Supply of new apartments in September down 44%

According to the Real Estate Economic Institute, 3,336 brand new apartments were released for sale in greater Tokyo in September, up 58.1% from the previous month but down 44.1% from last year. 2,388 apartments were sold, making the contract rate 71.6%. This is an increase of 2.0 points from the previous month but is a drop of 12.0 points from last year.

The average new apartment price was 47,640,000 Yen, down 16.2% from the previous month and down 5.6% from last year. The average price per square meter was 665,000 Yen, down 14.2% from the previous month and down 6.6% from last year.

411 apartments in high-rise buildings (over 20-storeys) were offered for sale, up 93.9% from the previous month but down 78.9% from last year. The contract rate was 78.3%, up 27.4 points from the previous month but down 11.6 points from last year.

Approximately 3,500 apartments are expected to be released for sale in October, which is similar to the 3,506 apartments released for sale in October 2013.

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

– Proud City Kamata, Ota-ku, Tokyo: 121 apartments sold; average price of 63,960,000 Yen.
– Season Suite Shiki no Mori, Saitama: 22 apartments sold; average price of 32,870,000 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

1,348 apartments were released for sale in Tokyo’s 23-ku, up 33.2% from the previous month but down 59.0% from last year. 1,066 apartments were sold, making the contract rate 79.1%.

The average new apartment price was 58,370,000 Yen, down 18.7% from the previous month and down 1.0% from last year. The average price per square meter was 842,000 Yen, down 14.9% from the previous month and down 3.2% from last year.

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

Studio: 3 (75.0% contract rate)
1-Bedroom: 52 (86.7% contract rate)
2-Bedroom: 192 (83.8% contract rate)
3-Bedroom: 762 (77.9% contract rate)
4-Bedroom: 52 (73.2% contract rate)

Average total sale price:

Tokyo 23-ku: 58,370,000 Yen (-1.0% from September 2013)
Western Tokyo: 48,660,000 Yen (+13.3%)
Kanagawa Prefecture: 39,430,000 Yen (-1.2%)
Saitama Prefecture: 37,690,000 Yen (-7.4%)
Chiba Prefectue: 38,830,000 Yen (+14.3%)

Average sale price per sqm:

Tokyo 23-ku: 842,000 Yen (-3.2%)
Western Tokyo: 692,000 Yen (+17.7%)
Kanagawa Prefecture: 551,000 Yen (+4.8%)
Saitama Prefecture: 511,000 Yen (-10.5%)
Chiba Prefecture: 499,000 Yen (+17.1%)

Apartment supply for first half of 2014 down 32.1%

The supply of brand new apartments in greater Tokyo for the first half of 2014 (April ~ September) dropped 32.1% from last year to 19,944 apartments. This is the first time in three years that the supply has fallen below 20,000 units.

The primary reason for the reduction in supply has been attributed to the rise in consumption tax in April 2014. Buyers of new apartments that would not be ready for delivery until after April 2014 could lock in the 5% consumption tax rate if they signed a sales contract by the end of September 2013. This caused a last-minute buying rush and a subsequent drop in demand.

Developers, contending with a steep rise in construction costs, have also been cautious with apartment releases and pricing.

The greater Tokyo area has a whole saw a drop in supply, with Saitama Prefecture (-43.2%) and Kanagawa Prefecture (-36.8%) seeing the largest falls.

Apartment prices at historic high

The average price of a new apartment in greater Tokyo was 51,300,000 Yen, the highest level seen since 1991 when prices reached 61,370,000 Yen. The contract rate was 76.8%, above the 70% level which indicates positive market conditions.

Sources:
The Yomiuri Shimbun, October 17, 2014.
The Real Estate Economic Institute, October 16, 2014.

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