As the city's skyline continues to evolve, it becomes increasingly clear that Tokyo has become a global epicenter for luxury living, captivating affluent buyers from around the world.
Driven by a perfect storm of economic factors, regional conflicts, cultural influences, and architectural innovation, Tokyo's luxury real estate market is experiencing an unprecedented surge in demand. It is transforming the city's landscape into a playground and escape for the elite, where opulence and exclusivity are the defining characteristics. The allure of Tokyo's luxury residences has transcended mere bricks and mortar, intertwining with the city's rich history, cutting-edge technology, and unique blend of tradition and modernity.
With a history that spans centuries, Tokyo has long been renowned for its harmonious blend of tradition and progress. An unwavering commitment to quality and value is building Tokyo's status as a top global destination for discerning homebuyers seeking the finest in luxury living at unbeatable prices.
Foreign investors, in particular, have been instrumental in driving demand, drawn to the city's stability, economic growth, and the potential for substantial returns on their investments.
Tokyo's luxury residences also owe their success to the integration of cutting-edge architecture and innovative design concepts. Visionary architects and developers have pushed boundaries, creating masterpieces that redefine luxury and provide a lifestyle unmatched by any other city. These residences epitomize elegance and sophistication, boasting panoramic city views, meticulous attention to detail, and a range of eco-friendly amenities designed to cater to the most discerning tastes.
Strong demand for new luxury apartments in the Tokyo area doubled the average selling price year-on-year in March 2023 and increased it by 60% in April and 48% in May, according to the Real Estate Economic Institute.
Spurred by a weak yen, regional geopolitical uncertainty, and low interest rates, post-Covid overseas and local buyers are increasingly investing in developments with homes boasting more than 100 square meters and costing $10 million-plus. One $50 million example is The Kita. Vancouver developer Westbank Corp. says that the 507-square-meter penthouse features a private rooftop infinity pool with open city views, a bespoke Rolls-Royce Dawn and more. The Kita is the first luxury multi-family project in Japan entirely designed by Kengo Kuma, who is the award-winning architect behind the Japan National Stadium, created for the Tokyo 2020 Olympic Games, and the Nezu Museum in Tokyo's Minato district.
Kuma has worked with Westbank on several projects in Canada and the US. For the Kita, he's created 11 residences, and a one-of-a-kind multi-level penthouse named The Kita Tea House, which features living space across three levels, half of which is private outdoor space. It features two private terraces and a roof deck with an infinity pool and a tea house, which Kuma will design for the buyer. The website says: "There are commanding views of the city, the nearby Eternal Forest of the Meiji Shrine, and the Meiji Jingu Museum, which was also designed by Kuma and opened in 2020."
Westbank says, "A private design session with Kuma is part of the rare design package. Buyers will be flown to Tokyo to meet the Kuma in his studio, and the residence will be designed to their exact specifications." To make the offering even more distinctive, the Tea House offering includes a Rolls-Royce Dawn convertible that was custom designed by Kuma, his first ever automotive collaboration.
Japan Luxury Lifestyle has already covered in depth other new prime developments in Tokyo such as Mori Building Co.'s Azabudai Hills 64-story project with 1,400 units including a ¥20 billion penthouse—believed to be the highest price paid for an apartment in Japan.
And one Tokyo-based real estate firm claims its luxury residential transactions have increased by about 40% since 2021, according to media reports.
Sales are also strong at Mitsui Fudosan Residential Co., Ltd. and Mitsubishi Estate Residence Co., Ltd.'s Mita Garden Hills, where one three-bedroom unit is said to be priced at ¥590 million yen ($4.1 million). The project is built on the former site of the Ministry of Communications Postal Life Insurance Building, which at about 25,000 square meters is the largest site by area for a built-for-sale condominium in the prime Minato Ward. It will house 1,002 apartments on 14 floors, ranging from 29 to 370 square meters. A 7,700 square-meter resident-only central garden will feature 130 plant varieties and services partly provided in collaboration with the Imperial Hotel will include valet, butler, porter, doorman, workspaces, gym, golf range, sauna, stone sauna, theatre room, cafe lounge, restaurant, and bar.
"The market here is very much under-supplied. That's why there's strong demand," Bloomberg quoted Tetsuya Kaneko, the head of research at real estate company Savills. "Also, inbound [tourism] and full reopening of the border helped."
One local change of mindset comes with wealthy executives from the outer suburbs of Tokyo joining younger entrepreneurs and executives to live more centrally in Shinjuku, Shibuya, and Roppongi, analysts said. Meanwhile, high net-worth clients—often paying in cash—from Hong Kong, Singapore, and Taiwan are following Alibaba Group Holdings Ltd. co-founder Jack Ma by diversifying their assets to a more stable Japan which has better value than New York and Hong Kong and few restrictions on foreign ownership.
Used properties are priced cheaper, with Toranomon Hills Residential Tower offering a three-bedroom unit overlooking Tokyo Tower for ¥890 million, according to a real estate agent website. But some real estate players sense a change in attitude by buyers in Tokyo, with more emphasis being put on capital gains than merely a place to live as is traditional in Tokyo.