New apartment sales in September surge before consumption tax increase deadline

The Parkhouse Grand Chidorigafuchi 1
The Parkhouse Grand Chidorigafuchi – now sold out.

According to the Real Estate Economic Institute, a total of 5,968 new apartments were released for sale in greater Tokyo in September, up 77.3% from last year and up 44% from the previous month.

Of those, 4,986 apartments were sold, making the contract rate 83.5% in greater Tokyo. This is an increase of 14.2 points from last year and 2.0 points  from August.

The number of new apartments offered in high-rise buildings over 20 storeys was 1,949, up 810.7% from last year. The contract rate was 89.9%, up 27.3 points from last year.

Previous contract rates:

  • September: 83.5%
  • August: 81.5%
  • July: 81.6%
  • June: 81.6%
  • May: 78.1%
  • April: 78.2%

The average new apartment price was 50,430,000 Yen, up 22.4% from last year. The average price per square meter was 711,000 Yen, up 22% from last year.

TOKYO CITY

A total of 3,289 new apartments were released for sale in September. 2,830 apartments were sold, making the contract rate 86.0%.

The average new apartment price was 58,910,000 Yen, up 23.1% from last year. The average price per square meter was 868,000 Yen, up 22.4% from last year.

Several developments saw same-day sellouts in September, including:

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

No. of sales by apartment type in Tokyo City: 

  • Studio: 33 (91.6% contract rate)
  • 1-Bedroom: 280 (92.4% contract rate)
  • 2-Bedroom: 729 (86.9% contract rate)
  • 3-Bedroom: 1,697 (84.8% contract rate)
  • 4-Bedroom: 76 (81.7% contract rate)

Average sale price by area:

  • Tokyo 23-ku: 58,910,000 Yen (+23.1% from September 2012)
  • Western Tokyo: 42,960,000 Yen (-0.5%)
  • Kanagawa Prefecture: 39,900,000 Yen (+11.8%)
  • Saitama Prefecture: 40,690,000 Yen (+21.0%)
  • Chiba Prefecture: 33,980,000 Yen (+8.6%)

Average sale price per square meter:

  • Tokyo 23-ku: 868,000 Yen (+22.4% from September 2012)
  • Western Tokyo: 588,000 Yen (-0.2%)
  • Kanagawa Prefecture: 526,000 Yen (+5.2%)
  • Saitama Prefecture: 571,000 Yen (+26.0%)
  • Chiba Prefecture: 426,000 Yen (+2.9%)

Last-minute rush

The consumption tax rate is scheduled to increase from its current rate of 5% to the new rate of 8% from April 2014. When buying a brand new apartment from a developer, this tax is charged on the building portion of the purchase (but not the land). For apartments that are still under construction with handover expected from April 2014 onwards, buyers could lock in the current 5% rate if they signed a purchase contract by the end of September 2013.

Sales during first half of 2013

The number of new apartments released for sale in the six months to September increased by 35.6% from the same period in 2012 to 29,367 apartments. This is close to the 30,097 apartments released in the first half of 2007 (prior to the Lehman Shock). The Institute believes that the consumer expectation of rising interest rates and higher property prices in the near future is encouraging them to make their purchase sooner.

Between 54,000 ~ 55,000 apartments are estimated to be released for sale in 2013, up from the original estimate of 50,000 apartments.

Approximately 3,500 new apartments are expected to be offered across greater Tokyo in October.

Sources:
The Nikkei Shimbun, October 16, 2013.
The Real Estate Economic Institute, October 16, 2013.

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