The average apartment rent across Japan’s major cities has fallen even further. In July, the average rent for a condominium in Tokyo’s 23-ku fell below 3,000 Yen/sqm a month for the first time in over seven years. The rent in rental-only buildings has also fallen.
According to Tokyo Kantei, the average rent for a condominium apartment in July was 2,995 Yen/sqm a month, down 1.8% from July 2011.
In Osaka, the average rent fell 1.1% from one year prior to 1,938 Yen/sqm a month.The last time this number fell below 3,000 Yen was in October 2005. It is now 12.3% lower than the previous peak of July 2008.
Tokyo Kantei calculates data for condominiums and rental-only properties separately. Condominiums are owned by private individuals and generally have a higher quality of finish than rental-only properties owned by funds or REITs. As such, a higher rent is usually commanded in a condominium.
However, in a climate where salaries are low and jobs are less secure, renting a condominium is becoming more and more difficult for the typical tenant and demand is falling.
Large companies and funds that own rental-only buildings are able to offer competitive deals such as no deposit, no key money, and several months of free rent in order to reduce their vacancy rates.
The average residential rent for a rental-only building in greater Tokyo in June was 2,605 Yen, down 1.5% from one year prior. There is a shift in demand from large developments that typically offer higher rent to cheaper apartments.
Source: The Nikkei Shimbun, August 23, 2012.
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