New apartment price in greater Tokyo hits 30-year high in 2020

The number of brand-new apartments released for sale across greater Tokyo in 2020 hit the lowest level in 28 years after the coronavirus pandemic saw showrooms shuttered and developers delay sales. A total of 27,228 apartments went on the market, down 12.8% from 2019. Sales are expected to recover in 2021 with 32,000 units forecast to be supplied.

Meanwhile, the average sale price hit the highest level seen since 1990. The average increased by 1.7% from 2019 to 60,840,000 Yen. The average in 1990 was 61,230,000 Yen.

The average price in Tokyo’s 23 wards was 77,120,000 Yen, up 5.8% from 2019, while the average price per square meter was 1,251,000 Yen, up 11.4% from 2019.

Tokyo’s 23 wards saw a 20.6% drop in supply. Saitama Prefecture saw a 26.5% drop while Chiba Prefecture saw a 28.8% increase. 

High prices have been the result of sustained construction costs, labor shortages and the high cost of acquiring land for residential developments. Buyers continue to seek convenient, centrally located apartments, with remote work yet to result in any noticeable change in demand for Tokyo properties.

The increase in the average price across the greater Tokyo area may also be due to developers focusing their efforts on sales activities within Tokyo’s 23 wards where they see the strongest demand. The comparatively higher property values in Tokyo are pulling up the average across the greater Tokyo region. New apartment prices in Chiba Prefecture actually dropped 0.5% from 2019, while Saitama (+1.2%) and Kanagawa (+2.7%) saw mild increases.

The most expensive apartment to go on sale was a 183 sqm (1,970 sq.ft) 2-Bed, 1-Bath penthouse in Proud Daikanyama Front that was listed for 690,000,000 Yen. The sale price works out to around 3,769,000 Yen/sqm (approx. US$3,375/sq.ft). Non-penthouse units in the building were priced from 2,100,000 ~ 2,900,000 Yen/sqm (approx. US$1,880 ~ 2,600/sq.ft), with units over 100 sqm going for around 2,900,000 Yen/sqm.

In December, all 237 apartments on offer in the first round of sales in Park Tower Kachidoki The Mid sold, with an average of 2.7 applications per apartment. The most popular apartment received 27 applications. The average apartment price was 109,790,000 Yen.

But the supply of 100 million Yen + apartments is actually a lot lower than it was back in 1990. In 2020, 1,823 of the apartments supplied were priced over 100 million Yen, down 2.3% from 2019. In 1990, 3,079 apartments were priced over 100 million Yen.

The first-month contract ratio across greater Tokyo was 66%, up 3.4 points from 2019. Remaining inventory shrunk by 190 units to 8,905 units as of December 2020.

Kinki Region

The Kinki region, which includes Osaka, Hyogo, Kyoto, Nara, Shiga and Wakayama prefectures, saw 15,195 new apartments supplied, down 15.8% from 2019. Osaka City saw a 34.2% drop in supply.

The average price was 41,810,000 Yen, up 8.1% from 2019, while the average price per square meter increased by 1.6% to 691,000 Yen. 18,000 units are forecast to be supplied in 2021.

Source: The Real Estate Economic Institute, January 25, 2021.

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