Contract ratio on new apartments in greater Tokyo reaches lowest level in 27 years

According to the Real Estate Economic Institute’s report on the new apartment market for 2018, a total of 37,132 brand new apartments were released for sale across the greater Tokyo area (Tokyo, Kanagawa, Saitama and Chiba Prefectures), up 3.4% from 2017. The average price of a new apartment was 58,710,000 Yen, down 0.6% from the previous year. In Tokyo’s 23 wards the average price was 71,420,000 Yen, up 0.7% from 2017. 

The average price per square meter was 869,000 Yen, up 1.2% from 2017 and the sixth year in a row to see a year-on-year increase. In Tokyo’s 23 wards the average price per square meter was 1,138,000 Yen, up 5.1% from 2017. In December, the average price in the 23 wards reached 1,243,000 Yen/sqm. 

The contract ratio for the first month of sales was 62.1%, down 6 points from 2017 and below the 70% line said to indicate healthy market conditions. This is the third year in a row to see a contract ratio in the 60% range. It is also the lowest ratio seen since 1991 (58.3%). The contract ratio for December 2018 was 49.4%, down 23.1 points from 12 months prior and down 4.5 points from November.

1,800 new apartments priced over 100 million Yen were released for sale, down 6.6% from 2017. The biggest supply was in 1990 with 3,079 apartments. The most expensive apartment released for sale in 2018 was in The Court Jingu-Gaien where a 314.20 sqm (3,381 sq.ft) apartment was listed for 1.53 billion Yen (approx. 14 million USD). The 23-storey, 409-unit condominium is currently under construction on the southern side of the Olympic Stadium in central Tokyo and is due for completion in April 2020.

Supply in Tokyo’s 23 wards was down 0.4% and down 3.8% in Kanagawa Prefecture. Saitama saw a 8.5% increase, while Chiba saw a 48.5% increase. The biggest supply of new construction was in 2000 with a total of 95,635 new units. 

The Real Estate Economic Institute, January 22, 2019.
The Sankei Shimbun, January 23, 2019.

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