Apartment rents in Greater Tokyo reach new high, new apartment supply up 67%, home loan tax deduction could soon apply to smaller residences, and Niseko to implement limits on hot spring drilling. Below is a quick weekly summary of some of the recent goings-on in the Japanese real estate market.
Apartment rent in Greater Tokyo breaks record for 3rd consecutive month
According to Tokyo Kantei, the average advertised monthly apartment rent across greater Tokyo increased by 0.6% from the previous month to 3,163 Yen/sqm in October. This is the 3rd month in a row to reach a new record high, although the rise is attributed to a larger share of listings in the more expensive Tokyo metropolitan area. Rents in Tokyo’s 23 wards remained flat from the previous month but are up 3.4% from last year. Chiba and Saitama cities have not benefitted price-wise from any Tokyo-ites fleeing the capital, with rents in Saitama down 4.0% from September, and Chiba down 0.3%. Both cities have seen an increase in rents of just 0.1% over the past 12 months.
New apartment supply in Greater Tokyo increases 67.3% in October
The number of brand-new apartments released for sale across greater Tokyo in October jumped 67.3% from last year to 3,358 units. This is a 35.6% increase from September. The contract ratio was 70.4%, up 27.8 points from last year and above the 70% line indicating healthy market conditions. The contract ratios were highest in Saitama (86.4%) and Chiba (83.3%). The average apartment price was 61,300,000 Yen, up 2.3% from 2019. The average price per square meter increased by 4.3% to 953,000 Yen. The average price in Tokyo’s 23 wards was 75,630,000 Yen, up 8.0% from 2019, while the average price per square meter increased by 14.3% to 1,293,000 Yen.
Home loan tax deduction could be expanded to cover smaller homes
The government is considering expanding the home loan tax deduction to include smaller apartments and homes. Currently, the deduction only applies to residences with a floor area (using the inner-wall measurement) of at least 50 square meters (approx. 538 sq.ft). Under this system, a homeowner may be eligible to deduct up to 1% of their remaining mortgage balance from their income tax each year for up to 10 years following purchase, assuming other requirements are met. The maximum annual deduction is capped at 400,000 Yen. The proposal could potentially see the minimum residence size lowered to 40 square meters (430 sq.ft).
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