Is Tokyo Really Expensive Right Now? What Expats Need to Know in 2026
Written by Martin Zotta & Hana Smith
If you have spent any time in Tokyo as an expat, you have most certainly had this conversation. A newcomer arrives, compares the price of a bowl of ramen to what they would pay back home, and immediately concludes that Tokyo is wonderfully affordable. Another person looks at a property listing in Minato Ward and concludes the exact opposite. Both people are right, and that tension is exactly what makes Tokyo’s cost picture so easy to misread. Tokyo’s cost picture has shifted significantly in 2025-2026, and what’s true for a foreign buyer is significantly different from what’s true for a yen-earner.
Property prices are at record highs, rents have been climbing for a few years straight, and the supermarket bill looks noticeably different from what it did a couple of years ago. And yet, put Tokyo next to other large cities such as New York, London, or Hong Kong, and a very different picture emerges.
So, is Tokyo expensive? Here is what the numbers actually say.
Property Prices Have Never Been Higher
The average new condominium in Tokyo’s 23 wards costs ¥137.84 million in fiscal 2025, an 18.5% jump from the previous year and the third consecutive year above the ¥100 million mark. In the central wards- Minato, Chiyoda, Shibuya- prices per square meter have reached levels that would have seemed unlikely a decade ago.
However, here’s where it gets interesting. Put that same property on a global map, and Tokyo suddenly looks like a bargain. On a per-square-meter basis, central Tokyo costs less than half of what you would pay in Hong Kong or London. That ¥137.84 million apartment, at today’s exchange rates, would work out to roughly $851,000. In Manhattan, that buys you a studio. In Mayfair, not much more. In Tokyo, it gets you a well-located two- or three-bedroom in a good ward. Tokyo is expensive by its own history, but by global standards, it is still, for now, a good deal.
The Yen is the X-Factor
This is the factor that changes everything, depending on which side of the equation you sit on. The yen has lost around 32% of its value against the dollar over the past five years and continues to trade around ¥161–162 per USD heading into mid-2026.
For anyone earning in dollars, euros, or pounds, that weakness translates directly into purchasing power in Japan. To put it into perspective, Central Tokyo property rose roughly 45% in yen terms between 2019 and 2024, but in dollar terms, that same rise amounted to less than 5%. Years of record price appreciation end up being largely invisible to foreign buyers.
The Bank of Japan raised its policy rate to 1.0% in June 2026, the highest level since 1995, but real rates in Japan remain deeply negative. The gap between Japanese rates and those in the US and Europe continues to put downward pressure on the yen. Major banks see it potentially weakening further before any sustained recovery. For expats, this creates a window. Whether you are thinking about buying, building savings in Japan, or simply making sense of your monthly budget, understanding the yen’s role in your financial picture is foundational. If you have not revisited your currency strategy recently, now is a good time to do so.
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Rents Are Rising Fast, Especially in Central Wards
If you’re renting in Tokyo right now, you’ve probably already felt it. The rental market has now experienced more than two years of consecutive monthly rent increases, with little sign of slowing down. It’s becoming increasingly common for clients to tell us they’ve decided to buy a home rather than renew their lease after discovering that their landlord plans to raise the rent significantly. In many cases, the increase is large enough that continuing to rent simply no longer makes financial sense.
Average rents across the 23 wards rose between 6.5% and 8% in 2025 compared with the previous year. In the most central areas, Azabu, Hiroo, Roppongi, and Ebisu, some pockets have seen closer to 10% year-on-year.
This is the single most important shift in the rent-versus-buy conversation for expats right now. The rental costs many people locked in a few years ago look increasingly attractive in hindsight, and those who bought at that time are watching their equivalent rental costs rise every year while their mortgage payments stay largely flat. It is not a universal argument for buying, but it is a calculation worth running carefully. Our Rent or Buy Calculator is a good place to start.
Supply Has Hit a 50-Year Low
One of the clearest structural forces driving Tokyo’s market right now is the near-historic shortage of new supply. According to the Real Estate Economic Institute, new condominium completions across greater Tokyo fell to 21,659 units in fiscal 2025, the lowest annual figure since single records began in 1973. Construction costs have risen sharply, labor is scarce, and land in central wards is simply running out.
The result is that developers are building less, and what they do build is increasingly skewed toward the luxury end of the market, where margins justify the cost. This has pushed buyers who cannot find new stock into the secondary market, where resale prices have risen for 20 consecutive months. Even older properties in established neighborhoods that once sat underpriced are attracting competitive offers.
This isn’t temporary and is unlikely to be resolved quickly. For buyers, that does not mean rushing into the wrong property; it means being clear about what you want, understanding the resale and rental dynamics of any specific area, and working with people who know this market well.
