Japan’s high-rise apartment market from 2018 to 2022 onwards

According to the Real Estate Economic Institute, there are currently 108,757 apartments in 294 high-rise buildings planned for completion across Japan from 2018 onwards. This is an increase of 9 buildings and 2,436 apartments from the previous survey point in March 2017.

73.8% of these apartments are centered in the greater Tokyo area, a 4.8 point decrease from 2017. Tokyo’s 23 wards accounted for a 51.1% share of the nationwide total, a 2.5 point decrease from last year. Chuo ward has the largest forecast supply with 12,514 apartments planned in the coming years, 22.5% of the total. This supply is limited to just 14 buildings, with an average of 894 apartments per building. Minato ward was in second place with 11,401 apartments planned in 33 buildings (an average of 345 apartments per building).

The Osaka region has seen an increase in the nationwide share, with 12.7% of the total, a 1.2 point increase from last year.

The development of high-rise apartments in Japan took off in the late 1990s, with high-rise apartment living considered the ultimate urban dream. A sharp increase in property prices in 2007 saw demand for apartments dry up. The onset of the global financial crisis was felt strongly in Japan, causing the cancellation or delay of many new developments. By 2010, high-rise apartment supply had dropped to 17,967 units nationwide, a 50% drop from 2009.

The devastating Tohoku earthquake and tsunami in 2011 saw real estate developers delay projects due to sluggish demand. This was particularly apparent in waterfront districts where the risk of liquefaction and tsunamis had caused buyers to shift their attention to projects on safer and higher ground. In 2011 the supply of high-rise apartments dropped to 13,321 units. The market began to show signs of a recovery in late 2012 with supply reaching 16,060 units. By 2013, developers had re-started large-scale high-rises in the Tokyo bayside area which pushed supply up to 19,759 units. A change to the inheritance tax deductions in 2015 pushed up domestic demand for high-rise apartments since they offer the best method of reducing the tax burden on heirs.

In 2017, 40 high-rise buildings containing 11,373 apartments were completed across Japan. Approximately half were located in the greater Tokyo region.

50+ story apartment buildings planned across Japan

BUILDINGSAPARTMENTS
[1] Nishi-Shinjuku 3 Project (Tokyo)2 x 65 storey3,200
[2] Toranomon-Azabudai District Project (Tokyo)53, 64 and 65 storey1,310
[3] Tsukishima 3 Project (Tokyo)59 storey1,120
[4] Kachidoki East Project (Tokyo)29, 45 and 58 storey3,255
[5] Bashamichi Project (Yokohama)58 storey1,176
[6] Harumi 5 Project (Tokyo)2 x 56 storey2,650
[7] Toyomi 5 Project (Tokyo)2 x 56 storey2,150
[8] Atago 1 Project (Tokyo)56 storey600
[9] Musashikosugi Project (Kawasaki)53 storey622
[10] Hoshinocho Project (Yokohama)42, 47 and 52 storey2,500

 

*High-rise refers to a building of 20 stories and above.

Source: The Real Estate Economic Institute, April 24, 2018.

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