Photo/Illutration High-rise condos along the coastal area of Tokyo Bay (Asahi Shimbun file photo)

Close to half of buyers of high-rise condominium units in urban areas intend to sell the properties after prices rise, according to a survey by a company operating a real estate information website.

From the time the units were purchased, 45.9 percent of respondents said they intended to sell them, compared with 36.8 percent who intended to live there for as long as possible, the survey by Lifull Home’s Soken research institute showed.

According to Toshiaki Nakayama, vice president of the company, high-rise condominiums in major urban areas have two different purposes for owners: a residence or an investment tool.

The survey covered 311 individuals who sold off their high-rise condominiums in Tokyo, Kanagawa, Chiba, Saitama and Osaka prefectures.

When asked the reason for making the sale, the most popular response, at 37 percent, was “it could be sold at a high price because real estate values were rising.”

When respondents were asked if they regretted their decision to sell, 33.8 percent said they felt they could have sold the units at an even higher price.

The increased eye toward investment as well as the higher cost of construction materials and labor has led to rising condominium prices.

According to Tokyo-based Real Estate Economic Institute Co., the average price of a new condo in Japan exceeded 60 million yen ($402,000) for the first time in 2024, setting a record high for the eighth straight year.

Nakayama said central parts of Tokyo and Osaka were areas where prices for high-rise condos increased in an asset-inflated bubble manner.

Large gains can made in short periods, and, according to the Lifull survey, 57.9 percent of those who sold their condos said they made a profit of at least 10 million yen.

Nakayama said “power couples” who both have high incomes and are eager to make real estate purchases are fueling the attention on high-rise condos.

Tokyo-based Nomura Research Institute Ltd. (NRI) found a high degree of interest in buying real estate among urban households with annual incomes of at least 30 million yen.

These couples expect to continue increasing their assets through promotions and raises at the major companies where they work.

That means a growing number of couples can afford the high prices of condos in the 23 wards of Tokyo, which in 2023 exceeded 100 million yen on average per unit, according to the Real Estate Economic Institute.

NRI found that the number of wealthy households with total net financial assets over 100 million yen but under 500 million yen almost doubled from 813,000 in 2005 to 1.535 million in 2023.

But Nakayama warned that the fundamentals of investment should not be forgotten.

“The rise of high-rise condo prices will stop one day,” he said. “People should not forget that if they continue to sell and buy such condos as a way of increasing assets, there is the possibility of a major loss one day.”

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