Tokyo apartment sale prices increase for 59th consecutive month
According to REINS, 2,265 second-hand apartments were sold across greater Tokyo in August, down 31.4% from July and down 5.0% from last year. August is one of the hottest months in the year and often a time when Japanese take a vacation, so sales are typically slower than in July or September.
The average sale price was 32,380,000 Yen, up 2.5% from the previous month and up 7.6% from last year. The average price per square meter was 505,000 Yen, up 2.1% from the previous month and up 5.9% from last year. This is the 56th month in a row to record a year-on-year increase in sale prices. The average building age was 20.69 years.
In the Tokyo metropolitan area 1,141 second-hand apartments were sold, down 33.7% from the previous month and down 4.8% from last year. The average sale price was 40,350,000 Yen, up 4.4% from the previous month and up 7.4% from last year. The average price per square meter was 684,200 Yen, up 4.3% from the previous month and up 7.4% from last year. This is the 59th month in a row to record a year-on-year increase in sale prices. The average building age was 19.39 years.
Price growth in Tokyo more subdued than the 2007 mini-bubble
Earlier this year, rosenka tax values at a section of ultra-prime commercial land in Tokyo’s Ginza district increased by 26% from the previous year to a record high of 40,320,000 Yen per square meter, exceeding the previous high of 36,500,000 Yen/sqm in 1992 and causing some to warn of an impending bubble and overheating of the property market in the nation’s capital.
There is valid cause for concern in some sectors of the investment-property market due to potential over-construction and over-lending to landowners to build small blocks of 'apaato' type rental flats in suburban areas with low rental demand.
But are current conditions mimicking previous bubbles?
This time around Japan is getting more foreign tourists than ever before, boosting revenues for both hotels and retails shops, making the increase in commercial real estate values much more pronounced than the residential market which relies more on real domestic demand.
Tokyo Midtown Hibiya to open in March 2018
On September 4, Mitsui Fudosan announced that the official name of the large-scale redevelopment opposite Hibiya Park in downtown Tokyo will be Tokyo Midtown Hibiya. The 191m tall building will include office space, the 2,300 seat TOHO Cinemas Hibiya, and 60 stores and restaurants.
The grand opening is scheduled for March 29, 2018.
Supply of new apartments shrinking as developers struggle to secure land
In the midst of a recovering property market, Japan’s top real estate developers are struggling to find suitable plots for residential projects, causing supply to shrink and sales volumes to fall.
The total value of real estate available for sale by the country’s top five developers as at the end of June 2016 was 3.107 trillion Yen (approx. 28 billion USD), down 0.4% from March and the first time in 9 quarters to record a decline. Increasing land prices and intense competition has meant that even though demand for real estate remains high there are fewer projects on offer.Read more
Onsen and retail complex near new Toyosu Fish Market in jeopardy
The operator of a planned onsen, hotel and retail center to be built next-door to the Toyosu Fish Market in Tokyo has announced that they may withdraw their plans due to concerns about feasibility. The proposed ‘Senkaku-banrai’ center would include a 24hr hot spring bath, hotel and 200 restaurants and stores, with a forecast for 1.9 million annual visitors.