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Harumi FLAG — once the symbolic residential development of the Tokyo Olympic Village — has now become a hotbed for investors placing bold bets. In March this year, a unit bought for ¥70 million was sold less than a year later for ¥150 million, temporarily setting the record for the highest price of that layout. But that record may soon be broken again: the latest transactions suggest prices for similar units will only continue to climb.
But behind this buying frenzy, can the market really sustain itself? Can rental yields justify the skyrocketing property prices? Will values keep rising? Amid expectations of interest rate hikes and stagnant rental growth, is this game of flipping still worth playing?
1. How Did Harumi FLAG Suddenly Become an Investment Hotspot?
Harumi FLAG is located on the former site of the Tokyo Olympic Village. Developed under the leadership of the Tokyo Metropolitan Government, all units were handed over by the end of March last year. The large-scale residential complex, composed of multiple high-rise slab-style buildings, was initially built to house athletes during the Olympics. Afterward, it was repositioned as a residential redevelopment project. However, post-COVID, it has unexpectedly become an arena for capital speculators.
Normally, government-led residential projects come with strict anti-speculation policies — banning corporate buyers, subletting, or reselling. But Harumi FLAG has been surprisingly lenient, effectively giving a green light to investors. On top of that, the initial pricing of Harumi FLAG was highly attractive. At around ¥3 million per tsubo (3.3 sqm), prices were about 30% lower than comparable developments in the area. This pricing gap triggered a massive rush of investors. In one building, the application rate for a single unit reached 266 times — evoking memories of Japan’s bubble economy era. An NHK investigative report found that in some buildings, corporate buyers made up 40% of the purchases, and some individual investors scooped up as many as six units at once. Clearly, this wasn’t just about owner-occupancy anymore.
2. Prices Have Doubled — But Can Rent Keep Up?
Take typical units ranging from 70 to 100 square meters. The original sale price was around ¥3 million per tsubo. Now, just a year later, listings in the resale market have soared to between ¥5 million and ¥8 million per tsubo. For example, the unit mentioned earlier — purchased for ¥70 million — was recently sold for over ¥150 million. Another unit in the same building, measuring 107 sqm, is asking for ¥270 million. These prices are no longer merely out of reach — they signal that many buyers are no longer purchasing to live, but rather to speculate.
Condominium Price Trends in the Harumi Area (2020 – May 2025), Unit: 10,000 JPY
However, renting out these units is proving more difficult than expected. Rental prices generally range from ¥17,000 to ¥18,000 per tsubo per month. That means a 27-tsubo (approximately 90 sqm) unit would rent for about ¥450,000 per month, while a 30-tsubo unit could fetch as much as ¥580,000. The problem is, Harumi FLAG’s location is not considered prime, its transportation access is somewhat inconvenient, and supporting amenities in the surrounding area are still lacking — all factors that limit local rental demand. Real estate agents in the area report that many units purchased for high prices are now being listed for rent at correspondingly high prices, but remain vacant for over six months. If you are the one who bought in at a high price, can your expected rent and long vacancy periods really support your investment?
Rental Price Trends for Condominiums in the Harumi Area, Unit: 10,000 JPY/tsubo (1 tsubo = 3.3 m²)
3. Cold Reality of Return Rates: How Long Can Optimism Last?
From an investment perspective, returns consist of operational income (rental yield) and capital gains (resale profit). Let’s break down a few examples:
Case 1
- Area: 75 sqm (~23 tsubo)
- Purchase price: ¥158 million (≈ ¥6.89 million/tsubo)
- Expected rent: ¥18,000/tsubo/month → Annual rent: ¥4.5 million
- Gross rental yield: 3.14%
Case 2
- Area: 107 sqm (~32 tsubo)
- Purchase price: ¥268 million (≈ ¥8.26 million/tsubo)
- Expected rent: ¥18,600/tsubo/month → Annual rent: ¥7.15 million
- Gross rental yield: 2.7%
It’s important to note that these yields do not include ongoing costs such as management fees, repair reserves, or property taxes — meaning actual returns are even lower. In other words, based on rental income alone, Harumi FLAG’s yield is not competitive in the current market. So can investors really count on capital gains?
Let’s assume a property was purchased for ¥100 million with annual rental income of ¥4.5 million — a gross yield of 4.5%. Depending on the yield the next buyer is willing to accept:
- At a 3.5% yield, the resale price could be ¥128.57 million
- At 2.5%, it could rise to ¥180 million
- In an extreme case, if the buyer accepts only 0.5% yield, the price could soar to ¥900 million!
This logic relies on the assumption that future buyers will accept lower and lower yields — in other words, someone else will pay more for an even smaller return. But how long can this game continue?
Japan’s central bank has already begun signaling future rate hikes. In a rising interest rate environment, the overseas investors who once rushed in due to a weak yen may start to pull back.
A more pressing concern is Japan’s inherently tenant-friendly rental market, which limits landlords' pricing power. And realistically, the number of people willing to spend ¥500,000 to ¥1 million per month on rent is extremely limited. As it stands, even deals matching expected rents are rare — let alone achieving consistent upward rent revisions. The hope for future rental increases may be nothing more than a pipe dream.
4. Conclusion
Harumi FLAG is both a showcase of Japan’s urban redevelopment capabilities and a mirror reflecting the contradictions in today’s real estate logic. It shines with the halo of asset appreciation, yet beneath the surface lie serious concerns: low rental yields, rising interest rate risks, and a disconnect between supply and demand.
Harumi FLAG represents a milestone in Japan’s post-pandemic economic recovery — signaling a transition from deflation to a normalized inflationary environment. We cannot ignore its symbolic significance in Tokyo’s property market and Japan’s broader economy. But we must also recognize this: the game of musical chairs will eventually come to an end. Home prices cannot be sustained by capital gains alone. Sooner or later, they must return to the fundamentals — sustainable, yield-based returns.
Data Source: Urbalytics Apartment Data Search – Harumi Area
https://www.urbalytics.jp/an/area
