New apartment prices down 10% in Tokyo

According to the Real Estate Economic Institute, 3,125 brand new apartments were released for sale in greater Tokyo in October, down 6.3% from the previous month and down 10.9% from last year. This is the 9th month in a row to see a year-on-year decline in supply.

The drop in supply is due primarily to an expected drop in demand following the increase in consumption tax in April 2014, as well as rising construction costs which are limiting the viability of many projects for developers. Sales for apartments priced under 40 million Yen have become particularly slow in recent months.

With recent data showing the second consecutive quarter of negative GDP growth in Japan, it seems highly probable that the next planned increase in the consumption tax rate will be delayed. A spokesperson from the Institute believes a delay in the next tax rise will provide a very positive benefit for the market.

1,978 apartments were sold, making the contract rate 63.3%, down 8.3 points from the previous month and down 16.3 points from last year. This is the lowest contract rate seen since February 2009 when it reached 61.7%. This is also the second month in a row where the rate has dropped below the 70% level which is considered to be the line between a positive and negative market conditions.Read more

by Zoe Ward

Shibuya City Office redevelopment under review

Shibuya City OfficeThe redevelopment of the Shibuya City Office and Shibuya Public Hall (C.C. Lemon Hall) is under review due to a potential cost blowout. A shortage of skilled construction labour and rising material costs have caused the estimated construction costs to increase by around 30 ~ 50%.Read more

by Zoe Ward

October rental data - Tokyo Kantei

According to Tokyo Kantei, the average monthly rent of a condominium apartment in greater Tokyo was 2,602 Yen/sqm in October, up 1.0% from the previous month and up 2.8% from last year. This is the first time in four months that the rent has exceeded 2,600 Yen/sqm. The average apartment size was 60.20 sqm and the average building age was 19.2 years.

The average monthly rent in Tokyo’s 23-ku was 3,233 Yen/sqm, up 0.8% from the previous month and up 4.9% from last year. The average apartment size was 56.74 sqm and the average building age was 17.4 years. Starting with Tokyo’s central 6 wards, almost all areas in the 23 wards have been seeing either stable or strong growth in rent.

Yokohama City is seeing a continued downwards trend. In Kobe City, the average building age increased from 19.9 years to 21.3 years, which caused a corresponding drop in average rent.Read more

by Zoe Ward

Apartment transactions down for 7th month while prices continue to rise

According to REINS, 2,655 second-hand apartments were sold across greater Tokyo in October, down 9.6% from the previous month and down 13.4% from last year. This is the 7th month in a row to see a year-on-year decline. The average apartment sale price across grater Tokyo was 28,120,000 Yen, up 2.2% from the previous month and up 8.0% from last year. The average price per square meter was 435,300 Yen, up 2.5% from the previous month and up 8.3% from last year. The average building age was 19.47 years.

1,299 second-hand apartments were sold in the Tokyo metropolitan area, down 8.8% from the previous month and down 10.2% from last year. This is also the 7th month in a row to see a year-on-year decline. The average apartment sale price was 34,780,000 Yen, up 3.0% from the previous month and up 7.3% from last year. The average price per square meter was 584,600 Yen, up 2.9% from the previous month and up 8.8% from last year. The average building age was 18.07 years.

In Shinjuku, Shibuya, Suginami and Nakano-ku, the average sale price per square meter increased by 20.8% from 12 months ago to 785,000 Yen/sqm, while the average building age was 19.28 years (down from 21.42 years in October 2013).Read more

by Zoe Ward

Residential yields and vacancy rates in Minato-ku - November 2014

According to real estate listing site Homes, the average gross yield on an apartment in Minato-ku in November was 5.3%, up 0.3 points from the previous month but down 0.5 points from last year. The average gross yield across Tokyo was 6.9%, showing no change from the previous month but down 0.7 points from last year.Read more

by Zoe Ward

High-rise office and apartments for Takeshiba

Tokyo Takeshiba Redevelopment 1

On October 29, Tokyo Land and Kajima Corporation announced plans for high-rise office and residential buildings in the waterfront Takeshiba area in Minato-ku. The project will also provide facilities for trade and content promotion and international expansion. JR Hamamatsucho and Takeshiba Station will be connected via a 500 meter long pedestrian bridge.

The project is expected to be completed in 2019.Read more

by Zoe Ward

Pembroke’s latest project in Roppongi

Try Seven Roppongi

Pembroke Real Estate Japan have started the construction of a 14-storey office building in located across the street from Tokyo Midtown in Roppongi 7 Chome. Try-Seven Roppongi is scheduled for completion in 2016. The exterior was designed by Jun Mitsui & Associates Architects.

A shrine and shrine office on an adjoining 876 sqm block of land will also be redeveloped in conjunction with Try-Seven.

This is the fourth development for Pembroke. In 2002 they developed Hikawa Gardens, a rental apartment building in Akasaka, and in 2010 they completed Azabu Gardens, a luxury expat rental building near Roppongi Hills.

Sources:
The Asahi Shimbun, October 28, 2014.
The Daily Engineering & Construction News, October 29, 2014.

by Zoe Ward