Tokyo Kantei released a report on the market values of ‘vintage’ apartment buildings and their retain or lose value over time. This year’s survey was a follow up to the last survey carried out in 2009.
Based on their findings, the vintage properties most likely to see values erode over time were:
1. In buildings over 40 years old;
2. With low earning potential; and
3. Located outside of the Yamanote Line.
40 year+ buildings have the highest risk of losing value
Of the surveyed properties that held their value over time, 91.8% were in buildings less than 40 years old.
Of the vintage apartments that saw a drop in value, 26.7% of them were in buildings over 40 years old. Older buildings, particularly those dating from the 1970s and earlier, may be built to older earthquake codes, tend to require costly maintenance and repairs since they may have ageing plumbing, will require elevators to be replaced and are generally getting towards the end of their useful service life. These factors are the main contributors to their declining value.
Low rents lead to low prices
The average monthly rent of a vintage apartment that has lost value over time was 3,212 Yen/sqm, while the average for an apartment that has maintained or gained value over time was 3,915 Yen/sqm (approximately 22% higher).
The average total monthly rent for an apartment that lost value over time was 397,723 Yen, and 461,951 Yen for an apartment that increased or maintained its value. Over a year, this difference amounts to 770,736 Yen.
Location is key
As expected, location plays a key part in maintaining a property’s value over time. Vintage apartments located in central Tokyo had a better chance of maintaining or increasing value over time, while those outside of central Tokyo tended to see values fall.
Percentage of apartments to see an increase or decrease in value:
Area | Maintain or increase in value | Drop in value | No sales data |
---|---|---|---|
Minato-ku | 54.5% | 26.0% | 19.5% |
Shibuya-ku | 65.3% | 20.4% | 14.3% |
Chiyoda-ku | 77.8% | 11.1% | 11.1% |
Setagaya-ku | 27.8% | 66.7% | 5.5% |
Shinjuku-ku | 50.0% | 50.5% | – |
Shinagawa-ku | 57.1% | 42.9% | – |
Ota-ku | 50.0% | 50.0% | – |
Meguro-ku | 28.6% | 71.4% | – |
Bunkyo-ku | – | 100.0% | – |
Suginami-ku | – | 50.0% | 50.0% |
The most expensive vintage apartment sales
The following is a ranking of the most expensive vintage apartments sold in the Tokyo area between 2013 ~ 2015.
Property | Price per square meter |
---|---|
[1] Sanbancho Park Terrace Sakura-en
Location: Sanbancho, Chiyoda-ku |
2,994,000 Yen |
[2] Park Mansion Chidorigafuchi
Location: Kudan-minami, Chiyoda-ku |
2,952,000 Yen |
[3] Park Court Sanbancho
Location: Sanbancho, Chiyoda-ku |
2,343,000 Yen |
[4] Azabu Kasumicho Park Mansion
Location: Nishiazabu, Minato-ku |
2,336,000 Yen |
[5] The House Minamiazabu
Location: Minamiazabu, Minato-ku |
2,157,000 Yen |
[6] The Upper Residences at Minami Aoyama
Location: Minami Aoyama, Minato-ku |
2,109,000 Yen |
[7] Park Mansion Minamiazabu
Location: Minamiazabu, Minato-ku |
2,003,000 Yen |
[8] Grand Hills Ichibancho
Location: Ichibancho, Chiyoda-ku |
1,963,000 Yen |
[9] Hiroo Garden Hills
Location: Hiroo, Shibuya-ku |
1,960,000 Yen |
[10] Diana Garden Daikanyama
Location: Aobadai, Meguro-ku |
1,911,000 Yen |
[16] Minami Aoyama Daiichi Mansions
Location: Minami Aoyama, Minato-ku |
1,758,000 Yen |
[20] Akasaka Parkhouse
Location: Akasaka, Minato-ku |
1,636,000 Yen |
[30] Domus Minamiazabu
Location: Minamiazabu, Minato-ku |
1,529,000 Yen |
Tokyo Kantei defines a ‘vintage’ apartment as the following:
- Built over 10 years ago
- Located in a predominantly residential area, or neighbourhood commercial area
- With a floor area of around 100 sqm (or at least 90 sqm)
- Where 90% of the sale listings in the building have been priced over 900,000 Yen/sqm.
Source: Tokyo Kantei, May 10, 2016.