Rise in Benchmark Land Prices: ¥100 million Condo Units Have Become Norm in Tokyo

Editorial

14:59 JST, September 29, 2025

Reflecting the economic recovery, increases in land prices are taking hold in regional areas too. Meanwhile, condominium prices exceeding ¥100 million per unit have become commonplace in central Tokyo, indicating signs of overheating. Caution is required.

The benchmark land prices announced by the Land, Infrastructure, Transport and Tourism Ministry as of July 1 showed a 1.5% year-on-year increase in the national average for all land use categories. This marks the fourth consecutive year of growth since 2022, the largest increase in 34 years. Prices for residential land rose 1.0%, while commercial land prices increased 2.8%.

Demand for land for condominiums remains strong, particularly in major metropolitan areas. Demand for land for hotels, driven by an increase in inbound tourists, has also been robust.

Japan is in the process of transitioning to an economy in which both prices and wages rise. It is desirable for land prices to also rise gradually in line with such an economic shift.

The fact that land price increases are becoming the norm even in regional areas likely indicates that the benefits of the economic recovery are spreading. If corporate and household sentiments improve through the increased value of their assets, it is expected to lead to a virtuous cycle in the economy.

Building new factories is also pushing up land prices. In Chitose, Hokkaido, home to the Rapidus Corp. factory that aims to domestically produce next-generation semiconductors, some commercial land saw price increase rates ranking among the top one to three nationwide. It is clear that domestic investment can act as a catalyst for revitalizing regional economies.

However, signs of overheating in some areas are cause for concern.

In Tokyo’s 23 wards, residential land prices rose by 8.3%, a significantly higher level than elsewhere in the country.

The average price of new condominiums sold in the first half of this year rose 20.4% year-on-year to ¥130.64 million. The average price of second-hand condo units also exceeded ¥100 million for four consecutive months through August. This makes them unaffordable for most.

There are voices of dissatisfaction that only the wealthy can afford to live in metropolitan areas. The current situation, in which condominium prices have risen beyond the reach of ordinary citizens, cannot be considered healthy.

If the burden of housing loans increases, that could strain household finances and potentially dampen efforts to achieve a growth-oriented economy in which both prices and wages rise.

Reasons cited for the surge in condo prices include not only rising land prices but also increased construction costs, resales by the wealthy and foreign nationals, and purchases for investment purposes. There are also reportedly cases in which the units are not actually occupied.

The ministry is investigating the actual state of real estate transactions using registration information. It is imperative that the ministry thoroughly investigate trends in land prices and the situation regarding speculation, and urgently come up with measures to curb excessive housing prices.

Monitoring of excessive speculative activity should also be strengthened.

(From The Yomiuri Shimbun, Sept. 29, 2025)