Daily Life Has Gotten More Expensive. But Tokyo Still Has Advantages
Beyond property, day-to-day life in Tokyo has become noticeably more expensive. Japan’s food inflation hit approximately 7% in 2025, and anyone doing a regular supermarket run has noticed. Rice prices in particular were volatile, affected by a combination of poor harvests and import costs. Consumer prices have risen broadly over the past year, while wages have grown more slowly, meaning purchasing power for yen earners has dipped.
At the same time, Tokyo has huge advantages that cities like London, New York, or Sydney simply cannot match. Public transport in Japan is exceptional and inexpensive, with a monthly commuter pass rarely exceeding ¥15,000. Healthcare remains subsidized and affordable. Eating out locally; ramen shops, teishoku lunch sets, and neighborhood izakayas; is genuinely extraordinary value compared to the inflated bills and obligatory 20% tip that have become standard in most Western cities.
Beyond affordability, Japan is one of the highest-trust, lowest-crime societies in the world. The World Population Review ranks Tokyo the number one safest city globally, and that safety is felt in small, everyday ways that quietly become one of the things expats value most. You will find elementary school children walking to school alone, running errands at the convenience store, and taking the train unaccompanied. It sounds unremarkable until you realize how rare it is elsewhere in the world and what it means for families with young children.
For all of Tokyo’s advantages, though, expat families do face real budget pressure in two specific areas: rent and international school fees, which can run ¥2.5 to ¥4 million per child per year. Factor these alongside rising grocery bills, and the importance of structured financial planning becomes considerably clearer than it might have felt a few years ago.
What This Means for You
Yes, Tokyo real estate has gotten more expensive, but for what you get, it is still good value compared to other major global cities. Prices are rising, and the market is moving faster, which means being a bit more strategic than before pays off. It also means that working with the right team matters more than ever when purchasing or selling your property.
At Argentum Wealth, we don’t just offer consultation; we support you through the entire process, starting with a financial review of your situation before even starting the property search. We can then help you source the right property, buying or selling property in Japan, from budgeting and financing through to finding the right property and closing the deal.
If you’d like help, get in touch for a free initial consultation, and take a look at our other resources, including our Mortgage Calculator, Rent or Buy Calculator, and article on The 9 Steps to Buying Property in Japan.
Argentum Wealth does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
Argentum Wealth Management is licensed through the Japanese Financial Services Authority to give financial advice. The FSA strongly recommends that you only receive financial advice and services from a locally licensed and regulated firm.
Frequently Asked Questions
Is Tokyo more expensive than New York, London, or Hong Kong?
Not on a per-square-meter basis. Central Tokyo property costs less than half of what you would pay in Hong Kong or London. A ¥137.84 million apartment in Tokyo works out to roughly $850,000, a figure that would buy you a studio at best in Manhattan or Mayfair. Tokyo is expensive by its own history but remains competitive by global standards.
Is now a good time to buy property in Tokyo as an expat?
For those earning in foreign currencies, the combination of a historically weak yen and rising rents makes the case for buying more compelling than it has been in years. That said, strategy matters and the right property in the right area is key. Speaking with a financial advisor before committing is strongly recommended.
Why is the yen so weak, and how does it affect me as an expat?
The yen’s weakness is largely driven by the interest rate gap between Japan and the US and Europe. The Bank of Japan’s policy rate is 1.0%, while US rates remain significantly higher, encouraging investors to move money out of the yen. For expats earning in foreign currencies, this means your salary buys considerably more in Japan than it did five years ago, but it also means yen-denominated savings are losing real value over time.
Are rents in Tokyo still rising in 2026?
Yes. Tokyo’s rental market has seen over two years of consecutive monthly growth, with average rents across the 23 wards rising between 6.5% and 8% in 2025 compared to the year before. Central areas such as Azabu, Hiroo, and Roppongi have seen even sharper increases in some pockets. There are no strong signals that this trend is about to reverse.
How safe is Tokyo compared to other major cities?
Tokyo is ranked the number one safest city in the world by the World Population Review — and that safety is tangible in everyday life. Crime rates are exceptionally low, and the city operates on a level of public trust that is rare globally. For families, it is one of Tokyo’s most underrated advantages compared to cities like New York, London, or Sydney.
What are the biggest costs expat families should plan for in Tokyo?
Beyond rent, the single largest expense for expat families is typically international school fees, which can run ¥2.5 to ¥4 million per child per year. Combined with rising grocery bills and rent that has climbed significantly over the past two years, structured financial planning is more important now than it has been for some time.
What should I do if I am unsure whether to rent or buy in Tokyo right now?
The rent-versus-buy calculation has shifted considerably in recent years, and the right answer depends on your timeline, income structure, and broader financial goals. A good starting point is our Rent or Buy Calculator. From there, speaking with one of our advisors can help you understand exactly where you stand and what makes sense for your specific situation.
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