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.
Setagaya has the largest number of akiya (empty homes) in Japan
On a city/town/district level, Setagaya ward in Tokyo has the highest number of empty homes, or akiya, in Japan. According to the Ministry of Internal Affairs and Communications, there were an estimated 49,070 empty homes in Setagaya as of a 2018 survey, representing 10.4% of total housing stock. Neighboring Ota ward was in second place nationwide with 48,080 empty homes, and a 14.8% vacant house ratio.
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.
Mortgage stress on the rise
The Japan Housing Finance Agency (JHF) is reporting a surge in inquiries from borrowers who are struggling to make home loan repayments in the current crisis. As economic conditions worsen amidst the coronavirus pandemic a growing number of companies are laying off workers or reducing hours and pay. Household finances are being stretched to the limit, putting some borrowers in a precarious situation.