High-rise residents feeling the stress of the pandemic, central Tokyo apartment prices rise against the odds, while housing starts drop. Below is a quick weekly summary of some of the recent goings-on in the Japanese real estate market.
High-rise living in a pandemic
Tabloid Nikkan Spa ran a piece on June 27 about the dramas and bullying occurring in high-rise apartment towers amidst the pandemic. To avoid crowding in elevators, some buildings now have rules limiting the number of people. In a building with several hundred units and over a thousand residents, this can mean an awfully long wait for a free elevator. Online message boards are filled with complaints about residents not wearing masks, using the elevator instead of the stairs for lower-floor residents, and even using the stairwell to exercise. On-site facilities such as gyms, lounges and kids rooms have been closed, with residents arguing over opening them or keeping them closed. Arguments continue over having to pay for these facilities when they cannot be used. Residents in high-rises in the sparsely-developed islands on Tokyo Bay sometimes have to rely on a single grocery store on the ground floor for food and necessities. Grocery items have been in short supply now that everyone is working from home.
Central Tokyo apartment asking prices up 7.7% from last year
Tokyo Kantei reported that the average asking price of a 70 sqm second-hand apartment in central Tokyo’s six wards (Chiyoda, Chuo, Minato, Shinjuku, Bunkyo, Shibuya) was 83,730,000 Yen in May 2020, up 0.3% from the previous month and up 7.7% from last year. In Osaka’s central six wards the average asking price dropped 0.5% from the previous month to 46,110,000 Yen, but is still up 8.0% from last year.
Jobs-to-applicant ratio sees biggest fall in 46 years
In May, the nationwide jobs-to-applicant ratio dropped by 0.12 points from the previous month to 1.20. This means there are 1.2 job openings for every job seeker. This is the second-biggest month-on-month drop in history, and the largest since the 0.20 point drop in January 1974 during the first oil crisis. Unemployment rose by 0.3 points to 2.9%, with a total of 1.97 million people counted as unemployed.
Housing starts drop 12.3% in May
According to the Ministry of Land, Infrastructure, Transport and Tourism (MLIT), new housing starts across Japan saw a year-on-year drop of 12.3% to 63,682 units in May. This is the 11th month in a row to see a decline. Owner-occupier builds dropped 20.7% to 19,696 units, recording the 10th consecutive month of a year-on-year decline. Rental housing starts dropped 8.1% to 24,040 units, down for the 21st month in a row.