Photo/Illutration Towering apartment blocks rise in Tokyo’s Chuo Ward. (Asahi Shimbun file photo)

Real estate markets in metropolitan areas continue to thrive, with the average price of a new condominium in Tokyo’s 23 central wards reaching 111.81 million yen ($719,000) in 2024.

Although this represents a 2.6 percent decrease from 2023 due to fewer ultra-luxury units being sold, the figure still exceeds the 100-million-yen mark for the second consecutive year, according to data released by the Real Estate Economic Institute Co. on Jan. 23.

In the rest of Tokyo, the average price climbed to 58.9 million yen, up 8.9 percent, while in Kanagawa Prefecture, it reached 64.32 million yen, up 6 percent.

Saitama and Chiba prefectures also saw significant increases, with average prices of 55.42 million yen, up 13.8 percent, and 56.89 million yen, up 18.9 percent, respectively.

These increases are primarily attributed to rising construction costs.

In Osaka, the average condo price soared by a substantial 45.7 percent to 61.26 million yen, driven by the sale of ultra-luxury units in the redevelopment area north of JR Osaka Station.

The average price for the entire Kinki region, which includes Osaka and five neighboring prefectures, also increased by 14.8 percent to 53.57 million yen.

In contrast, the number of new apartments launched in Tokyo and the three surrounding prefectures hit a record low of 23,003 units, marking a 14.4 percent decrease from the previous year.

This decline is largely due to construction delays caused by a labor shortage, particularly in the capital.

The ratio of new homes in that area bought within their first month on the market also dropped by 3.4 percentage points, to 66.9 percent.

The ratio fell below the 70 percent threshold, considered a sign of a healthy market, for the first time in four years.

Chiba Prefecture and areas in Tokyo outside the 23 wards experienced even steeper declines, with sales dropping by 9 points and 10.8 points, respectively.

The institute attributes this slowdown to a combination of rising housing prices and the overall cost of living, which has begun to dampen demand in suburban areas.

Still, the trend of rising condo prices is expected to continue this year.

“Construction costs will continue to rise, leading to further increases in the prices of new condominiums that began construction in 2024,” said Tadashi Matsuda from the institute.

However, he also noted that consumers in suburban areas may struggle to keep up with the rapid pace of price increases, suggesting that the market could eventually reach a plateau.

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