Foreign residents and investors eyeing Tokyo's real estate market can expect a shift in 2025, as condominium prices are predicted to stabilize after years of dramatic increases, according to recent analysis by private research firms reported by NHK. The Tokyo condominium market has experienced unprecedented growth in recent years, with prices reaching record levels that have priced many buyers out of the market. However, 2025 is expected to bring a different dynamic. While prices are unlikely to drop significantly, the dramatic year-over-year increases seen in 2024 are not expected to continue at the same pace. According to NHK, the primary factor behind this stabilization is a reduction in the number of ultra-luxury new construction properties in central Tokyo. These high-end developments have been a major driver of overall market price increases, as they pull average prices upward even when mid-range properties remain relatively stable. With fewer of these premium projects entering the market in 2025, the overall price inflation effect will be diminished. However, expats and foreign investors should not interpret this as a signal that Tokyo real estate is becoming affordable. The market fundamentals remain strong, particularly in Tokyo's 23 special wards, where demand continues to outpace supply. The research indicates that while dramatic price increases may slow, prices will remain elevated due to persistent supply constraints. The supply-demand imbalance is particularly acute in central Tokyo neighborhoods popular with expats, such as Minato, Shibuya, and Chuo wards. The number of available units remains limited, while demand from both domestic and international buyers stays robust. This dynamic suggests that prices in these areas will maintain their current high levels throughout 2025, even if they don't surge as dramatically as in previous years. For foreign residents considering purchasing property, this market outlook presents both challenges and opportunities. On one hand, the slowing of price increases means that waiting a few months to purchase is less likely to result in being priced out of desired neighborhoods. The urgency that characterized 2024's market may ease somewhat in 2025. On the other hand, those hoping for significant price corrections should temper their expectations. The fundamental shortage of housing supply in Tokyo's most desirable areas means that prices are unlikely to decrease substantially. The market is expected to remain in a "high plateau" state rather than experiencing either dramatic increases or decreases. Investment considerations for 2025 also include broader economic factors. Tokyo Electric Power Holdings has announced plans for 11 trillion yen in infrastructure investments over the next decade, according to NHK, including expansion of power transmission networks for data centers. While not directly related to residential real estate, such major infrastructure investments signal continued economic development in the Tokyo metropolitan area, which typically supports property values over the long term. For expats planning to rent rather than buy, the stabilization of condominium prices may not immediately translate to rental market relief. Landlords who purchased properties at high prices in recent years will need to charge rents that justify their investments, keeping rental prices elevated in popular areas. Foreign residents should also consider that while new luxury construction may slow, the overall housing supply shortage in Tokyo persists. Japan's construction industry faces labor shortages and rising material costs, factors that continue to constrain new development regardless of market segment. The outlook for 2025 suggests a year of relative stability in Tokyo's condominium market, with prices maintaining high levels particularly in the 23 special wards. For expats, this means careful consideration of timing and location remains essential, but the pressure of rapidly escalating prices may ease compared to recent years.