Forecast of new apartment prices between 2017 and 2025
According to the latest medium-term forecast by the Japan Real Estate Institute (JREI), the average price of a brand new apartment in Tokyo’s 23 wards is forecast to see annual growth rates of between 0.3 ~ 0.8% up until 2020 before starting to see a very slight year-on-year decline from 2021 onwards.
Historic Kudan Kaikan redevelopment plans announced
On September 21st, the Kanto Local Finance Bureau announced that Tokyu Land had won the competitive bidding process for the redevelopment of the Kudan Kaikan building in central Tokyo. The bidding price will be announced after Tokyu signs the contractural agreement in March 2018.
The developer will lease the 8,700 sqm block of land under a 70-year fixed term and will build a high-rise office tower on the site. The north-eastern corner of the original Kudan Kaikan building will be preserved and retrofitted using a base-isolation system (menshin-kozo).
Average asking price of an apartment in Tokyo up 1.1% from last year
According to Tokyo Kantei, the average asking price of a 70 sqm (753 sq ft) second-hand apartment across greater Tokyo was 35,660,000 Yen in August 2017, up 0.1% from the previous month and up 1.3% from last year. Prices continue to remain stable in the 35 million Yen range since November 2016. The average building age was 23.0 years.
In Tokyo’s 23 wards the average asking price was 53,380,000 Yen, up 0.2% from the previous month and up 1.1% from last year. The average building age was 22.4 years.
Japan's supply of new office space hits lowest level since 1980
According to the Japan Real Estate Institute, 1.35 million square meters (approx. 14.5 million sq ft) of new office space was supplied across the country in 2016, down 25% from 2016 and the lowest level seen since 1980. 84% of the new supply was centered in Tokyo’s 23 wards.
Sapporo, Sendai, Saitama, Kyoto and Kobe saw no new office buildings supplied last year, although there are several new buildings planned for completion over the next two years. Kyoto City, however, has no new office supply planned for the near future. Kyoto is reportedly suffering from a severe shortage of office space with office brokerage Miki Shoji reporting a current office vacancy rate around 2%, down from 12% seen in 2010.
Standard land prices in Tokyo increase for 5th year in a row, while nationwide commercial prices increase for first time in 10 years
The Ministry of Land, Infrastructure, Transport and Tourism (MLIT), announced the Standard Land Prices on September 19th. In the Tokyo metropolitan area, land prices across all uses increased by 3.0% from last year, recording the fifth consecutive increase in land prices. Commercial land prices in Tokyo’s 23 wards increased by an average of 5.9%, after recording a 4.9% increase in 2015. Shibuya Ward was in top place with 8.6% growth (6.6% in 2016).
The survey site under the Ginza Owaricho Tower in Ginza 6 Chome saw a 21.8% increase in land prices over the past 12 months.
Nationwide, standard land prices were down 0.6% for residential land, but up 0.5% for commercial land. This is the first time in 10 years to see an increase in commercial land prices.
Kyoto’s tourism boom drives commercial land price growthRead more
Maison Mita to be redeveloped into high-rise
Maison Mita, a 67-unit, 49-year old condominium in central Tokyo’s Mita neighbourhood will be redeveloped into a 77m tall, 23-storey high rise by both Mitsubishi Jisho Residence and Asahi Kasei Realty & Residence. Demolition of the current building is expected to start in December 2017 and the new building is due for completion by December 2020.
Apartment owners had been discussing redevelopment for the past 10 years.
Apartments in the older building ranged in size from 34 ~ 108 sqm, with a mixture of studio and family-oriented layouts. The building was developed by Kyoei Life Insurance and completed in 1968. Kyoei developed several Maison-named condominiums in central Tokyo in the 1960s, 70’s and ‘80s. The insurance company filed for bankruptcy with liabilities of 4.6 trillion Yen in 2000 in what was said to have been the country’s biggest bankruptcy since WWII.
Average apartment rent down in greater Tokyo
According to Tokyo Kantei, the average monthly rent of a condominium-type apartment across greater Tokyo in August was 2,628 Yen/sqm, down 0.1% from the previous month and down 1.2% from last year. The average apartment size was 59.74 sqm and the average building age was 21.1 years.