How much does an apartment cost in Tokyo – Sept 2022 Update

Sales prices of newly constructed apartments in the greater Tokyo region were up in September, as developers continued to rein in supply.

The average sales price for a new apartment sold in the greater Tokyo metro region reached ¥66,530,000 ($450,000 USD), a year-on-year increase of 1.0% and the first time in three months that prices were up year-on-year. September average sales prices also represented a 9.0% increase compared to August.

As we noted in last months’ report, there is not enough evidence to support the idea that the drop in average sales prices in July and August means that we are seeing a shift in the price trend. Indeed, the September average sales data provides support for the theory that upward price pressure will continue, as supply continues to be extremely constricted.

In the Real Estate Economic Institute’s overview of the Tokyo new condominium market for the April to September period, it was reported that developers have pulled back on supply because of soaring material costs due to inflation and the weak yen. They also do not want to depress prices by releasing too much new inventory.

The REEI reported that from April to September, the average sales price of a newly constructed apartment in the greater Tokyo region was ¥63,330,000 ($423,000 USD). This was a year-on-year drop of 5.5%, but it was also the second highest price ever recorded for the April to September period. The record high price was set in the April to September 2021 period (at ¥67,020,000). The September average sales price for the greater Tokyo region was just 0.73% lower than the record high average sales price for April to September last year.

Supply woes continue

The supply of newly constructed condominiums released for sale in September fell 11.9% year-on-year in September, the second consecutive month of year-on-year decline.

Supply of newly constructed apartments in the greater Tokyo metro region. Source: Real Estate Economic Research Institute (REEI), September 2022

As of the end of September, total inventory of newly constructed apartments in the greater Tokyo region came to 4,794 units, an increase of 35 units compared to August.

At the end of September last year, total inventory stood at 5,614 units, or 820 more units than this year.

Buyer’s market?

The contract rate is the number of units contracted for sale divided by the number of units offered for sale. The 70% mark is considered the dividing line between a seller’s and buyer’s market. The average contract rate for greater Tokyo was 72.1% in the first half of 2022, which means that the first half of this year was a strong seller’s market, as demand exceeded supply.

In September, the contract rate for the greater Tokyo metro region was 61.6%, down 6.1 points year-on-year and down and down 0.4 points compared to August. Last month was also the fourth consecutive month in which the contract rate dropped below 70 percent.

By this measure, the greater Tokyo metro region can be said to be in a condition where buyers are not quickly snapping up new properties. However, it doesn’t mean that buyers are enjoying an advantage in sales prices, as indicated by the average sales price recorded for September.

Perhaps a more accurate description would be that buyers are more cautious about plunging into the newly constructed apartment market. In addition to newly built condominiums, more and more buyers are also considering buying previously owned condominiums and detached houses.

Consumers also have to carefully consider where interest rates might be headed. The Bank of Japan has pledged to keep interest rates low for the foreseeable future, but more and more buyers are opting for variable rate loans. If they are financing a purchase, how much they can afford to spend on a new apartment is highly dependent on the mortgage rate.

A low interest rate environment has been one of the key factors behind the strong residential housing market in Japan. If lower interest rates continue to be on the table in the near future, buyers will continue to have the incentive to borrow in order to buy a home; which keeps the demand side of the equation strong. In this case, the contract rate would not completely reflect whether buyers have an advantage over sellers as we head into the traditionally slower winter months.


  • REEI, September 2022 Tokyo New Condominium Market Trends Report (PDF in Japanese)REEI, August 2022 Tokyo New Condominium Market Trends Report (PDF in Japanese)REEI, September 2021 Tokyo New Condominium Market Trends Report – Corrected Version (PDF in Japanese)
  • REEI, April to September 2021 Tokyo New Condominium Market Overview (PDF in Japanese)

Photo credit: iStock/igaguri_1

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