Nationwide average apartment price drops for first time since 2012
According to the Real Estate Transaction Promotion Center, the average sale price of an existing apartment sold across Japan in April was 25,400,000 Yen, down 9.03% from last year. The average sale price per square meter was 385,200 Yen, down 8.76% from 2019. This is the first time since September 2012 to see a year-on-year drop in prices.
New apartment sales in Tokyo reach 47-year low
According to the Real Estate Economic Institute, the number of new apartments released for sale across greater Tokyo in April reached the lowest level seen since the Institute began collecting data in 1973. As developers shuttered salesrooms following the declaration of the state of emergency in mid-April, new home sales have stalled. Just 686 apartments were released for sale, down 68.0% from the previous month and down 51.7% from last year. A new record low is expected in May with the Institute forecasting a supply of 500 apartments.
Apartment transactions record biggest drop in 30+ years
As expected, transactions of second-hand apartments for the month of April have plummeted as buying activity sours during the coronavirus pandemic and state of emergency. A total of 1,629 apartments were reported to have sold across greater Tokyo in April, down 55.3% from the previous month and down 52.6% from last year. This is the biggest decline seen since REINS began recording data in May 1990.
Average apartment rent in Tokyo reaches new record high in April
The average monthly rent of a condo-style apartment in Tokyo’s 23 wards saw a slight month-on-month increase of 0.2% in April. The average rent has risen 5.8% from April 2019 to 3,855 Yen per square meter. Rents are now up approximately 29.4% from the bottom seen in late 2012.
Price-earnings ratio across Tokyo drops in 2019
The price-earnings ratio (PER) for brand-new apartments across greater Tokyo in 2019 dropped slightly from the previous year to 24.36. This is down from a record high of 28.66 seen in 2016. A high PER means a low rental yield.
Tokyo office vacancy rate rises for 2nd month
The office vacancy rate across Tokyo’s prime business districts increased for the second month in a row, with a 0.06 point increase to 1.56% in April. Chiyoda and Chuo wards saw vacancy rates shrink from the previous month. Chuo’s vacancy rate reached a new record low of 1.08%, down 0.06 points from March and down 0.94 points from April 2019.
Tokyo apartment discounts in April
We have been receiving more than a few inquiries from keen buyers looking to snag a bargain in the current market, and we have been monitoring the market very closely. The bad news is that while reported transactions have fallen a lot in April, the data from REINS shows that price negotiations on in the residential market appear to remain relatively unchanged from last year. This is in line with what we are seeing on the ground. There are a few big discounts here and there, but they remain outliers.