Tokyo’s office vacancy rate worsens for 8th month, owner-build house starts hit 55-year low, and Aichi’s population shrinks for first time since 1956. Below is a quick weekly summary of some of the recent goings-on in the Japanese real estate market.
Tokyo office vacancy rate worsens for 8th month
According to Miki Shoji, the office vacancy rate in Tokyo’s central five business districts in Chiyoda, Chuo, Minato, Shinjuku, and Shibuya reached 3.93% in October, up 0.50 points from the previous month and the 8th month in a row to worsen. The vacancy rate in brand-new construction was 2.13% and 3.99% in existing buildings. The average monthly rent was 22,434 Yen per tsubo (approx. 6,788 Yen/sqm), down 1.3% from the previous month but up 1.9% from last year. Shibuya ward had the highest vacancy rate, hitting 5.14%.
September owner-build house starts hit lowest level since 1965
Nationwide house starts for the first half of 2020 dropped 11.3% from 2019 to 414,039 units. This is the lowest level in 10 years. Owner-builds dropped 14.2% to 131,325 units as the closure of many house builder parks and showrooms during the State of Emergency earlier this year put a halt on activity. Owner-built house starts for the month of September were 22,337 units, a 7.0% decrease from last year and the lowest level seen for September since 1965. Rental house starts for September dropped 14.5% from last year to 25,053 units – the 25th consecutive month to record a decline.
Aichi Prefecture’s population shrinks for first time since 1956
The population in Aichi Prefecture has shrunk for the first time since record-keeping began in 1956. The prefecture had 7,541,123 residents as of October 1, 2020, a decrease of 11,750 residents from the same time last year. There was a net inflow of 208 new residents, but this pales in significance to the 23,000 increase seen last year. The reason for the smaller population? Fewer foreign residents moving in, along with a natural decrease as deaths outnumber births. Aichi Prefecture is home to a number of manufacturers that employ foreign workers. A slowdown in manufacturing, and international travel bans, can see fewer foreign workers brought in.
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