The supply of new apartments in greater Tokyo in 2016 reached a 24-year low with 35,772 apartments offered for sale. This represented a decrease of 11.6% from 2015 and was the lowest level seen since 1992. Developers have been restricting supply amidst rising construction costs, rising land prices and stagnant wages of potential buyers. Development sites in prime locations once earmarked for residential are being converted to office and hotel projects which can provide better returns.
Existing properties that have been renovated are now proving popular with buyers who would have once only considered buying new, which is putting further pressure on new apartment sales. In fact, a record high number of second-hand apartments sold in greater Tokyo in 2016. There were 37,189 reported sales, up 6.9% from 2015. Second-hand apartment sales exceeded new apartment sales by over 50%.
The average contract ratio for the year was 68.8%, which is below the 70% line said to indicate positive market conditions, and is the lowest ratio seen since 2009.
This content is available to paid subscribers only.
Sharing information on Japan’s real estate market has been a long passion dating back 14 years. However, gathering and preparing this content takes hours and hours each week. By joining our monthly subscription service, you can access over 3,100 articles dating back 14 years. Best of all, you’ll be supporting us in our endeavor to continue to provide investors with on-the-ground, expert information.
To join our paid subscription service and access over 3,100 news articles on Japan's real estate market, please register here.
Already a paid member? Log-in using your details below.