Would-be buyers, priced out by the ever-increasing sale price of apartments in central Tokyo, are turning to rentals, causing it to swing to a landlord’s market. A recovery in corporate earnings and pay-rises is also expanding renters’ budgets.

The vacancy rate for luxury apartments in Tokyo’s central 9 wards reached a historic low of 3.3% for the 4th quarter of 2022, according to realtor Ken Corporation. For the first time, the average rent for apartments in Minato, Shibuya and Setagaya priced over 300,000 Yen/month exceeded 20,000 Yen/tsubo (1 tsubo = 3.3 m2) for the first time. 

One recently-completed luxury apartment building has seen exceptional demand. La Tour Shinjuku First is a 35-story mixed-use high-rise located to the west of Shinjuku Station. 170 luxury apartments are located on floors 19 to 35, a large number of which are over 100 m2 (1,076 sq.ft). The building was completed at the end of last month and is already 96% leased. A 300 m2 (3,228 sq.ft) two bedroom penthouse was listed for rent for over 3 million Yen (US$22,000) per month.  A 71 m2 one-bedroom is listed for 470,000 Yen (US$3,500) a month, while a 161 m2 three-bedroom is listed for 1.18 million Yen (US$8,700). 

According to a chief analyst for multi-listing site AtHome, there has been a noticeable influx in tenant demand from families who are unable to afford to purchase a new apartment and are choosing to rent instead. The average advertised rent for an apartment between 50 ~ 70 m2 in Tokyo’s 23 wards recently exceeded 200,000 Yen/month. For apartments over 70 m2 in size, the average has hit a record high of 360,000 Yen/month.

Last year, the average price of a brand-new apartment in the 23 wards reached 98.99 million Yen, up 17.2% from the previous year, and the highest on record. Prices have increased by 90% over the past 10 years.

ANN News, April 18, 2023.
TBS News, April 18, 2023.