The supply of new apartments in greater Tokyo in 2016 reached a 24-year low with 35,772 apartments offered for sale. This represented a decrease of 11.6% from 2015 and was the lowest level seen since 1992. Developers have been restricting supply amidst rising construction costs, rising land prices and stagnant wages of potential buyers. Development sites in prime locations once earmarked for residential are being converted to office and hotel projects which can provide better returns.

Existing properties that have been renovated are now proving popular with buyers who would have once only considered buying new, which is putting further pressure on new apartment sales. In fact, a record high number of second-hand apartments sold in greater Tokyo in 2016. There were 37,189 reported sales, up 6.9% from 2015. Second-hand apartment sales exceeded new apartment sales by over 50%.

The average contract ratio for the year was 68.8%, which is below the 70% line said to indicate positive market conditions, and is the lowest ratio seen since 2009.

The average new apartment price in 2016 was 54,900,000 Yen, down 0.5% from 2015 and the first decline seen in four years. Meanwhile, the average price per square meter was 793,000 Yen, up 1.8% from 2015 and the fourth year in a row to see an annual increase.

The most expensive new apartment publicly reported to have sold in 2016 was a 318 square meter (3,422 sq ft) penthouse apartment on the 5th floor in the still-under-construction Proud Roppongi building which sold for 1.43 billion Yen (approximately 12.5 million USD), or around 4.5 million Yen per square meter (3,650 USD/sq ft).

December 2016 Data

According to the Real Estate Economic Institute, 7,007 new apartments were released for sale across greater Tokyo in December, up 159% from the previous month and up 13.2% from December 2015.

5,369 apartments were sold, resulting in a contract ratio of 76.6%, up 11.8 points from the previous month and up 14.1 points from 2015. This is the highest ratio seen all year.

393 apartments in high-rise buildings (over 20-storeys) were released for sale, up 102% from the previous month but down 32.0% from last year. The contract ratio was 78.4%, up 25.1 points from 2015.

The average price of a new apartment across greater Tokyo was 50,780,000 Yen, down 1.6% from the previous month and down 6.9% from 2015. The average price per square meter was 755,000 Yen, up 0.8% from the previous month but down 0.9% from 2015.

The following buildings saw same-day sellouts* in December:

  • L’Gente Meguro, Meguro: 20 apartments sold; average price of 51,500,000 Yen.
  • Grande Maison Egotanomori, Nakano: 3 apartments sold; average price of 61,000,000 Yen.
  • Grande Maison Motosumiyoshi, Kawasaki City: 105 apartments sold; average price of 63,310,000 Yen.
  • Proud Shimousanakayama, Ichikawa City: 3 apartments sold; average price of 60,660,000 Yen.

 

* Same-day sellouts occur when all of the apartments released for sale in a particular sales campaign receive purchase applications. As many developers release apartments for sale in stages, it does not necessarily mean that all apartments in the building have sold.

Tokyo Metropolitan Area Sales

2,543 new apartments were offered for sale in the Tokyo metropolitan area, up 127% from the previous month but down 12.2% from 2015. 2,018 apartments were sold, resulting in a contract ratio of 79.4%.

The average new apartment price was 64,470,000 Yen, up 13.7% from the previous month but down 2.8% from 2015. The average price per square meter was 1,032,000 Yen, up 20.6% from the previous month and up 6.6% from 2015.

 

No. of sales by apartment type in Tokyo’s 23 wards:

  • Studio: 55 (78.6% contract ratio)
  • 1-Bedroom: 353 (88.3%)
  • 2-Bedroom: 445 (82.6%)
  • 3-Bedroom: 1,096 (75.8%)
  • 4-Bedroom: 47 (77.0%)

 

Average sale price:

  • Tokyo’s 23 wards: 64,670,000 Yen (-2.8% from Dec. 2015)
  • Western Tokyo: 40,990,000 Yen (-16.1%)
  • Kanagawa Prefecture: 46,560,000 Yen (+4.1%)
  • Saitama Prefecture: 41,240,000 Yen (-8.4%)
  • Chiba Prefecture: 40,510,000 Yen (+2.5%)

 

Average sale price per square meter:

  • Tokyo’s 23 wards: 1,032,000 Yen (+6.6% from Dec. 2015)
  • Western Tokyo: 593,000 Yen (-12.1%)
  • Kanagawa Prefecture: 658,000 Yen (+4.4%)
  • Saitama Prefecture: 605,000 Yen (-2.9%)
  • Chiba Prefecture: 577,000 Yen (+16.8%)

 

The Institute is expecting 1,500 new apartments to be released for sale in January 2017 (2016 = 1,494 units; 2015 = 1,679 units; 2014 = 1,826 units; 2013 = 1,721 units).

Source: The Real Estate Economic Institute, January 19, 2017.

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