※ This article is for informational purposes and personal analysis only—not investment, legal, tax, or immigration advice, and not a recommendation to buy or sell any property or financial product. Verify figures, rules, and market data against official sources and consult qualified professionals; you are solely responsible for your decisions. Information reflects the time of writing and may change afterward.
All market figures in this article are as of April 2026. I provide 100% fact-based data (verified: true) cross-checked through original reports from the Real Estate Economic Institute, REINS, NTA, MLIT, and the BOJ, utilizing NotebookLM.
”Should I buy a new or pre-owned mansion?”
This is the most common question I get during Japan real estate investment consultations.
I currently live in a pre-owned mansion in Nihonbashi, Tokyo. It’s a bit older, but I can freely use four different subway lines within a 10-minute walk. I also enjoy easy access to the local library, supermarkets, hospitals, and various government offices as part of my daily routine.
The benefit that city dwellers are most enthusiastic about is Shokuju Kinsetsu (職住近接) — living close to your workplace. The commuting time saved is dramatically reduced and directly translates into ‘real money’ that enriches my personal and family life. Living right in the center of the city, I experience the powerful value of this infrastructure and time every single day.
Knowing the intrinsic value of city living, my answer to the “what to buy” question is always the same: “It depends on your investment goals and how you value time. However, in this current market, you must coldly look at what the data is pointing to.”
Today, I want to blend the warm perspective of a resident waking up in Nihonbashi every morning (30%) with the sharp, data-driven eye of an investor analyzing the latest April 2026 market indicators (70%). I’ll break this down across five pillars: price trends, depreciation, repair reserve funds, liquidity, and interest rate risks.
1. Price Comparison: The Price Gradient from the Greater Tokyo Area to the Core 6 Wards
The foundation of real estate investment is location. To understand the Tokyo and Greater Tokyo market, a ‘drill-down’ approach—narrowing down from a broad area to the city core—is essential.
Average Price of New Mansions by Region (April 2026)
While the overall average for the Greater Tokyo Area hasn’t surpassed Seoul, the price structure looks like a steep staircase as you move toward the city center.1
- Greater Tokyo Average: 87.36 million JPY (Includes Kanagawa, Saitama, Chiba)
- Tokyo 23 Wards Average: 124.98 million JPY
- Core 6 Wards Average: 224.26 million JPY (Chiyoda, Chuo, Minato, Shinjuku, Bunkyo, Shibuya)
The average price for a new mansion in the Core 6 Wards—which includes my neighborhood Nihonbashi, Ginza (Chuo Ward), and Marunouchi (Chiyoda Ward)—has reached a staggering 224 million JPY. The Greater Tokyo average is only good for grasping the overall trend. If your goal is to live or invest in central Tokyo, you must base your financial planning on the actual, significantly higher prices of the Core 6 Wards and the 23 Wards.
Greater Tokyo Market Trends (New vs. Pre-owned)
| Indicator | New Mansions | Pre-owned Mansions |
|---|---|---|
| Supply / Transactions | 1,163 units (Released) | 3,903 cases (Contracted, -1.2%) |
| Average Price | 87.36M JPY (+24.6%) | 53.21M JPY (+5.4%) |
| Price per ㎡ | 1.306M JPY | 859.3K JPY (+5.9%) |
| Market Vitality | Initial Month Contract Rate 62.3% (-4.0%p) | Tokyo Wards: 72 consecutive months of ㎡ price growth |
| Inventory | 6,313 units | 45,215 cases (+2.7%) |
Source: Real Estate Economic Institute PDF p.11, REINS Summary PDF p.1~32
Here are the facts we can extract from the data:
- New Mansion Contract Rate is 62.3%: Generally, a rate above 70% is considered the benchmark for ‘strong sales’. The 62.3% figure represents a 4.0 percentage point drop year-over-year.
- Tokyo Wards Pre-owned ㎡ Price Up for 72 Consecutive Months: According to REINS data, the price per square meter for pre-owned mansions in the Tokyo 23 Wards stands at 1.374 million JPY (+10.1%), continuing an upward trend for 72 straight months.
- Increase in Pre-owned Inventory: The pre-owned inventory in the Greater Tokyo area has increased to 45,215 properties (+2.7% YoY). This can be interpreted in several ways, such as profit-taking listings appearing due to price surges in the city center, or the heat from the core spreading to the outskirts.
