Sales of newly built condominium units sold in the seven prefectures of Kyushu increased 31% year-on-year in 2021 to 7,759 units.

This was the first time in eight years since (since 2013) that the number of units sold has exceeded 7,000. The strong annual growth rate is partially attributed to a rebound from the significant drop in sales due to the start of the pandemic in 2020. However, strong buyer interest and changes in consumer preferences due to more people working from home also boosted sales.

According to the Housing Distribution Shinposha, based in Fukuoka, buyers are drawn to properties conveniently located near commercial facilities and those close to nature. There has also been an increase in the number of buyers who have moved from outside Kyushu to purchase property in the region.

Kyushu is the most southernly of Japan’s four main islands and is comprised of seven prefectures: Fukuoka, Kumamoto, Nagasaki, Oita, Saga, Kagoshima, Miyazaki, and Okinawa.

Year-on-year sales increased in every prefecture, except for Nagasaki and Kagoshima. Sales were up 35% to 4,944 units in Fukuoka, up 62% in Saga to 256 units, and up 2.3 times to 265 units.

In 2021, the average sales price of a newly built condominium sold in the eight major cities of Kyushu was ¥39,340,000 ($342,000 USD), up 9% year-on-year, but a relative bargain compared to the average sales price of a newly constructed apartment in the Tokyo metro region.

In contrast, the average unit price of a newly constructed condominium sold in the greater Tokyo region hit a record high of ¥62,600,000 ($550,000 USD) in 2021, up 2.9% year-on-year. This number outstripped the previous high reached in 1990 during the asset bubble era.

The contract rate was 82%, up 6 points from 2020 and the highest contract rate in the last 10 years. The contract rate is the number of units contracted for sale divided by the number of units offered for sale. A contract rate above 70% is said to indicate strong buyer interest relative to supply.

Developers released 7,585 units for sale in Kyushu in 2021, a year-on-year increase of 45%. However, inventory at the end of 2021 was down 9% compared to the same point in 2020, which highlights that sales were strong relative to the available supply. Apparently, buyers who had held back in 2020 because of the pandemic and newer buyers, interested in improving their living environment as working-from-home spread in 2021 both contributed to the solid sales numbers.

For example, properties on the artificial island “Island City”in Fukuoka City have drawn a lot of buyer interest. Island City is a man-made island in Hakata Bay that is known for its huge landscaped garden and beautiful ocean views. It also has abundant commercial facilities, elementary and junior high schools and is the location of the Teriha Sekisui House Arena (the home area of the Rising Zephyr Fukuoka of the B League basketball team). A commute to city-center business districts like Hakata and Tenjin requires a bus ride or car, but the payoff is a very livable home environment, and for people working from home, commuting is not a factor.

The Island City Ocean and Forest Tower Residence located in Island City sold 61 of 108 units in the west tower released for sale in the first two months they were available, starting in December 2019, with an average sales price over 50 million yen.

Another example is area near the Mitsui Shopping Park Lalaport Fukuoka, which will open in April 2022. This development is located on the former site of the fruit and vegetable market in Fukuoka City and is also drawing a lot of buyer interest. The Actus Hakata Grand Mirai condominium development, which is located about a 13-minute walk from Mitsui Shopping Park has completely sold out all 188 units released for sale.

Another pandemic-related factor is that people who work for companies in the information technology and other industries where working-from-home is allowed can work from anywhere, and more and more of these people are moving away from Tokyo to regional cities like Fukuoka, where they real estate is much less expensive.

At the same time, high-priced properties in city-center locations and equipped with high-end amenities continue to be popular with buyers.

For example, when the Grand Maison Josui Garden City” fifth tower (with a total of 104 units) released 58 units for sale in October 2021, all 58 units sold out in the same month despite the fact that the highest priced units were in the 350 million yen (3 million USD) range.

Due to the factors mentioned above, the Housing Distribution Shinposha forecasts that the housing market will remain strong this year in the Kyushu region regardless of the how the coronavirus situation unfolds.

Source: Nikkei newspaper, February 24, 2022 (in Japanese)

Lead image: Fukuoka evening via iStock 479762938

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