New apartment prices in greater Tokyo at 22-year high

Bays Tower Proud Tower Tachikawa Hibarigaoka Feels

According to the Real Estate Economic Institute, 4,222 brand new apartments were released for sale in greater Tokyo in July, up 20.5% from the previous month but down 20.4% from last year. This is the 6th month in a row to see a year-on-year decline in supply. Developers are taking caution to limit supply amidst a drop in demand following the increase in consumption tax and a steep rise in construction costs. According to Nomura Securities, the average cost of construction in May 2014 was 187,000 Yen/sqm – the highest level seen since 1993.

3,532 apartments were sold, making the contract rate 83.6%. This is 7.1 points higher than the previous month and 2.1 points higher than last year.

The average new apartment price was 55,320,000 Yen, up 14.5% from the previous month and up 7.9% from last year. This is the first time that prices have exceeded 55 million Yen since November 1992.

The average price per square meter was 771,000 Yen, up 12.9% from the previous month and up 6.1% from last year.

1,533 apartments in 18 high-rise buildings (over 20-storeys) were offered for sale, up 241% from the previous month but down 1.8% from last year. The contract rate was 93.5%.

Approximately 2,500 new apartments are expected to be released for sale in August. The institute has revised its estimated downwards and now expects between 46,000 ~ 48,000 apartments to be supplied in 2014. 

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

  • Bayz Tower & Garden: 300 apartments sold; average price of 59,310,000 Yen.
  • Proud Tower Tachikawa: 230 apartments sold; average price of 75,660,000 Yen.
  • Hibarigaoka Feels No.1: 144 apartments sold; average price of 36,900,000 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

2,195 apartments were released for sale in Tokyo’s 23-ku, up 35.8% from the previous month but down 29.7% from last year. 1,899 apartments were sold, making the contract rate 86.5%.

The average new apartment price was 62,440,000 Yen, up 9.5% from the previous month and up 5.8% from last year. The average price per square meter was 891,000 Yen, up 3.1% from the previous month and up 2.6% from last year.

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

  • Studio: 1 (100% contract rate)
  • 1-Bedroom: 141 (87.0% contract rate)
  • 2-Bedroom: 468 (88.6% contract rate)
  • 3-Bedroom: 1,230 (86.0% contract rate)
  • 4-Bedroom: 59 (79.7% contract rate)

Average sale price by area:

  • Tokyo 23-ku: 62,440,000 Yen (+5.8% from July 2013)
  • Western Tokyo: 56,360,00) Yen (+23.7%)
  • Kanagawa Prefecture: 45,970,000 Yen (+1.9%)
  • Saitama Prefecture: 41,650,000 Yen (+15.8%)
  • Chiba Prefecture: 41,500,000 Yen (+12.6%)

Average sale price per sqm:

  • Tokyo 23-ku: 891,000 Yen (+2.6%)
  • Western Tokyo: 760,000 Yen (+19.5%)
  • Kanagawa Prefecture: 642,000 Yen (+4.1%)
  • Saitama Prefecture: 582,000 Yen (+20.0%)
  • Chiba Prefecture:  542,000 Yen (+13.4%)

Sources:
Real Estate Economic Institute, August 12, 2014.
Reuters, August 12, 2014.
The Nikkei Shimbun, August 12, 2014.
The Yomiuri Shimbun, August 13, 2014.

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