New apartment prices in Sendai 20% higher than bubble era


New condominium prices in the Sendai area continue to surge, with the average price in the first half of 2015 increasing by 10% from the previous year to 42,620,000 Yen (343,000 USD). This price is now around 40% higher than pre-Tohoku earthquake prices and 20% higher than prices during Japan’s asset price bubble in the late 1980s.

Construction costs have increased following the disaster due, but the increase in prices has been met with an increase in demand and a relative shortage in supply of new construction.

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New apartment prices in Sendai now higher than the the peak of the bubble in 1991

According to advertising firm DG Communications, the average price of a brand new apartment in greater Sendai in 2013 was 35,599,000 Yen, up 7.3% from 2012. This is now 0.7% higher than the peak of 35,339,000 Yen seen in 1991 during Japan’s asset price bubble.

The average price per square meter was 468,200 Yen, up 9.0% from the previous year.

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Apartment prices skyrocket in Sendai

According to the latest data released by Tokyo Kantei, the average list price of a second-hand apartment in Sendai City in the first quarter of 2013 is 35.5% higher than in early 2011.

Prior to the Tohoku disaster, average apartment prices had dropped to 565,000 Yen per Tsubo* (171,200 Yen/sqm). Following the disaster, prices have since risen to 766,000 Yen per Tsubo (232,100 Yen/sqm).

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The leaning tower of Sendai

Sunny Heights Takasago, a 14-storey, 189 unit apartment building in Sendai City, suffered serious damage during the March 11 Earthquake which left it tilting on an angle.

Following the earthquake, 400 residents evacuated their apartments and stayed in the 1st floor meeting area or at the nearby school hall. The pillars in Sunny Heights had developed cracks and the reinforcing steel was poking out of the concrete. From a distance it was easy to see how much the building was leaning.

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Temporary upswing in real estate market in Sendai

The 2011 rosenka land valuations released by the National Tax Agency on July 1st showed a decline in land prices across Japan for the third continuous year. Concern is rising, however, over a large scale crash in prices in areas of Northern Japan that were affected by the Tsunami and Fukushima Daiichi Nuclear Power Plant where real estate transactions have almost ceased.

Sendai City, on the other hand, is experiencing a hike in emergency demand from displaced residents.

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