Our Japan Property Market Report for 2019
Thank you to all of the wonderful readers over the past year. We appreciate your support and look forward to closely following the Japanese real estate market with you throughout the next twelve months. If you have any feedback, questions or would like to discuss your next real estate purchase in Tokyo, please send us an email.
Plans for 50 luxury hotels across Japan
On December 7, Chief Cabinet Secretary Yoshihide Suga announced a plan to encourage and support the opening of fifty world-class luxury hotels across Japan. Suga made the announcement at a press conference following a visit to a town devastated by the 2016 Kumamoto earthquakes.
Japan’s new apartment price to income ratio increases for 7th year
In 2018, the average price of a brand-new apartment across Japan was 8.09 times the average annual income. This is a 0.28 point increase from 2017 and the 7th year in a row to record a year-on-year increase in the multiple. For second-hand apartments, the nationwide ratio was 5.47, up 0.17 points from 2017 and the 6th year in a row to see an increase.
New construction pre-sales slowing
Over the past three years, the number of buildings selling out before completion has dropped to just 50%. For some developers, this can spell disaster, but a surprising number have the patience to wait and take a slower approach to sales.
Central Tokyo apartment prices hit new record high in November
In November, the average sale price of an existing apartment in Tokyo’s 23 wards increased for the 10th month in a row. The average reported sale price reached 722,500 Yen/sqm, a 0.8% increase from the previous month and a 5.5% increase from last year.
Tokyo office vacancy rate hits new low in November
The average vacancy rate for prime office space in Tokyo’s central five business districts hit a new low in November, dropping 0.07 points from the previous month to 1.56%. This is the lowest vacancy rate seen since December 1990 when the average rate was just 0.39%. Meanwhile, average rents have increased for the past 71 consecutive months.
Tokyo Bayside population continues to grow
While regional areas in Japan are suffering from a declining population, other districts, such as those in Tokyo’s bayside area, are struggling to control a surge in new residents. In 2019, Koto Ward’s population reached 518,000, an 80,000 increase over the past 10 years. Neighboring Chuo Ward’s population bottomed out at 72,000 in 1997 but now sits at 167,000. Numerous high-rise apartment towers and a desire to be closer to one's office have been the main drivers behind the population growth.