Greater Tokyo’s apartment market between 2011 and 2021

Apartment prices across the greater Tokyo region have risen by as much as 70% over the past decade and 11% over the past year. The average reported sale price of a second-hand apartment as of December 2021 reached a record high of 641,700 Yen per square meter. That’s a 70.5% increase from the most recent market bottom seen in May 2012.

Transaction volume has also risen significantly, with the number of transactions in 2021 up 38% from the volume seen in 2011 and up 27% from that seen in 2012.

Transactions in 2021 were also up 11% from 2020 – a year hit with two months of disrupted sales activity in April and May due to the initial state of emergency declaration.

Fewer new listings and shrinking inventory

Despite transactions being up 38%, the number of new listings in 2021 was 6% lower than what was supplied in 2011. New listings were even down 11% from 2020. Remaining inventory as of December 2021 was 18% lower than it was in December 2011 and 6.4% lower than it was in December 2020.

Tighter supply conditions and growing demand have been some of the conditions supporting the price growth. Other reasons include record low interest rates, inheritance tax rules that favor holding apartments over other cash assets, more double-income households, elderly buyers moving out of detached houses and into more barrier-free apartments, and the rising cost of new construction.

Source: REINS, January 21, 2022.

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