New condominium supply in the Greater Tokyo area has fallen to its lowest level in more than five decades, even as housing prices continue to hover near record highs, underscoring a growing imbalance between supply and affordability in Japan's capital region.
According to the Real Estate Economic Institute, just 1,425 new condo units were released for sale across Tokyo, Kanagawa, Saitama, and Chiba in March 2026, marking a 35.5% decline from a year earlier. The drop ended a brief rebound and reflects a broader slowdown, with all regions except Kanagawa posting year-on-year contractions.
For the full fiscal year ending March 2026, total supply stood at 21,659 units, down 2.6% from the previous year and marking the fourth consecutive annual decline. The figure represents the lowest level since records began in 1973, a sharp contrast to the market's peak of over 95,000 units in 2000.
Prices Remain High Despite Short-Term Dip
While supply has tightened, prices remain resilient. The average condominium price in March slipped slightly by 0.7% year-on-year to ¥104.13 million (about $700,000), the first decline in nearly a year. Analysts attribute the dip largely to a high comparison base in 2025, when luxury developments in central Tokyo pushed prices higher.
Despite the marginal decline, average prices have stayed above ¥100 million for two consecutive months, reflecting sustained demand for high-end properties. On a per-square-meter basis, prices continued to climb, extending an 11-month streak of increases.
Looking at the broader trend, the full-year average price reached ¥93.83 million, up 15.3% from the previous year and marking the fifth consecutive annual increase. Per-square-meter prices rose for the 14th straight year, setting new record highs.
Central Tokyo Leads Price Surge
The imbalance is even more pronounced in central Tokyo. In the city's 23 wards, the average condo price climbed to ¥137.84 million for the fiscal year, rising 18.5% and exceeding the ¥100 million mark for a third consecutive year.
In the six core wards — including Chiyoda, Minato, and Shibuya — March prices averaged ¥182.83 million, highlighting the continued concentration of demand in prime urban districts.
Outside central Tokyo, prices also rose across all regions, with Chiba posting the largest annual increase at 21.8%, suggesting that spillover demand is pushing buyers into suburban markets.
Weakening Demand Signals Emerging
Despite rising prices, market momentum appears to be softening. The first-month contract rate — a key indicator of buyer demand — stood at 64.5% in March, well below the 70% threshold typically seen as a benchmark for healthy market conditions. This marks the third consecutive year that the annual rate has failed to reach that level.
Sales performance for high-rise developments has also deteriorated sharply. In March, the contract rate for towers above 20 floors dropped to 62.6%, down significantly from 93.9% a year earlier. Notably, no projects sold out on their launch day during the month.
Meanwhile, unsold inventory rose compared with a year earlier, indicating a gradual buildup of supply that has yet to find buyers, even as new construction slows.
Outlook: Limited Supply, Persistent Price Pressure
Looking ahead, developers are expected to release around 1000 units in April, a level broadly in line with recent years but far below historical norms.
The data points to a structural shift in Tokyo's housing market: fewer new projects, higher construction and land costs, and a continued tilt toward premium developments. While supply constraints have supported prices, weakening demand indicators suggest that affordability pressures may increasingly weigh on future market activity.
