Possible Crackdown on Foreigners Buying Property in Japan?

Japan's Ministry of Land, Infrastructure, Transport and Tourism is preparing to launch its first-ever survey on condominium purchases by foreign nationals for investment purposes. The initiative aims to find out if foreign investors are contributing to the recent increase in prices, particularly in Tokyo, where condo prices have seen massive gains. This follows calls by some in Japan to prevent foreigners from owning property here.

According to NHK, some market analysts attribute the recent surge in condominium prices to increased foreign investment, but the Japanese government currently lacks detailed data to confirm this trend. In Tokyo, the average price of new condominium units has skyrocketed, exceeding 100 million yen (approximately $690,000 USD) in 2024, a 15% increase from 2020 figures, based on data from the Real Estate Economic Institute. Compared to other developed cities like London, New York, or Hong Kong, Tokyo was considered a place where everyone could live close to the city centre if they wished. However, this price surge has raised concerns about housing affordability for Japanese residents. Many local Japanese people are now priced out of the market in central Tokyo. For first-time buyers, living anywhere close to the centre of the city is now almost impossible on an average salary.

To address this, the land ministry will analyze condominium registry data provided by the Justice Ministry. While these registries do not explicitly indicate buyers' nationalities, the ministry plans to use owners' registered home addresses to identify foreign nationals. The survey will examine data spanning the past five years, covering approximately 110,000 transactions annually, totaling over 550,000 transactions. This comprehensive analysis will help determine the proportion of purchases by non-Japanese citizens and whether this trend is increasing or decreasing over time.

Foreign real estate purchases are legal in Japan, and international investors, particularly from China, Singapore, and other Asian countries, have shown growing interest in Tokyo's luxury condominium market. For instance, a 2023 report by the Tokyo Real Estate Association noted that foreign buyers accounted for roughly 10% of high-end condo sales in central Tokyo wards like Minato and Chiyoda. However, speculative practices—such as purchasing properties and reselling them after short holding periods—could artificially inflate prices if they become widespread.

The ministry’s survey will also explore the types of properties most commonly purchased by foreign investors, such as high-rise luxury condos versus smaller suburban units, and whether these purchases are concentrated in specific Tokyo neighborhoods. The findings are expected to provide a clearer picture of market dynamics and inform future housing policies aimed at balancing investment opportunities with affordability for Japanese citizens.

The survey is slated to begin in early 2026, with initial results anticipated by mid-2027. The ministry hopes to use these insights to develop targeted policies, potentially including restrictions on speculative reselling or incentives for affordable housing development, to ensure Tokyo’s real estate market remains accessible to its residents.