• Average new apartment price down 3.7% in Tokyo
  • No. of high-rise apartments fall 69.5%
  • Office vacancy rates down in both Tokyo and Osaka

NEW APARTMENT SUPPLY DOWN:

Brand new apartments listed for sale in the Tokyo area in July fell 1.3% compared to a year earlier to 4073 units. This is the second month of decline. This is due in part to apartment showrooms opening for shorter hours to conserve power, less activity by developers and a general constraint in supply as material shortages and restrained buying cause developers to delay sales activity.

The average apartment price fell by 3.7% from the previous year to 45,580,000 Yen (591,950 USD). The average price per square meter fell 4.9% to 637,000 Yen (769 USD/sqft). The contract rate was 76.2%, down 2% from the previous year, and down 3% from the previous moth.

The supply for the month of August, 2011, is forecast to fall 10% from the year prior to 2000 units. The typically hot temperatures in August, along with power conservation measures mean developers are not expecting sales to be strong and are delaying sales activity.

The consecutive holidays in September are a time for tough competition between apartment showrooms, with developers pushing to release apartments for sale by this time. Amidst the low popularity of high-rise apartments, or tower mansions, there are still several that will begin sales activity at this time. As economic conditions become increasingly uncertain, sales of high-end properties will still lag behind.

For high-rise apartments over 20 stories, there were a total of 16 new buildings with 249 apartments – a fall of 69.5% from the previous year. The contract rate was 71.9% down from 78.9% in July 2010.

SAME DAY SELLOUTS:

The following new apartments in Tokyo experienced same-day sellouts (this means that the ‘lot’ of apartments put up for sale for a particular sales period had all received applications on the first day, but does not necessary mean that all apartments in the building were sold):

[1]    Park Homes Meguro The Residence (Meguro-ku)
Average price: 63,380,000 Yen

[2]    Proud Ebisu (Shibuya-ku)
Average price: 80,110,000 Yen

[3]    Plane Superior Saginomiya (Nerima-ku)
Average price: 51,260,000 Yen

[4]     Proud Kitaurawa Koen (Chuo-ku)
Average price: 49,330,000 Yen

In the Kinki Region (Osaka, Kyoto, Hyogo, Shiga, Nara and Wakayama), the new apartment supply fell 18.2% to 1560 apartments. The contract rate for the month was 75.1%, and this is the 6th continuous month where the rate has been above the minimum acceptable level of 70% which indicates positive market conditions. The average apartment price increased from the previous month by 4.4% to 35,820,000 Yen (465,000 USD) with an average price per square meter of 481,000 Yen (580 USD/sqft).

COMMERCIAL PROPERTIES:

In central Tokyo, office vacancy rates fell by 0.05% to 8.76% and the average office rent fell by only 67 Yen to 17,225 Yen/Tsubo (5210 Yen/sqm). The average rent in a brand new office building remained unchanged at 23,285 Yen/Tsubo (7043 Yen/sqm).

In central Osaka’s 6 wards, office vacancy rates fell 0.14% to 11.62%. The fall in average rent is slowing down with the average in July falling only 50 yen from the previous month to 11,768 Yen/Tsubo (or 3560 Yen/sqm).

Sources:
The Nikkei Shimbun, August 11, 2011
The Sankei Shimbun, August 11, 2011

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