According to the Real Estate Economic Institute’s report on the compact apartment market, smaller apartments are starting to account for a larger share of total supply.
Compact apartments are defined as those with an internal floor area of 30 ~ 50 sqm (323 ~ 538 sq.ft). These apartments generally target singles and working couples.
In 2018, a total of 3,237 brand new compact apartments were released for sale across greater Tokyo, representing 8.7% of all new apartments supplied in the year. The number of compact apartments increased by 20% from 2017, while the share increased by 1.2 points. This is the fourth year in a row to see an increase in the share of the total supply.
A little over 80% of these compact apartments were located in Tokyo’s 23 wards, accounting for 16.3% of the total supply. The highest supply was in Chuo-ku (355 units), Taito-ku (238 units), Koto-ku (216 units), and Shibuya-ku (204 units).
The average price of a brand-new compact apartment in 2018 was 44,390,000 Yen, up 4.3% from 2017. In Tokyo’s 23 wards the average price was 46,450,000 Yen. In 2011, average prices were around the 30 million Yen range. The average price per square meter has increased by 36.3% between 2011 and 2018.
The trend for compact apartments started in 2000 with developers seeing a two-birds-one-stone opportunity to provide apartments that would appeal both to investors and to home buyers looking for smaller, affordable apartments in convenient locations. In 2000, compact apartments accounted for 2.6% of the total supply of new apartments. By 2003, the annual supply of these units had more than doubled to 6,145.
Source: The Real Estate Economic Institute, March 28, 2019.