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For those dreaming of owning a home in central Tokyo, 2025 will be remembered not just as an era of high prices, but as a year when a giant 'fortress wall' was erected.

This is because the 'okushon' (mansions costing over 100 million yen), once the exclusive domain of the wealthy, has now become the default, not the exception, in the downtown housing market.

In particular, the '2025 Metropolitan Area New Condominium Market Trends' report recently released by the Real Estate Economic Institute, a Japanese real estate research firm, clearly shows the reality of the upheaval facing the Japanese market in numbers. Amid the worst supply drought in half a century since 1973, prices have instead hit all-time highs, completely upending the traditional formula of supply and demand.

The essence of this unusual trend lies in the combination of two paradoxical variables: a record 'supply drought' and 'all-time high price renewal.' According to the survey results, the total supply in the metropolitan area in 2025 will decrease by 4.5% year-on-year to 21,962 units, the lowest level in about 52 years.

On the other hand, the average price per household soared by 17.4% to 91.82 million yen, and the unit price per square meter also rose by 18.3%, breaking all previous records. This suggests that the Japanese real estate market is undergoing a complete transformation into a 'high-end asset' market for the ultra-high-net-worth and global asset owners, going beyond simple price inflation.

The price trend in the six central wards, in particular, is reminiscent of the bubble era of the early 90s and has significant implications for Korean investors. The average price in core areas such as Chiyoda, Minato, and Shibuya reached 195.03 million yen, the highest point in 34 years since the bubble burst in 1991.

The 2.5 billion yen penthouses that have appeared in Minato and Shinjuku wards have now become symbolic indicators of how high the scarcity value of central Tokyo can soar according to the logic of capital. This price explosion further solidifies the huge barrier of the Tokyo 23 wards, forming a so-called 'insurmountable wall' for general buyers.

The solid entry barrier of the city center is naturally dispersing demand to nearby hinterlands, which is leading to an overall price increase in the surrounding areas.

In fact, as prices in the Tokyo 23 wards surged by 21.8%, prices in Kanagawa and Saitama prefectures also recorded double-digit growth rates, showing a pattern of upward pressure spreading to the outskirts.

As the 'double price' phenomenon, where the price difference between the city center and the surrounding areas is twofold, becomes entrenched, developers have made the strategic choice to increase the supply of 'fixed-term leasehold' housing, where only the building is sold without land ownership to lower initial costs, to the highest level in 17 years.

However, behind the glamorous price indicators, there is also a clear wait-and-see sentiment among market participants. The fact that the first-month contract rate fell to 63.9%, below the 70% benchmark for a booming market for the second consecutive year, shows that the current price increase is more of an 'involuntary rise' caused by supply shortages and rising construction costs rather than an explosion in demand.

In 2026, supply in outlying areas such as the Tama area and Chiba Prefecture is expected to recover significantly, but it remains to be seen whether the already high price expectations will lead to a substantial activation of transactions.

Ultimately, the current Japanese real estate market is at the end of a 'structural transition' where its character is thoroughly divided into high-end assets for high-net-worth individuals and practical residential properties for actual-demand users.

In the future, the market is expected to find a new equilibrium point as the solid asset value defense of central Tokyo clashes with the practical residential value of the outlying areas. Therefore, it is time for domestic investors to meticulously re-examine their global asset allocation strategies by carefully reading the qualitative changes in the supply structure and the map of the widening market, rather than being buried in simple price increase indicators.