According to Tokyo Kantei, the average monthly rent of a condominium in Tokyo’s 23 wards was 3,464 Yen/sqm in August, down 0.5% from the previous month but up 5.1% from last year. This is the 9th month in a row to see a year-on-year increase. The average apartment size was 55.47 sqm and the average building age was 19.5 years.
It has often been said that Japanese consumers prefer new construction over old. However, this way of thinking has started to change over the past few years with home buyers turning their attention to the existing home market. In 2016, sales of existing ‘second-hand’ apartments in greater Tokyo exceeded those of brand-new apartments for the first time ever. This has not gone unnoticed by Japan’s major real estate developers, who, once focusing solely on new construction, are now entering the growing renovation market. 15 of the top 20 developers are already active in this market.
Fuji Keizai, a marketing research and consulting group, forecasts over 27,000 homes and apartments to be renovated and sold across Japan by professional house-flippers in 2018, up 10% from 2017. By 2020, this number is forecasted to reach 35,000 units, with a total of 131.4 billion Yen spent on renovations.
According to REINS, 2,303 second-hand apartments were sold across greater Tokyo in August, down 26.6% from the previous month but up 1.7% from last year. The average sale price was 33,180,000 Yen, down 1.3% from the previous month but up 2.5% from last year. The average price per square meter was 521,000 Yen, down 300 Yen from the previous month but up 3.2% from last year. This is the 68th month in a row to record a year-on-year increase in prices.
The Tokyo government is working towards introducing a system to encourage the redevelopment of ageing apartments by offering developers additional floor space ratios on other projects. The new system could potentially be introduced in 2019.
The following is a selection of apartments that were reported to have sold in central Tokyo during the month of August 2018:
Takenaka Corporation, Tokyu Corporation and TOHO-LEO Co., have jointly restored a 91-year old historic residence in Tokyo’s Chiyoda ward and converted it into a business innovation hub.
The current owner, a descendent of the original owner, keen to find a way to preserve the home, entered into a master lease agreement with the three companies. The members-only innovation hub, called ‘kudan house’, officially opens in September.
According to Tokyo Kantei, the average monthly rent of a condominium in Tokyo’s 23 wards was 3,481 Yen/sqm in July, down 0.1% from the previous month but up 5.4% from last year. This is the 8th month in a row to see a year-on-year increase. The average apartment size was 55.40 sqm and the average building age was 18.9 years.
One of the leading examples of Japan’s metabolist school of architecture – Nakagin Capsule Tower – is inching closer towards a potential fate of demolition after the land under the building recently changed hands.
On June 29, the land underneath the Nakagin Capsule Tower building was sold to CTB GK, a limited liability company established only earlier that month. The sale included the land, the 1st floor retail space, 2nd floor office space, 16 capsules and two buildings behind the Capsule Tower. The seller was Nakagin Group, the developer of the building. The new owner promptly informed the chairperson of the apartment owners association of their intent to redevelop the site.
According to Tokyo Kantei, the average asking price of a 70 sqm (753 sq.ft) second-hand apartment across greater Tokyo was 36,340,000 Yen in July, up 0.3% from the previous month and up 2.0% from last year. The average building age was 23.9 years.
According to the quarterly LOOK Report published by the Ministry of Land, Infrastructure, Transport and Tourism (MLIT), land prices in Japan’s major cities in the second quarter of 2018 have increased in 95 of the 100 surveyed locations. This is the the highest share in the history of reporting, beating a previous record of 91 locations seen in the previous quarter.
A gradual trend of land price growth continues across major cities. In particular, commercial land around transport hubs in regional centers has seen land prices go from no movement to a slight increase. In Tokyo, residential land prices in Bancho, Tsukuda / Tsukishima and Kichijoji have also shifted to an increasing trend.