New apartment prices in Kyoto drop as developers are forced out of city center

The supply of brand new apartments in Kyoto City in the first half of 2017 increased by 21.7% from the same period in 2016, while the average sale price saw a steep drop of 24.1% to 43,280,000 Yen. The reason for the decrease in the price was due to intense competition for hotel development sites in the city center which has forced apartment developers to shift their focus to the city’s outskirts where prices are cheaper.

In the first half of 2016, a number of luxury condominiums were offered for sale in Kyoto, pulling up average sale prices. However, with tourist numbers continuing to rise, sites that were originally slated for residential projects are now being converted to hotels which can provide better returns. This has also pushed up land prices.

New apartment prices in Kyoto reach record high in 2016

The average price of a new apartment in Kyoto City increased for the sixth year in a row, reaching 52,960,000 Yen in 2016. The city is the second most expensive region in Japan for new apartments, with Tokyo’s 23 wards in top place with an average price of 66,290,000 Yen in 2016.

Prices have been pushed up by several factors, including increasing construction costs, fierce competition between developers looking for sites for hotels, and growing demand from out-of-town buyers.