The Real Estate Economic Research Institute (REERI) has released its 2022 forecast for supply and price trends in the new condominium market for the Kansai region, which consists of the prefectures of Nara, Wakayama, Kyoto, Osaka, Hyogo and Shiga.
Below are the key takeaways from the Kansai report.
For the Tokyo capital region report, please see: Tokyo Apartment Market Forecast: Trends to watch for in 2022
Supply in the Kansai region is forecast to increase by 2.2%
The REERI forecasts that developers in Kansai will release about 18,500 newly constructed apartments for sale in the region, which would be a a year-on-year of 2.2%. This percentage growth is lower than the forecast increase in the greater Tokyo region of about 4.6%.
The forecast for Kansai would also bring new supply levels above those of 2019 (which came in at 18,042 units). Supply is forecast to increase in most areas of Kansai; Kobe city, Hyogo prefecture, and Kyoto city are expected to see drops in supply.
Supply and demand trends by region
Demand for super high-rise units in the Osaka city center is expected to remain strong, and developers will continue to supply apartments to meet this need.
In 2020, the supply of small 1K apartments intended for investment fell sharply due to COVID. Supply for this segment recovered somewhat in 2021 but has not climbed back up to pre-pandemic levels.
First-time sales of newly constructed units in Kyoto prefecture, Nara prefecture, and Shiga prefecture are expected to continue to do well in 2022.
However, first-time sales of super high-rise, large-scale developments in Kobe are forecast to fall sharply next year.
Supply by prefecture and city in Kansai
Supply forecast by prefecture or city in Kansai:
- Osaka city: 7,000 units (+6.1% YoY)
- Osaka prefecture (excluding city of Osaka): 4,000 units (+8.1%)
- Kobe: 1,800 units (-25.0%)
- Hyogo prefecture (excluding Kobe): 2,500 units (-3.8%)
- Kyoto City: 1,200 units (-11.8%)
- Kyoto prefecture (excluding city of Kyoto): 700 units (+40.0%)
- Nara prefecture: 300 units (+50.0%)
- Shiga prefecture: 900 units (+36.4%)
- Wakayama prefecture: 100 units (+25.0%)
- Kansai region total: 18,500 units (+2.2%)
Average sales prices in 2021
For the Kansai region as a whole, the average sales price in 2021 was ¥46,120,000 ($402,000 USD), a year-on-year increase of 10.3%. Average sales prices rose in every area except for Wakayama prefectures.
Here is the breakdown of average sales prices by area for January to November 2020:
- Osaka city: ¥48,260,000 (+16.9% YoY)
- Osaka prefecture (excluding city of Osaka): ¥46,450,000 (+3.8%)
- Kobe: ¥39,900,000 (+3.9%)
- Hyogo prefecture (excluding Kobe): ¥51,80,000 (+11.8%)
- Kyoto City: ¥40,170,000 (+10.1%)
- Kyoto prefecture (excluding city of Kyoto): ¥40,170,000 (+4.2%)
- Nara prefecture: ¥45,800,000 (+13.3%)
- Shiga prefecture: ¥41,980,000 (+9.4%)
- Wakayama prefecture: ¥35,840,000 (-2.1%)
- Kansai region average sales price: ¥46,120,000 (+10.3%)
Average sales prices by square meter in 2021
Average sales prices by square meter were up in all areas of Kansai.
- Osaka city: ¥912,000 (+7.4% YoY)
- Osaka prefecture (excluding city of Osaka): ¥643,000 (+3.7%)
- Kobe: ¥791,000 (+22.3%)
- Hyogo prefecture (excluding Kobe): ¥708,000 (+11.1%)
- Kyoto City: ¥841,000 (+12.6%)
- Kyoto prefecture (excluding city of Kyoto): ¥539,000 (+2.5%)
- Nara prefecture: ¥592,000 (+9.2%)
- Shiga prefecture: ¥581,000 (+10.7%)
- Wakayama prefecture: ¥493,000 (+0.6%)
- Kansai region average sales price per square meter: ¥758,000 (+9.7%)
Trends to watch for in 2022
The REERI forecasts that unit sales prices will continue to increase in 2022, with strong demand focused on family-friendly areas in the suburbs. Demand for larger family-friendly floor area apartments will also be strong.
The effects from the pandemic will likely have an affect on supply through at least 2023 and beyond.
The number of condominium developers in Kansai from January to November 2021 increased to 76 companies (compared with 71 companies for the same period in 2020).
Source: Real Estate Economic Research Institute, 2022 Kansai New Condominium Market Forecast (PDF in Japanese)
Lead image: Kobe city skyline, via iStock 1161402634
For more information about Osaka
Kansai New Condominium Market Report for January to June 2021
What can you buy in Osaka for $150,000 or less?
Osaka short-term apartments: Where to stay near Umeda
FAQs About Buying Property in Japan
Can a foreigner buy property in Japan?
Yes. You can buy property in Japan regardless of your nationality or country of origin. There are also no residency requirements for buying real estate in Japan. Securing financing as a resident foreigner is more complicated. For info on financing, please see Basic Requirements for Getting a Mortgage as a Foreigner in Japan
Seminars on Buying Property in Japan
Please see our seminar page for a current list of seminars on: how to buy a home in Japan, investing in Japanese real estate for beginners, how to apply for permanent residency in Japan, how to sell property in Japan, and much more.
How do I get a property loan as a foreigner in Japan?
Please see this article for information on: Getting a property loan as a foreigner in Japan
What is the process for buying a property in Japan?
Please see our step-by-step guide: Guide to Buying Property in Japan
See how much you can borrow and your monthly payments in yen: Yen Mortgage Loan Calculator
For information about purchase and brokerage fees: Breakdown of real estate purchase fees and taxes in Japan
Need to Know
Leasehold rights in Japan: Advantages and disadvantages
Earthquake building codes and technology in Japan
Can I legally rent out my home in Japan on AirBnB?
Repair reserve fund fees explained
Parking spaces in Japanese condominium buildings explained
Building your own home in Japan
Bilingual Real Estate Agent in Tokyo Answers Your FAQs on Buying and Managing an Investment Property
How much is my property worth?
Real Estate Japan is pleased to offer free, no obligation appraisals for owners of property in Japan. Please click here and fill out the form: How much is my property worth?
7 situations when you should consider selling your investment property in Japan
What are the main factors affecting home sale prices in Japan in 2019?
Akiya Banks in Japan
- Akiya banks in Japan: Links to vacant house databases by prefecture
- How much does it cost to renovate an akiya in Japan
- What you should know before buying a vacant home in Japan
- What to do with Tokyo’s hundreds of thousands of vacant homes
- Government plans to turn Japan’s abandoned houses into semi-quasi public housing
- Akiya Bank Japan vacant house database to now include government public assets
- 7 trends & events that will shape Japan and the Japanese real estate market in 2019