Let’s take a look at what some analysts are predicting for the Tokyo residential property market in 2015.
Unfavourable conditions for new apartment market?
In 2013, the supply of new apartments reached 56,000 units in greater Tokyo. However, several factors caused the supply to drop by as much as 24% in 2014. An increase in the consumption tax rate to 8% in April 2014 led to a boost in demand from buyers looking to lock-in the lower tax rate (this tax applies to the building portion of new apartment sales). In addition, reconstruction efforts in Tohoku, redevelopment projects for the 2020 Summer Olympics and a weakening Yen have led to a steep rise in construction costs and a shortage in labour. This has reduced the profit margins for developers and has caused some projects to be delayed or cancelled.
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