An updated forecast of Tokyo real estate prices
The Japan Real Estate Institute published an updated forecast of real estate prices and rental values in Tokyo’s 23 wards from 2014 to 2020.
In 2013, apartment prices increased by around 4% due to a last minute buying rush before the hike in the consumption tax kicked in. Note: this tax applies to the sale of brand new apartments and applies to the building portion of the sale only. Anyone who signed a contract on a new apartment before the end of September 2013 could lock in the 5% tax rate.
2014
In 2014, apartment prices are forecast to fall by around 2% from the previous year to 804,000 Yen/sqm. This was attributed a drop in demand due to the increase in the consumption tax rate from April 2014.
Monthly apartment rent increased by 6.4% to 3,430 Yen/sqm.
2015
Office vacancy rates in June - Miki Shoji
According to Miki Shoji’s office report, the office vacancy rate in Tokyo’s five central business districts (Chiyoda, Chuo, Minato, Shinjuku and Shibuya) was 6.45% in June, down 0.07 points from the previous month and down 2.01 points from last year.
The vacancy rate in brand new buildings was 18.09%, down 2.33 points from the previous month but up 6.49 points from last year.
It is not just large-scale office buildings that are experiencing better conditions, but mid-size buildings are also seeing a boost in demand. All 11 buildings developed under Nomura’s mid-size office brand ‘Premium Midsize Office (PMO)’ are almost fully occupied. Mitsubishi’s renovated small-to-mid sized office building in Kanda is also almost fully occupied. The building has attracted several IT-related tenants who want the freedom to design their own office space. Read more
June rental data - Tokyo Kantei
According to Tokyo Kantei, the average monthly rent of a condominium apartment in greater Tokyo was 2,609 Yen/sqm in June, down 0.5% from the previous month but up 2.7% from last year. All areas within greater Tokyo saw rents decline from the previous month.
The average apartment size was 59.37 sqm and the average building age was 18.7 years.
The average rent in Tokyo’s 23-ku was 3,174 Yen/sqm, down 0.7% from the previous month but up 2.4% from last year. The average apartment size was 56.38 sqm and the average building age was 16.9 years.Read more
New apartment supply dwindling in Tokyo
According to the Real Estate Economic Institute, 3,503 brand new apartments were released for sale across greater Tokyo in June, down 18.5% from the previous month and down 28.3% from last year. This is the fifth month in a row to see a year-on-year decline.
2,683 new apartments were sold, making the contract rate 76.6%. This is 2.3 points lower than the previous month and 5.0 points lower than last year. A contract rate above 70% suggests a strong market. According to REINS, 2,812 second-hand apartments were sold in June, exceeding the number of new apartments sold.
The average new apartment price was 48,300,000 Yen, down 6.3% from the previous month and down 0.1% from last year. The average price per square meter was 683,000 Yen, down 5.4% from the previous month and down 0.4% from last year.Read more
Secondhand apartment transactions continue to decline
According to REINS, 2,812 secondhand apartments were sold across greater Tokyo in June, up 6.6% from the previous month but down 10.7% from June 2013. This is the third month in a row to see decline from one year prior.
The average apartment sale price across greater Tokyo was 27,430,000 Yen, up 3.3% from the previous month and up 6.6% from last year. The average price per square meter was 425,200 Yen, up 2.9% from the previous month and up 6.4% from last year. The average building age was 19.93 years.
1,382 apartments were sold in the Tokyo Metropolitan Area, up 7.8% from the previous month but down 9.3% from last year. This is the third month in a row to see a decline from last year. The average apartment sale price was 34,140,000 Yen, up 5.6% from the previous month and up 7.4% from last year. The average price per square meter was 563,100 Yen, up 3.6% from the previous month and up 6.5% from last year. The average building age was 18.36 years.
The average sale price in central Tokyo’s 3 wards (Chiyoda, Chuo and Minato) was 49,630,000 Yen, up 6.0% from the previous month and up 9.1% from last year. The average price per square meter was 869,400 Yen, up 2.2% from the previous month and up 8.9% from last year. The average building age was 17.45 years.Read more
Residential yields and vacancy rates in Minato-ku - July 2014
According to real estate listing site Homes, the average gross yield on an apartment in Minato-ku in July was 5.2%, down 0.1 points from last month and down 0.8 points from July 2013. The average gross yield across Tokyo was 7.1%, down 0.1 points from last month and down 0.9 points from last year.
The vacancy rate remains unchanged at 9.9% in Minato-ku and 11.0% across Tokyo.
The average asking price of a secondhand apartment in Minato-ku was 785,957 Yen as of July 1, down 0.86% from June. The price growth seen in 2013 appears to have stalled and asking prices have started to decline slightly. The average asking price for land was 1,250,303 Yen/sqm, up 5.9% from last month.Read more
Tokyo’s bayside islands struggling with apartment and population boom
Residents in Tokyo’s bayside islands in Chuo-ku and Koto-ku are growing increasingly concerned about whether the current transport infrastructure and schools can cope with the growing population. Over the past several years, the area has been undergoing a transformation from what was once heavy industrial areas and shipyards into islands crowded with high-rise residential towers.
The development boom is not the direct result of the coming Olympic games, although the announcement did lead to a flurry of sales from buyers excited by the news.
The Athlete’s Village is expected to be built on Harumi Island - about 1 kilometre from Kachidoki Station on the Oedo Line. It will need to house approximately 17,000 people for the Olympic games, with the housing converted for either rental or sale post-games. Read more