Tokyo home-buyers shift to compact houses as apartment prices surge

Home-buyers in the Tokyo metropolitan area are increasingly choosing compact detached houses over apartments due to soaring real estate prices ^[1].

This shift marks a significant change in urban living preferences as the cost of traditional condominiums becomes prohibitive for many residents. By opting for smaller detached homes, buyers can maintain proximity to city centers and transit hubs without the premium associated with high-rise developments.

The trend is driven by a stark disparity in price growth. Average prices for used apartments in Tokyo’s 23 special wards now exceed ¥120 million ^[1]. Meanwhile, new apartments in the capital region have seen year-on-year price increases of more than 20% ^[1]. In contrast, the price of new detached houses in the same region has risen by only 4.6% ^[1].

These compact homes typically offer roughly half the floor area of a standard apartment but are designed to maximize living space [1, 2]. This efficiency makes them a viable alternative for those priced out of the luxury apartment market. National average land prices have also risen for five consecutive years, further tightening the market ^[1].

The demand is not limited to entry-level buyers. Approximately 25% of high-income households earning an annual income of ¥10 million or more are now shifting their interest toward detached houses ^[5].

Maezawa Satoshi, a public relations representative for Open House Group, said more people are moving toward detached houses because they cannot reach their budget targets when searching for apartments. He said for those seeking locations near stations or in the city center, compact housing has become a realistic solution ^[1].