How to follow Japan's real estate market in a rapidly changing environment
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Real estate price indexes tend to be published 3 months after the fact, so anyone looking for up-to-the-minute details on the impact that the coronavirus is having on Japan’s real estate market needs to consider other sources of information.
70% of real estate companies report impact from coronavirus fears
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Earlier in March, real estate information provider Lifull conducted a survey of 925 real estate companies to see how the coronavirus situation was affecting them. Over 70% reported that their operations were already being impacted, while 91.9% were concerned about the future effects that this virus would have on their business activities.
Business mood in real estate sector sees biggest drop since 2011 earthquake
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The general business mood in March has worsened for the six month in a row according to credit research firm Teikoku Databank. The diffusion index (DI) of confidence from a survey of 11,330 companies across various industries dropped 6.2 points from February to 32.5. A month-on-month drop of this magnitude has not been seen since April 2014 which recorded a 4.2 point decline.
Tokyo Apartment Sales in March 2020
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The following is a selection of apartments that were reported to have sold in central Tokyo during the month of March 2020:
New apartment supply in February hits 45-year low
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The number of brand-new apartments released for sale across greater Tokyo reached the lowest level seen for the month of February since 1975.
According to the Real Estate Economic Institute, February’s figures were not the direct result of the recent worldwide outbreak of the novel coronavirus. However, should economic conditions and consumer outlook worsen as a result of the unprecedented global slowdown, it is likely that Japan’s developers will continue to limit the supply of new apartments in the coming months.
February apartment transactions reach 12-year high
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According to REINS, 3,749 second-hand apartments were reported to have sold across greater Tokyo in February, up 39.9% from the previous month and up 7.6% from last year. The average sale price was 35,730,000 Yen, up 2.7% from last year. The average price per square meter was 547,600 Yen, up 2.8% from last year. This is the 13th month in a row to see a year-on-year increase in sale prices.
Japan’s regional land prices increase for first time in 28-years
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Nationwide land prices rose for the fifth year in a row this year, but hard-hitting effects of the novel coronavirus could put a swift end to Japan’s real estate recovery.
According to the Ministry of Land, Infrastructure, Transport and Tourism (MLIT), the nationwide ‘chika-koji’ assessed land price saw a 1.4% increase in 2020. This was a 0.2 point improvement from 2019’s 1.2% increase.