunities for Investors

Yet for investors, new opportunities are also emerging.

Interest in accommodation facilities catering to inbound tourism is rising, and we are receiving more inquiries about hotels, short-term rentals, and guesthouses.
In particular, properties near stations with good access to airports, or in historic neighborhoods with traditional streetscapes, are attracting attention.
Around major tourist destinations and transportation hubs, demand for lodging facilities is likely to grow further.

At the same time, supply of rental housing in urban areas remains insufficient.
Developing new apartment buildings on land near train stations, or renovating and revitalizing older properties, are both sectors where long-term, stable demand is expected.

Beyond these, there are also niche opportunities unique to Tokyo:

  • AKIYA (vacant houses): old, underused properties that can be renovated into income-producing assets.
  • MINPAKU (short-term rentals): properties targeting inbound visitors, especially in tourist hubs.
  • Non-rebuildable houses: often overlooked, but when carefully renovated they can deliver attractive yields at a relatively low entry cost.

Together, these segments highlight the diverse strategies available for investors looking to capture both short-term growth and long-term stability in Tokyo’s real estate market.

Invest in AKIYA
Renovate in Tokyo

At Ai Construction, we help investors capture these opportunities through fire-resistant wooden apartment development, large-scale renovations, and tailored solutions for unique property types.

If you’re considering investing in Tokyo real estate, whether through new construction or the transformation of existing properties, contact us below !