2. Depreciation: Where New and Pre-owned Diverge in Taxes
Depreciation is the most crucial tax-saving tool in Japanese real estate investment. What investors must pay special attention to is the difference in how the ‘useful life’ (耐用年数) is calculated between new and pre-owned properties.
The Straight-Line Method (Current Standard)
For buildings acquired after April 2016, only the straight-line method is applied. This means you deduct the exact same amount as a depreciation expense every year.5
New RC (Reinforced Concrete) is 47 Years
According to the National Tax Agency (NTA) useful life table, the statutory useful life for a residential RC structure is 47 years. The straight-line depreciation rate for 47 years is approximately 0.022 (2.2%). Assuming a building acquisition cost of 60 million JPY, your annual depreciation expense would be about 1.32 million JPY.
The Shortened Useful Life of Pre-owned Mansions (Simplified Method)
The reason tax-driven investments heavily favor pre-owned mansions is due to the Simplified Method (簡便法) formula specified in NTA No.5404.6 For assets that have passed some or all of their statutory useful life, you calculate the remaining useful life using the following formula.
(Statutory Useful Life - Elapsed Years) + Elapsed Years × 20% Fractions are truncated. If the calculated years are less than 2, it is set to 2 years.
| Scenario | Formula (Based on RC 47 Years) | Useful Life |
|---|---|---|
| 20 Years Old (Partially Elapsed) | (47 - 20) + (20 × 0.2) | 31 Years |
| 47 Years Old (Fully Elapsed) | 47 × 0.2 | 9 Years |
Comparing this based on a building acquisition cost of 60 million JPY:
- New (47 years): 1.32 million JPY deducted annually
- 20 Years Old Pre-owned (31 years): Depreciation rate ~0.033 → 1.98 million JPY deducted annually
- 47 Years Old Pre-owned (9 years): Depreciation rate 0.112 → 6.72 million JPY deducted annually
If your goal is to book massive depreciation expenses early on to shield your income tax, older pre-owned properties are overwhelmingly advantageous. However, this varies by property, so I highly recommend running simulations with a tax accountant beforehand.
3. Repair Reserve Funds: The ‘Lump-Sum’ Risk You Must Check Before Buying
Whether new or pre-owned, the Repair Reserve Fund (修繕積立金) is an expense that occurs throughout the holding period. It doesn’t show up in the listing price, but it heavily dictates your return on investment.
The Stepped-Increase Reserve System
According to the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) Mansion Standard Management Bylaws commentary, repair reserve fund systems are broadly divided into two types.7
- Equal Reserve Method: Reserving the same amount from the beginning throughout the long-term repair plan period.
- Stepped-Increase Reserve Method: Keeping initial reserve amounts low at the time of sale, then incrementally increasing the amount at regular intervals.
A significant portion of new Japanese mansions adopt the ‘Stepped-Increase’ method because it makes initial costs look low. Thus, even if it’s only 20,000 to 30,000 JPY per month when you move in, the long-term repair plan often explicitly states that it will increase significantly around the 10-to-15-year mark when large-scale repairs are due.
‘Lump-Sum Contributions’ When Funds Fall Short
The biggest risk occurs when the planned reserve funds aren’t enough to cover actual repair costs. The MLIT commentary clarifies that if the existing repair reserve is insufficient at the time of repair, the management association can collect a lump sum from the owners under the name of a Lump-Sum Contribution (一時負担金) or Repair Lump Sum (修繕一時金).7
Therefore, when buying a pre-owned mansion, you shouldn’t just feel relieved that the apparent monthly repair reserve is low. You must diligently investigate the following three points:
- Is the current management association’s repair reserve balance sufficient?
- What does the future increase schedule look like on the long-term repair plan?
- Is there a history of lump-sum collections or any upcoming collection proposals in the meeting minutes?
4. Liquidity: Core 3 Wards Indicators and the ‘Value of Time’
The completion of a real estate investment is the exit strategy. Let’s look at ‘liquidity’ indicators—the ability to sell at the price you want when you want—through the data of the Core 3 Wards (Chuo, Chiyoda, Minato).
