3 Key Points to Understand This Article
- Gap Between Price and Liquidity: Sales numbers are booming across the region, but price increases are now limited only to central Tokyo. In surrounding areas, transaction prices have started to drop.
- Shift from Condos to Houses: Condo prices per square meter are near the 1990 bubble peak. Buyers who cannot afford condos are rushing to buy cheaper used detached houses.
- Inventory Polarization: Condo inventory is shrinking (Seller’s Market), but used house inventory is growing. The market is selecting which assets are “sellable” and which will remain as stuck inventory.
Chapter 1: Overheating Market and the “Two Ceilings”
The data for the Greater Tokyo real estate market in December 2025 looks extremely active. Sales of pre-owned condominiums increased by 25.9% year-on-year, and sales of pre-owned detached houses jumped by an incredible 59.0%. Both have been growing for 14 months in a row.
However, we should not simply think, “The real estate boom is back.” There are “ceilings” hitting the market: a price ceiling and a buyer budget ceiling.
The average price per square meter for used condos in Greater Tokyo reached 850,800 JPY (up 9.0%), rising for 68 consecutive months. This level is very close to the historic peak of September 1990. This high price is stressing the buyers. Interestingly, the average size of sold units decreased by 0.7%. This shows that to keep the total price affordable, buyers are forced to choose smaller rooms.
Chapter 2: The Big Shift to Detached Houses and Price Adjustment
The skyrocketing condo prices have caused a major shift in buyer behavior. This explains the explosion in used detached house sales (+59.0%).
The important point is that the average transaction price for these houses dropped by 1.0% year-on-year. This is the first drop in three months. In contrast, the asking price (inventory price) is up 4.4%. This gap shows that buyers cannot follow the sellers’ high hopes.
Buyers are running away from the condo market to the house market, but their budget is not unlimited. As a result, only the houses that lower their prices are selling in high volume. This is not a “positive boom”; it is “flight demand” caused by a high-cost environment.
Chapter 3: The Split Between “Winners” and “Losers” by Area
The most harsh reality of this data is the polarization based on location. The market is no longer rising everywhere.
Tokyo 23 Wards (Central Area)
The price per sqm for condos is up 15.1%, and house prices are up 13.5%. The uptrend is still strong. Even at high prices, there is real demand here. Assets here are holding their value.
Surrounding Areas (Saitama, Chiba, Kanagawa)
In contrast, the surrounding prefectures are facing a correction.
- Saitama: Condo unit price -4.2%, House price -1.5%
- Chiba: House price -8.2%
- Kanagawa (excluding Yokohama/Kawasaki): Condo unit price -1.3%, House price -8.5%
In these areas, the number of deals is increasing massively (e.g., Saitama houses +84.2%), but prices are falling. This means the structure has changed to: “If you don’t lower the price, you cannot sell.” Central Tokyo is a market where “High prices still sell,” while the suburbs have become a market of “Low prices needed for liquidity.”
Chapter 4: Inventory Risks and Future Liquidity
The inventory data, which predicts the future balance of supply and demand, also shows a distortion.
Inventory for used condos decreased for 5 months in a row (-3.6%). This suggests a shortage of supply, especially in central Tokyo. It is still a seller’s market for condos.
On the other hand, inventory for used detached houses increased by 1.2%, even though sales exploded. This means there are many unsold “leftover” properties and many new sellers trying to exit. In the suburban house market, there is a risk that inventory will pile up further, creating more pressure to cut prices.
Chapter 5: Conclusion – Redefining “Location” and “Cost”
The market movement in December 2025 signals the end of the “general rising phase.” We have entered a completely “selective market.”
With inflation and high construction costs, the supply of new properties is limited, so people must rely on the used market. However, the buying power of ordinary people has reached its limit. Outside of prime central locations, properties cannot be sold without price adjustments.
In the future market, only two types of assets will maintain value: “Central Tokyo properties where demand never dies” or “Suburban properties priced cheaply enough for real users.” Overpriced suburban homes and uncompetitive old houses are at high risk of becoming “dead stock.” Investors and owners must re-evaluate their exit strategies based on strict location analysis.
Japanese version 2025年12月 首都圏不動産市場：取引激増の裏で進む「価格崩壊」と「二極化」の真実 （REINS)
