Industry body introduces voluntary rules to curb flipping of brand-new Tokyo condos

On November 18th, the Nikkei Shimbun reported that Japan’s real estate industry is moving to curb speculative condominium resales, a measure aimed at addressing soaring prices in central Tokyo.

The Real Estate Companies Association of Japan (RECAJ), an industry body representing around 160 major developers including Mitsui Fudosan and Mitsubishi Estate, has compiled a new voluntary policy to prohibit the resale of brand-new condos before handover.

Under the proposed rules, buyers found violating the policy could face contract cancellation and forfeiture of their down payment, typically around 10% of the sale price.

CG rendering of the Garden Lounge in Central Garden Tsukishima The Tower, the first condo project to implement the resale rule. More details below.

The guidelines, which will primarily apply to future sales, stipulate that from the point of signing the sales & purchase contract until key handover, buyers cannot enter into agreements intended for third-party resale, request brokerage services for resale, or share property information for the purpose of selling.

Developers will notify buyers of these terms through the legally required Explanation of Important Matters, although the rules are voluntary, and each company may implement them based on factors such as location and project size on a case-by-case basis.

If implemented at a new condo project, these rules will also apply to both Japanese and foreign purchasers.

Mitsui Fudosan Residential became the first developer to implement the measure this November at its Central Garden Tsukishima The Tower in Chuo Ward, scheduled for handover in March 2029.

Central Garden Tsukishima The Tower concept video, courtesy of the developer YouTube channel.

With prices expected to range from ¥100 million to ¥500 million, down-payments for these units could reach ¥10 million to ¥50 million.

The policy reflects growing frustration among ordinary homebuyers over rising condominium prices. Data from the Real Estate Economic Institute shows that the average price of new condos in Tokyo’s 23 wards reached ¥133.09 million from April to September 2025, a 20.4% increase from the same period last year.

According to the Nikkei Shimbun, in the Greater Tokyo Area, the average rose to ¥94.89 million, nearing the ¥100 million mark. Limited land supply, robust demand, and rising construction costs are driving higher prices, pushing some buyers toward smaller homes or the resale market.

Short-term resales of newly built units have also increased. Data from the real estate website Mansion Review, operated by One Note of a Kind, shows that 1,355 new condos less than one year old were listed for sale in Tokyo from January to October 2025, 2.4 times more than a decade ago.

Mitsubishi UFJ Trust and Banking reports that only 6.3% of condos sold in the 23 wards in 2024 were less than seven years old, while foreign buyers accounted for an average of 19% of purchases in central wards such as Chiyoda, Minato, and Shibuya.

Local governments have also expressed concern over speculative activity. In July, Chiyoda Ward requested that RECAJ introduce resale restrictions for redevelopment projects, proposing a clause that would prevent resale for five years after handover.

The Toyomi Tower Marine & Sky concept video courtesy of the developer’s YouTube channel.

Some developers have already imposed their own restrictions. Mitsui Fudosan limits buyers to one unit per household at The Toyomi Tower Marine & Sky, while Sumitomo Realty & Development has prohibited resale for five years at projects such as Grand City Tower Ikebukuro, imposing penalties of up to 20% of the purchase price for violations.

Source:

Nikkei Shimbun (Japanese only; paywalled)