Market analysts expect the sharp rise in real estate prices in central Tokyo to persist for the foreseeable future. Experts note that high demand from affluent buyers and overseas investors continues to support valuations, while there are currently few clear downside risks.
One perspective suggests that momentum will likely continue through the end of the year and possibly into the first half of next year. After 2026, policy decisions by the current ruling partnership between the Liberal Democratic Party and the Japan Innovation Party may influence the direction of the market. Any adjustments to housing policy or restrictions on speculative behavior remain under close watch.
Proposals such as heavier taxes or strict limits on foreign buyers are viewed as politically and economically sensitive. Industry groups caution that aggressive measures could hurt corporate performance in the property sector. As a result, large structural changes are considered unlikely in the near term.
High construction and labor costs, along with a weak yen and strong equity market, have helped sustain demand for premium residences among wealthy domestic and international buyers. Analysts see these factors continuing to provide a solid floor for prices.
At the same time, households seeking primary homes face affordability challenges. Attention is turning to the future of mortgage tax relief measures due to expire at year-end. Policymakers must balance regulatory containment with support for genuine buyers.
The entry of the Japan Innovation Party into the governing coalition has raised expectations for greater focus on the Kansai region. Initiatives such as a “secondary capital” concept could add upward pressure to Osaka-area prices. The party has also discussed targeted stamp-duty rules similar to systems used in Singapore to address non-resident speculative purchases. Observers say measures directed at non-owner-occupied acquisitions cannot be ruled out.
With the Land and Infrastructure portfolio now held by the LDP again for the first time in 16 years, the extent to which the Japan Innovation Party can shape foreign-buyer policy remains an open question. Osaka’s position as a gateway for international residents and investors also complicates decision-making, as the city seeks both economic inflows and responsible oversight.
Looking ahead, the stance of the new administration toward monetary policy will matter. Any future interest-rate hikes by the Bank of Japan could have implications for financing costs, profitability of major developers, and investor sentiment.
Foreign capital remains a key driver. A weaker yen has made Japanese assets attractive not only for condominium purchases but also for corporate acquisitions. Shareholders of large companies that hold prime urban properties have in some cases pushed for asset sales, supporting transaction volumes in the broader investment market.
However, stronger controls on foreign capital are being debated. Depending on design, restrictions could cool investment. Balancing active fiscal spending with management of external money flows presents a challenge for policymakers.
The coming months will test how the administration implements policies related to inflation relief, regional economic development, and social system reform while operating as a minority government. How real estate policy fits into these broader priorities will be closely monitored by market participants.