Market Trends

Average Rent in Tokyo at Highest Point Since Global Financial Crisis

In August, the average rent per square meter for a condominium in metropolitan Tokyo and Tokyo’s 23 wards reached 3,177 yen/sqm and 3,314 yen/sqm, respectively, the highest points since the 2008 global financial crisis (GFC), based on Real Estate Japan’s analysis of data released by Tokyo Kantei.

Metropolitan Tokyo since the GFC

 

Tokyo Metro Avg Rent Graph

The average rent per square meter for a condo in metropolitan Tokyo (which includes Tokyo and its suburban cities) reached a peak of 3,232 yen/sqm in September 2008, the same month that Lehman Brothers declared bankruptcy.

Average rent continued on a downward trend, troughing in October 2012 at 2,880yen/sqm.

From November to December 2012, the average rent jumped 3.1% to 2,978yen/sqm but remained mostly flat through 2013, until November of that year.

Average rent per square meter in metro Tokyo has been on a steady uptrend since November 2013.

Metropolitan Tokyo has seen average rent increase about 10.3% from the October 2012 nadir, but is still about 1.7% lower than the peak reached in September 2008.

Tokyo Metro Avg Rent Data

Tokyo 23 Wards since the GFC

The average rent chart for Tokyo’s 23 wards is similar to that for metropolitan Tokyo as a whole.

Tokyo 23 Wards Avg Rent Graph

The average rent per square meter for a condo in Tokyo’s 23 wards reached a peak of 3,371 in September 2008.

Average rent continued on a downward trajectory, bottoming in October 2012 at 2,979yen/sqm, but has been on a steady climb since then.

Average rent per square meter in Tokyo’s 23 wards has increased about 11.2% since the low point reached in October 2012, but is about 1.7% off the high reached in September 2008.

Tokyo 23 Wards Avg Rent Data

Osaka Prefecture since the GFC

Average rent in Osaka (Prefecture) has behaved very differently compared to Tokyo.

Osaka Condo Avg Rent Graph

Since Tokyo Kantei started reporting average rent data for major national markets in July 2006, the average rent per square meter in Osaka Prefecture reached a low point in April 2007 (1,519 yen/sqm) and a peak in March this year (1,953 yen/sqm), a difference of about 28.6%.

This is a much wider swing than for the Tokyo metropolitan area which experienced a drop of about 12.2% between the September 2008 peak and October 2012 trough.

Osaka Condo Avg Rent Data

In the fall of 2008, when average rent was peaking in Tokyo, the average rent per square meter in Osaka did not seemingly experience a Lehman Shock effect. Average rent in Osaka has never dropped below the April 2007 low point.

However, there was a sharp drop from December 2009 to February 2010 of about 9.2%.

Rent levels sharply increased (up 5.9%) in December 2012 compared to November 2012 and were on an upward trajectory until June 2014.

However, average rent in Osaka Prefecture has had several monthly decreases since then, and is not on the clear uptrend seen in Tokyo.

—–

Photo: From the photographer’s description, “Tokyo, view at night of the city from the top of the Mori tower, inside the Roppongi district, with the Tokyo tower in background recalling the Eiffel tower of Paris….”

Photo Credit: Moyan Brenn on Flickr