Tokyo homebuyers divided on purchase plans as living costs soar

(Bloomberg) — Japan’s bout of inflation is cutting both ways in the Tokyo housing market.

Potential homebuyers in Tokyo are divided on their property purchasing plans as surging living costs add to affordability concerns, according to a Bloomberg Intelligence survey. Some are delaying purchases while others are wary of missing out on opportunities posed by rising home prices.

About a third of respondents to the survey said they plan to postpone purchases of real estate in Tokyo, while nearly a third said they are expediting plans to buy a home. People who preferred to wait cited personal circumstances and the rising cost of living as their main reasons, while those who were bringing forward plans to buy said they were afraid of prices climbing even more.

Bloomberg Intelligence asked 1,000 respondents who were planning to buy a home in central Tokyo in the next two years. It conducted the survey during a two-week period in September and October.

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Home prices in Tokyo have been on a broad upward trend, driven by swelling construction costs and a limited supply of new buildings. Sales of luxury properties in central Tokyo have also skewed average prices higher.

The average sale price of new condos in the city’s central areas rose 20.4% in the first half of 2025 to a fresh record of ¥130.6 million ($865,000), according to the Real Estate Economic Institute.

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Prices have been going up even after the Bank of Japan abandoned its negative interest-rate policy last year and hiked rates two more times, causing the market’s rock-bottom mortgage rates to finally rise. Most Japan mortgages are floating-rate loans, and these days are still advertised as low as 0.50%.

While wages in Japan are increasing, they haven’t kept up with inflation. Consumer prices climbed 2.7% in August from a year earlier, outpacing wage growth of 1.5%.

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“Such differentials indicate eroding household disposable income, weakening purchasing power,” BI analysts Patrick Wong and Yan Chi John Wong wrote in a note accompanying the survey.

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