We are often asked how the Tokyo property market is moving. Is it slowing down or showing signs of steadying? We are still seeing some big price increases occurring, particularly in the detached house market. Compared to apartments, houses in central Tokyo are in extremely short supply and are difficult to find comparisons for, making it easier for sellers to ask bolder prices.
In some cases the properties have been given a quick makeover to justify a higher price, but in other cases the price has been increased to match recent market conditions.
In mid-2016 we managed to negotiate a price of 180 million Yen for our client, who passed on the deal. It was re-listed in December 2016 for approximately 240 million Yen, a 30% increase in 6 months. More
In January, several of Japan’s major retail banks will increase the interest rates on their home loans.
The Bank of Tokyo-Mitsubishi UFJ will increase the prime interest rate on their 10-year fixed rate home loan by 0.05 points to 0.65%. This is their first rate increase in four months. Sumitomo Mitsui Trust Bank will increase their 10-year fixed rate by 0.05 points to 0.50%. Their 10-year rate reached a low of 0.35% in August 2016. Resona Bank and Mitsui Sumitomo Banking Corporation will increase their rates by 0.05 points to 0.90% and 0.85%. More
The following is a selection of apartments that were sold in central Tokyo during the month of December 2016: More
AYA Niseko, a luxury ski-in ski-out condominium/hotel located on the Grand Hirafu Resort ski slope, opened its doors this month. The 79-unit building is already almost 90% sold out, with the final few apartments expected to sell over the ski season.
The majority of apartments were in the 88 ~ 90 sqm range and priced from 100 ~ 400 million Yen (approx. 850,000 ~ 3.4 million USD), while a 370 sqm penthouse, which has already sold, was priced at 600 million Yen (approx. 5.1 million USD). Apartment prices are similar to what can be found in central Tokyo. More
More details have been released on the proposed revision to the annual fixed asset taxes for high-rise apartments.
Current tax valuations for the building are based on the size of the apartment, which means an apartment on the 40th floor would have the same fixed asset value as the same-sized apartment on the 1st floor, despite market prices being vastly different.
Under the proposed revision, apartments on higher floors will be more heavily taxed, while apartments on lower floors will have lower taxes. For a 40-storey apartment building, the difference in tax value between a 1st floor and 40th floor apartment could be around 10%. If the annual tax was 200,000 Yen, the apartment on the 1st floor might end up with a tax bill of 190,000 Yen, and the apartment on the 40th floor might have a tax bill of 210,000 Yen. For a 50-storey building, the difference might be 12 ~ 13%.
If approved, the new tax calculation method would apply to brand-new apartment buildings delivered to buyers from 2018 onwards. The target of the tax revision is brand-new buildings over 60 meters tall (over 20 storeys). It will not apply to existing buildings delivered to buyers before this date.
Jiji Press, November 25, 2016.
The Nikkei Shimbun, November 26, 2016.
Developer Sekisui House is planning Japan’s first net-zero energy condominium-type apartment building in Nagoya City. Construction is scheduled to start in mid-2017 with completion by early 2019.
The 3-storey building will contain 12 apartments. Solar panels on the rooftop will be capable of producing up to 4kW per apartment, or up to 50kW for the building. Each apartment will have its own Ene-farm fuel cell which comes with a remote control display screen so that residents can monitor electricity usage and emissions. Both the solar panels and fuel cells can provide back-up power in the event of a power outage. Insulation is also a priority with argon gas double-glazed windows. More
According to Tokyo Kantei, the average monthly rent of a condominium in greater Tokyo was 2,738 Yen/sqm in November, up 1.5% from the previous month and up 4.3% from last year. This is the fifth consecutive month to see a month-on-month increase in rents. The average apartment size was 59.12 sqm and the average building age was 20.0 years.
In the Tokyo metropolitan area, the average monthly rent was 3,312 Yen/sqm, up 1.9% from the previous month and up 1.7% from last year. The average apartment size was 56.78 sqm and the average building age was 18.1 years. More
A lot has happened this year in Japan’s real estate market. We have experienced negative interest rates, record low home loan interest rates, wide currency fluctuations, a boom in foreign tourist numbers, an increased volume of real estate transactions, and a continued increase in property prices.
For ease of reading, we have compiled our market insights into a report:
Once again, we have struggled with a very, very small supply of suitable properties this year. We do not see this changing in the near future as the number of new apartments coming onto the market in central Tokyo is dwindling, while re-sales remain limited. Even with growing interest from international buyers, the majority of developers in Japan still build for the domestic market with very few properties designed for foreign tastes and styles. More
Major Japanese real estate company Mitsui Fudosan and Meiji Shrine are planning to develop a 13-story, 400-room hotel to be located directly across the street from the Olympic Stadium.
If approved, construction of the 50-meter tall building could start in January 2018 with completion by mid-2019. More
According to the Real Estate Economic Institute, 2,701 new apartments were offered for sale across greater Tokyo in November, down 7.0% from the previous month and down 22.7% from 2015. This is the lowest level seen for the month of November since 1975. The leading cause of the drop in supply was that there were very few large-scale, 100-unit-plus apartment buildings offered for sale.
1,689 apartments were sold, resulting in a contract ratio of 62.5%, up 0.9 points from the previous month but down 19.6 points from last year.
195 apartments in high-rise buildings (over 20-storeys) were released for sale, up 27.5% from the previous month but down 83.1% from last year. The contract ratio was 65.1%, down 27.2 points from last year.
The average price of a new apartment across greater Tokyo was 51,610,000 Yen, down 4.5% from the previous month and down 18.4% from last year. The average price per square meter was 749,000 Yen, down 5.5% from the previous month and down 14.0% from last year. More