Construction scandal shakes new apartment sales in October

Brillia Towers Meguro
Sold Out: Brillia Towers Meguro

According to the Real Estate Economic Institute, 2,921 new apartments were released for sale in October, up 20.2% from the previous month but down 6.5% from last year. This is the second month in a row to see a decline in supply from the previous year and has been attributed to both an increase in prices as well as the discovery of a faulty condominium in Yokohama last month which has caused turmoil in the real estate industry. Before news broke of the construction mishap, the Institute were predicting 3,500 apartments to be offered for sale in October. Although Autumn is typically a period of heavy sales activity by developers, the sales of several projects were delayed due to the uncertainty following the Yokohama apartment scandal. Only one large-scale project (a building containing over 100 units) went on sale in October, down from four large-scale projects last year.

A researcher from the Institute said that visitor numbers to apartment show rooms were relatively flat, and it is possible that developers will continue to delay sales until consumer confidence in the new apartment market improves.

2,010 apartments were sold, making the contract rate 68.8%, up 2.8 points from the previous month and up 5.5 points from last year.

475 apartments in high-rise buildings (over 20 storeys) were offered for sale, up 36.5% from last year. The contract rate was 79.8%.

The average price of a brand new apartment released for sale in greater Tokyo was 53,640,000 Yen, down 0.5% from the previous month but up 17.6% from last year. The average price per square meter was 759,000 Yen, down 0.3% from the previous month but up 19.0% from last year.

The following buildings saw same-day sellouts in October:

  • Brillia The Tower Tokyo Yaesu Avenue, Chuo-ku: 60 apartments sold; average price of 84,630,000 Yen.
  • Brillia Towers Meguro, Shinagawa-ku: 20 apartments sold; average price of 107,580,000 Yen.
  • Casare Ome Suehirocho, Ome City: 10 apartments sold; average price of 29,810,000 Yen.
  • Blue Harbour Tower Minato Mirai, Yokohama City: 29 apartments sold; average price of 79,330,000 Yen.

Brillia Towers Meguro is now completely sold out, even though it is two years away from completion. In the final round of sales, 232 purchase applications were submitted on the 20 apartments made available for sale. The most popular apartment received 38 applications.

*Same-day sellouts occur when all of the apartments released for sale in a particular sales campaign receive purchase applications. As many developers release apartments for sale in stages, it does not necessarily mean that all apartments in the building have sold.

Tokyo Metropolitan Area Sales

1,129 new apartments were released for sale in Tokyo’s 23 wards, down 2.4% from the previous month and down 18.2% from last year. 748 apartments were sold, making the contract rate 66.3%.

The average new apartment price was 68,770,000 Yen, up 5.9% from the previous month and up 28.8% from last year. The average price per square meter was 981,000 Yen, up 3.4% from the previous month and up 26.2% from last year. 64 apartments priced over 100 million Yen were sold, with a contract rate of 71.9%.

No. of sales by apartment type in Tokyo’s 23 wards:

  • Studio: 7 (100% contract rate)
  • 1-Bedroom: 28 (58.3%)
  • 2-Bedroom: 106 (68.8%)
  • 3-Bedroom: 564 (66.6%)
  • 4-Bedroom: 40 (57.1%)

Average sale price by location:

  • Tokyo 23 wards: 68,770,000 yen (+28.8% from Oct. 2014)
  • Western Tokyo: 45,760,000 Yen (+1.1%)
  • Kanagawa Prefecture: 50,700,000 Yen (+29.1%)
  • Saitama Prefecture: 38,540,000 Yen (+8.3%)
  • Chiba Prefecture: 32,810,000 Yen (-14.8%)

Average sale price per square meter:

  • Tokyo 23 wards: 981,000 Yen (+26.3% from Oct. 2014)
  • Western Tokyo: 612,000 Yen (-0.2%)
  • Kanagawa Prefecture: 728,000 Yen (+32.6%)
  • Saitama Prefecture: 564,000 Yen (+9.3%)
  • Chiba Prefecture: 449,000 Yen (-8.2%)

The Institute is expecting 3,500 apartments to be released for sale in November.

Sources:
The Real Estate Economic Institute, November 17, 2015.
The Nikkei Shimbun, November 17, 2015.

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