By GO TAKAHASHI/ Staff Writer
January 27, 2023 at 19:15 JST
New condominiums in the Tokyo metropolitan area fetched their highest prices ever in 2022, breaking records for a second year straight on the back of low mortgage rates and telecommuters seeking out larger apartments.
The data was released on Jan. 26 by the Real Estate Economic Institute Co.
The average price of new condominiums in Tokyo and Kanagawa, Saitama and Chiba prefectures rose for the fourth year in a row, this time by 0.4 percent from 2021 to 62.88 million yen ($484,300), the highest point since 1973, when comparable data became available.
“Construction costs are considerably higher for properties that will be put on the market this year,” said Tadashi Matsuda from the Real Estate Economic Institute. “It’s quite possible that prices will surge even higher.”
The average price per square meter rose 1.6 percent to 951,000 yen, notching a new high for the second year in a row and marking an entire decade worth of escalating prices.
On the other hand, the number of apartments sold fell 12.1 percent to 29,569. Of those, nearly 40 percent, or 10,797 units, are from the 23 wards of Tokyo’s central area and had an average price of 82.36 million yen, down 0.7 percent from the previous year.
In Saitama Prefecture, the average price rose 9.7 percent to 52.67 million yen while Chiba Prefecture saw an increase of 6.7 percent to 46.03 million yen.
For the rest of Tokyo, the figure increased 3.4 percent to 52.33 million yen, while Kanagawa Prefecture saw a 2.7 percent increase to 54.11 million yen.
Some areas saw all the apartments on their block sell out in a single day thanks to their proximity to train stations, particularly in Yokohama, Chiba city, Funabashi and Saitama city.
Demand for a bigger, more comfortable house remained strong in 2022 as more and more people worked remotely during the COVID-19 pandemic.
Led by rising labor and construction costs, the average price of apartments has surged by about 50 percent in the last two decades. That is a marked contrast from the previous period of price stability, when the figure remained at around 40 million yen in the aftermath of the country’s stock and real estate market crash in the early 1990s.
Construction has been booming in Tokyo and its suburbs in recent years, with high-rise condominiums with 20 floors or more in redevelopment projects going on in convenient locations with good access to train stations.
The estate boom of the late 1980s saw a trend of people purchasing studio apartments as investment properties. But now most customers are buying bigger, pricier apartments to live in themselves.
This demand is being driven by wealthy dual-income couples, as well as older people moving into more convenient downtown locations after their children have grown up and left home.
The trend is also being bolstered by the Bank of Japan's low interest rate policy, which has kept mortgage rates at historically low levels.
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