Tokyo apartment prices drop from record in 2024 as market calms
TOKYO new condo prices fell last year, moderating to a more sustainable growth trend after a big jump in 2023.
The average price of a new apartment for sale in the Japanese capital and surrounding areas slipped 3.5 per cent to 78 million yen (S$675,558), according to the Real Estate Economic Institute. It was the first decrease in six years, and came after prices rose nearly 30 per cent to a record in 2023 when several luxury condos went up for sale.
The dip is unlikely to affect the overall trajectory of rising values of new homes in the Japanese capital, which is being driven by factors including low supply and higher costs of raw materials and labour, analysts said.
“We should not see the temporary decrease as a peak,” said Tetsuya Kaneko, head of research at real estate company Savills Japan. “The general upward trend is here to stay, especially considering the overall inflationary trend and labour shortage.”
The number of new units for sale in the Tokyo metropolitan area fell 14.4 per cent last year to a record low, according to the report released on Thursday (Jan 23). Average prices of new condos in central Tokyo dropped 2.6 per cent to 112 million yen.
The Bank of Japan is widely expected to raise interest rates on Friday, but its impact on the real estate market is likely to be mild as a crowded banking industry keeps a lid on mortgage costs.
“An interest-rate increase would be seen as negative, but its magnitude is offset by the competition among banks,” said Mari Kumagai, head of Japan research at real estate brokerage Cushman & Wakefield. BLOOMBERG
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