New apartment prices in Sendai up 15%

Apartment prices in Sendai continue to grow with the average price of new apartments in the first half of 2013 increasing by 15% to 461,515 Yen/sqm.

The average apartment price in greater Sendai was 34,650,000 Yen (355,000 USD), up 10.1% from the first half of 2012.

After the 2011 Tohoku disaster, land values began to rise in the greater Sendai area due to high demand from residents relocating to safer ground. The reconstruction efforts have also caused a steep rise in the cost of building materials and labour. The main cause behind the rise in apartment prices has been this increase in construction costs.

A total of 606 apartments were supplied to the market, up 25% from last year. This is still below the normal supply of 1,000 apartments. 584 apartments over the same period were sold, making the contract rate 96%. 76% of the projects were sold out within the first month of sales.

Despite the growing sale prices, developers are hesitant about starting new projects. The increasing cost of development sites, along with higher construction costs has reduced profit margins.

Source: The Nikkei Shimbun, August 7, 2013.

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