Price-earnings ratio across Tokyo drops in 2019

The price-earnings ratio (PER) for brand-new apartments across greater Tokyo in 2019 dropped slightly from the previous year to 24.36. This is down from a record high of 28.66 seen in 2016. A high PER means a low rental yield.

In 2019 the average monthly rent of a brand-new 70 sqm (753 sq.ft) apartment increased by 3.5% to 250,142 Yen (approx. US$2,330), while the average price of a similarly-sized apartment dropped by 0.5% from the previous year to 73,080,000 Yen (approx. US$680,000).

Sengakuji provides lowest rental return

With a PER of 38.56, the Sengakuji Station area in Takanawa, Tokyo, had the highest PER across the greater Tokyo region. This corresponds with a gross rental yield of around 2.59%. Nearby Shinagawa Station area had a PER of 32.85, while Shirokane-Takanawa had a PER of 32.32. 

Shibuya Station area was in 4th spot with a PER of 33.54. The average price of a brand-new 70 sqm apartment was 145,760,000 Yen, while the average monthly rent was 362,170 Yen. Hiroo Station area was in 5th spot with a PER of 33.34, an average apartment price of 165,250,000 Yen, and an average monthly rent of 413,100 Yen.

Data: Tokyo Kantei, May 7, 2020.

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