BUSINESS

Tokyo apartment sale prices increase for 8th year in a row

In 2020 the average sale price of an existing apartment across greater Tokyo saw a year-on-year increase for the 8th consecutive year. According to REINS, the average sale price was 551,700 Yen/sqm, up 3.2% from 2019. Sale prices have increased by 44.5% over the past 8 years.

The average apartment size was 65.24 sqm (702 sq.ft), up 1.3% from 2019, while the average building age was 21.99 years (2019: 21.64 years). Apartments took an average of 88.3 days to sell, up 8.2 days from 2019.

Transactions of apartments priced over 100 million Yen were up 7.2% from 2019 and up 75% from 2016. The sub-50 million Yen price has seen transactions fall.

As expected, the number of listings to hit the market in 2020 dropped for the second year in a row with a 11.3% decrease in 2020. The average size of an apartment listed for sale was 57.08 sqm (614 sq.ft), and the average building age was 26.83 years.

Overall, a total of 35,825 apartments were reported to have sold, down 6.0% from 2019. This may be due to the state of emergency that saw many brokerages temporarily close their doors in April and May. This number exceeds the supply of brand-new apartments that sold across Tokyo as developers continue to struggle with a shortage of available land sites, rising construction costs, and temporary showroom closures during the state of emergency.

It is also worth noting that the data provided by REINS only includes sales that were publicly reported to their listing database. A larger number of transactions go unreported, which means the actual transaction volume for existing apartments is higher.

Detached Home Sales

A total of 13,348 detached homes were reported to have sold across greater Tokyo, up 2.4% from 2019 and exceeding a previous record set in 2016. The average sale …continue reading

    

Tokyo apartment prices from 1992 to 2020

I want to share an interesting chart below showing the change in existing (not brand new) apartment prices from 1992 to 2020.

This chart appeared in the Money Gendai publication on January 5 and is supplied by REINS. It shows the average reported sale price of an existing apartment across greater Tokyo (which includes Tokyo, Kanagawa, Chiba and Saitama prefectures) from 1992 up until November 2020. You need to add 4 zeros onto the numbers to get the price.

Prices bottomed out in the early 2000s before starting to recover in the lead up to the 2008 global financial crisis. That led to a credit crunch and a tightening of the monetary supply. Quite a few small-to-medium sized developers in Japan were wiped out during this crisis, leaving a small number of major developers (often referred to as the Major 7).

In March 2011, the Tohoku region was devastated by the earthquake and tsunami. Property prices dropped as buyers reevaluated location risk.

The property market returned to a recovery from early 2013 onwards, buoyed by aggressive monetary policy, low interest rates, preferential tax breaks for home owners, and a general improvement in the global economy.

132 …continue reading