Tokyo condo prices in central districts like Toyosu and Kachidoki fell 0.6% in January, ending a five-month uptrend, per FJ Realty Inc. data. Rising interest rates, inflation, and new regulations targeting foreign buyers are dampening demand. Overseas investors, particularly from China, have retreated since late 2022 amid tighter visa rules under PM Sanae Takaichi’s administration, which is exploring curbs on foreign property acquisitions. ¥120 million ($757,500)—the price threshold for family condos—has become a psychological barrier, with even high-earning households hesitating to purchase.

Tomohiro Makino of Oraga Research Institute noted that dual-income professionals, once aggressive buyers, now avoid the market due to loan rate fears and subdued capital gains. Gross yields of 2% on rental properties also make real estate less competitive versus other investments. While February saw a brief 1% rebound, oversupply from simultaneous listings has pressured sellers.

Tokyo Kantei Co.’s upcoming February data could confirm a 37-month low, signaling prolonged market cooling.