Japan’s luxury apartment market still appears to be undersupplied, with a report by Tokyo Kantei last week showing that just 0.02% of existing condominium-type apartments nationwide can be considered ‘premium’, i.e. over 100 m2.

Tokyo Kantei defines a ‘premium’ apartment as one meeting each of the following three conditions:

  1. The apartment is over 100 m2 (1,076 sq.ft)
  2. It is at least double the average apartment size of the rest of the building
  3. It is a corner apartment on either the top floor or second highest floor in the building

In the greater Tokyo area, a multi-prefecture region with over 36 million residents, there are just 118 apartments that meet this criteria. For full-floor type penthouses, there are just 13.

This type of luxury apartment is not a new concept, with evidence of them being sold in places such as central Tokyo, Kobe and the holiday resort area of Atami City from as early as the late 1960s. There was an increase during the bubble years of the late 1980s and early 1990s. In 1988, for example, annual supply reached a record high of 14 units, before increasing to 20 units a year in 1990 and 1991. New supply dropped off in the 1990s, with two years seeing zero supply. It began to pick up again in the 2000s, ranging from 18 to 20 units per year during the mini-bubble in 2007 ~ 2009.

Over the past 10 years, annual supply has ranged from 9 units up to a record high of 26 recorded in 2021. 

This year, there is an expected supply of 14 units. Next year, it’s forecast to be just 5 units supplied nationwide, and only two of those will be in the greater Tokyo area. 

PRICES AND SIZES

In the Tokyo metropolitan area, the average price of a newly-supplied premium apartment has risen by around 108% over the past three decades. In the early 1990s, the average price was 1.1 million Yen per square meter, and the average apartment size was 119.53 m2. In the early 2020s the average price was around 2.3 million Yen per square meter and the average apartment size was 156.39 m2. 

In Osaka Prefecture, the average price in the early 1990s was 2.99 million Yen per square meter with an average apartment size of 287.06 m2. In the early 2020s it was 1.7 million Yen per square meter with a size of 161.57 m2. The variance is due to a small sample size.

Source: Tokyo Kantei, October 31, 2023.

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