In 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 (about $760,000), according to Real Estate Economic Research Institute’s report earlier this year.  The median price — a better gauge of the market — was 89.4 million yen, up 9% from a year earlier.

On a median basis, condo prices in Tokyo’s 23 wards jumped about 64% from 2021 to 2025, far outpacing the 26% rise across the greater Tokyo area.

Meanwhile, Japan’s income levels remain low compared with several of its developed peers, with weaker minimum wage and one of the widest gender pay gaps, making affordability a concern. In 2024, Japan ranked 25 out of 34 members of the Organization for Economic Cooperation and Development ranked on a purchasing power parity–adjusted, average annual wages basis, at $49,446.

Property prices in Tokyo’s prime districts have soared, fueled in part by rising construction and labor costs, and as a weak yen and comparatively low valuations draw overseas investors.

The urban property boom has attracted political attention, with discussion around foreign capital restrictions featured during the recent Upper House elections. Unlike countries such as Australia, Canada and Singapore, Japan has virtually no restrictions on foreign property 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 home prices in urban areas have soared partly due to overseas investors buying property for non-residential, speculative purposes, and has floated the idea of a “vacancy tax” to curb such acquisitions.

Meanwhile, Sanseitō, a right-wing populist party campaigning on a “Japan First” anti-immigration platform, is also preparing its own proposal 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 property ownership from broader debates about Japan’s foreign population. While not the centerpiece of Sanseitō’s platform, he said the issue stands out because it offers a clearer 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 property 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 researcher at Japanese think tank NLI Research 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 property.

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 like foreign ownership on the agenda.

Romeo Marcantuoni, a doctoral candidate at Waseda University who focuses on Japanese opposition politics, said the salience of the issue moving ahead is unlikely 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 likely to dominate discussions in the near term.

While 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 property boom in major cities, the country had about 9 million abandoned homes, known as akiya, as of 2023, primarily in rural regions.

Although akiya can be purchased cheaply, they don’t match the needs of many domestic buyers. Many are in disrepair, located far from jobs and services, or require renovations costing $20,000 to $300,000, depending on the property’s state and location. Cultural stigma around secondhand homes and limited government support for revitalization further limit their appeal.

“When you look at the countryside, we have a huge problem 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 home. Allen warns that any potential restrictions on foreign property ownership should be aimed only at metropolitan markets 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 about the Fifth Avenues of Japan.”