Pre-owned Mansion Supply and Demand Trends in Core 3 Wards (April 2026)
| Indicator | Figure | YoY Change |
|---|---|---|
| Transactions (Contracted cases) | 238 cases | -9.2% |
| Inventory (Listed cases) | 4,400 cases | +43.0% |
Source: REINS Data Section p.8 Ⅰ-3-(1) Contract Status, p.16 Ⅰ-3-(3) Inventory Status3
The inventory of pre-owned mansions in the Core 3 Wards increased by 43.0% YoY, while contracted cases decreased by 9.2%.
Conversely, the price per ㎡ rose by 10.1% based on the Tokyo 23 Wards, showing that listing prices and transaction prices remain rock solid. How should we interpret this strange divergence where transactions are slightly shrinking but asking prices won’t come down?
I want to add a brief impression from living in a pre-owned mansion in the city center. The biggest pillar firmly supporting the real estate value of the Core 3 Wards from the bottom up is ultimately the ‘time saved through living close to work’. It saves office workers the time wasted on the streets, and the convenient infrastructure experience—having hospitals, pharmacies, and government offices nearby, plus access to 4 subway lines within 10 minutes—has a strong gravitational pull that makes it hard to move out once you’ve tasted it. Even if it’s an older building.
Because wealthy individuals who understand the merits of this city center infrastructure still highly value the core areas, the price defense remains strong.
However, from an investor’s perspective, amidst rising inventory, the short-term liquidity risk (the time it takes to sell) regarding whether you can sell at your desired price when you want to must certainly be calculated conservatively.
5. BOJ Interest Rate Environment: Implications from Three Hawkish Board Members
We cannot overlook the policy trends of the Bank of Japan (BOJ), which acts as a pillar supporting the Yield Gap in Japanese real estate investments.
On April 28, 2026, the BOJ Policy Board decided by a majority vote of 6 to 3 to keep the policy interest rate unchanged at 0.75%.4
The Minority View We Must Watch (3 Dissenters)
The decision was a ‘freeze’, but 3 out of the 9 members (Junko Nakagawa, Hajime Takata, and Naoki Tamura) strongly argued that rates should be raised to 1.0% immediately.4 They are on guard against the ripple effects of rising import prices.
Given the highly leveraged nature of real estate investment, if the interest rate climbs through 1.0% and higher, rental yields may fall, or buyers’ borrowing limits could shrink. We are in an era where an interest rate stress test (simulating cash flow under rising interest rates) before buying is absolutely mandatory.
6. Conclusion: A Cautious Short-Term Approach
The Tokyo mansion market in the spring of 2026, as seen through various data today, makes it difficult to definitively say whether new or pre-owned is the absolute winner. A strategy tailored to the investor’s situation is necessary.
| Investment Goal | Recommendation | Strengths / Considerations |
|---|---|---|
| Maximize Short-Term Tax Savings | Pre-owned (Older) | Can heavily concentrate early depreciation expenses using the simplified method for shortened useful life. |
| Stable Rental Operations | New or Under 10 Years Old | Predictability of repair costs is relatively high, and initial repair reserve burdens are low. |
| Capital Gains (Long-term) | Core City Center | Well-located pre-owned properties with a relatively lower barrier to entry compared to new prices (Core 6 Wards: 224 million JPY). |
Please make sure to go through the following checklist before making an investment decision.
Investor Action: Checklist
- New Mansion Due Diligence: Reflect the future increase schedule of the stepped-increase reserve method in your cash flow statement.
- Pre-owned Mansion Due Diligence: Check meeting minutes for the current repair reserve balance and any history of lump-sum contributions.
- Exit Strategy Check: Conservatively estimate the time required to sell, considering the increased inventory in the city center.
- Depreciation Simulation: Calculate your after-tax yield with a tax accountant using the NTA’s simplified method.
- BOJ Interest Rate Monitoring: Track any shifts in opinion from the 3 dissenting (hawkish) members at the next policy meeting.
There are definitely indicators we must view conservatively in the short term, such as the repair lump-sum issue, rising inventory in the Core 3 Wards, and pressure to raise interest rates. Therefore, it is safest to thoroughly calculate your yield at the time of purchase and your exit strategy.
Fact-check standard for data cited in this article (April 2026): Average price and initial month contract rate of new mansions (Real Estate Economic Institute)1, pre-owned transaction/inventory status and Core 3 Wards inventory +43.0% (REINS)23, BOJ policy rate maintained at 0.75% 6:3 (BOJ)4, NTA useful life simplified method formula6, MLIT repair lump sum commentary7. Please be sure to verify the latest data from the original sources before making an investment decision.
