Smaller apartments in Tokyo record strongest rental growth of 2.2% in Q2
The outperformance signals strong demand for compact rentals, which may persist as migration, elevated condominium prices and rising borrowing costs steer households toward leasing.
Average rents for 15-30 sq m apartments in Tokyo’s central five wards rose 2.2% quarter-on-quarter in Q2 2026, outperforming larger units.
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These are smaller units of 15-30 sq m.
Compact apartments continue to dominate Tokyo's rental market, with units under 45 sq m accounting for around 70% or more of listings across the city's 23 wards, according to Savills.
The consultancy said Japan's rental market differs from major Western cities such as New York and London, where shared accommodation plays a much larger role, creating a stable and sustained market for small and mid-sized apartments.
Within Tokyo's central five wards, the strongest rental growth during the second quarter of 2026 came from smaller units of 15-30 sq m, where average rents increased 2.2% quarter-on-quarter. Units measuring 30-45 sq m recorded more modest growth of 0.8%, while rents for larger 45-60 sq m apartments declined 0.9% over the quarter, although they continued to command the highest rental premium.
Looking ahead, Savills expects positive market momentum to continue, supported by healthy rental demand and strong demographic fundamentals.
The consultancy said continued positive net migration into Tokyo, rising borrowing costs and elevated condominium prices are likely to encourage more households to remain in or move into the rental market.
Savills also expects Tokyo's employment and education opportunities to continue attracting both domestic and international migrants, while the ongoing return-to-office trend could encourage more workers to seek housing closer to employment centres. At the same time, the city's more affordable outer wards are expected to remain attractive to households facing affordability pressures, helping sustain rental demand across the Tokyo 23 wards.