COVID-19 struck the global economy in 2020, but the used condominium market moved differently from forecasts. Let's look back at the market trends of that period—when the Olympic-related demand surge, the pandemic, and the spread of remote work became intricately intertwined—and use those lessons to inform future investment decisions.
How Did Real Estate Prices Move After the Olympic Bid Was Awarded?
Following Tokyo's selection as host of the 2020 Olympics in 2013, real estate prices entered an upward trend, centered on the city's core. Accelerated facility construction and infrastructure development tightened supply of building materials and labor, driving up new housing prices. Used properties rose in tandem.
The Olympic-related redevelopment in Tokyo not only improved facilities but also enhanced overall urban convenience, structurally underpinning real estate value growth.
Did Used Condo Prices Really Not Fall Even During the Pandemic?
Although a decline in real estate prices was expected due to the economic stagnation caused by COVID-19, according to a survey by the Real Estate Economic Institute, while the number of condominium units sold in the Greater Tokyo area decreased, no decline was seen in property prices.
Why Tokyo Land Prices Did Not Fall
The price increases that had been seen as Olympic-related demand were, in reality, a structural rise in land values driven by Tokyo-wide redevelopment and improved convenience. Construction costs also remained persistently high, continuing to support prices even after the pandemic.
Overseas Investors Reassessed Domestic Real Estate
Before COVID-19, investment capital had been concentrated in real estate in emerging Southeast Asian countries, but rising property prices and geopolitical risks accelerated a shift back toward Japanese domestic real estate. Please also see our detailed coverage of Japanese real estate investment by wealthy foreign nationals.
Japan's COVID-19 response kept its per-capita mortality rate low among major developed nations, raising the country's reputation for real estate as a safe-haven asset.
Two Variables That Influenced Post-COVID Market Trends
Inbound Demand Recovers Depending on Government COVID Measures
Before COVID-19, the real estate market was strong alongside tourism demand. The recovery of inbound visitors after the pandemic subsided directly translated into recovery of real estate values in tourist destinations and urban areas.
Changes in Housing Demand Driven by the Spread of Remote Work
The pandemic catalyzed the spread of remote work, increasing freedom of choice over where to live. Demand placing greater priority on spaciousness, facilities, and environment over commuting convenience grew, boosting housing demand in suburban and regional areas. Office demand also moved toward smaller footprints and more flexible locations.
It should be noted that remote work was already being promoted by the government as part of work-style reform before COVID-19, and future policy developments will continue to influence structural changes in the real estate market.
Related Reading
- Wealthy Foreign Buyers Are Accelerating Investment in Japan's Luxury Real Estate—Background to Rising Tower Condo Prices
- [March 2025] Latest Trends in the Greater Tokyo Used Condo Market
- Real Estate Exit Strategies in an Era of Inflation and Rising Construction Costs
Frequently Asked Questions (FAQ)
Q1. Why didn't used condo prices fall during the pandemic?
Multiple factors combined to offset the partial decline in demand: rising supply costs from sustained high construction and labor expenses, increased urban value from Tokyo's redevelopment, and overseas investors returning to domestic real estate.
Q2. Which areas should I watch for condo investment after COVID-19?
Central urban areas and tourist destinations that benefit from inbound recovery, as well as Tokyo suburbs and major regional cities where the spread of remote work has increased demand, are attracting attention. However, analysis that also accounts for future interest rate trends and demographic shifts is essential.
Q3. How did the spread of remote work affect the office real estate market?
Demand for large offices contracted partially while demand for satellite offices and coworking spaces increased. The importance of office location declined, and functionality and cost-performance came to be valued more.
Q4. Was investing in a used condo in 2020 the right call?
Not only did prices not fall, but they continued to rise—especially in central areas—so purchases made in 2020 ultimately proved advantageous. That said, market conditions are constantly changing, so analyzing individual properties and designing exit strategies remain crucial.
Q5. What is the outlook for the used condo market going forward?
The key variables are price-correction risk in a rising-rate environment, movements of overseas investors, the degree to which remote work becomes entrenched, and demographic dynamics. We recommend regularly checking the latest market data before making investment decisions.
