Sales prices for new apartments in Tokyo cool, falling YoY for 2 consecutive months

The average sales price of a newly constructed apartment in greater Tokyo fell year-on-year in June for the second consecutive month, coming in at ¥62,110,000 ($567,000 USD), down 2.8% year-on-year.

The percentage drop in the May and June average sales numbers were a reversal from April when average sales prices in greater Tokyo jumped 24.9% year-on-year.

Last month’s sales numbers were released by the Real Estate Economic Institute’s (REEI) in its Greater Tokyo New Condominium market report for June. Greater Tokyo consists of the Tokyo 23 Wards, Tokyo western suburban cities, and the prefectures of Chiba, Saitama, and Kanagawa.

In the aftermath of the first COVID state-of-emergency, developers started pulling back on new supply starting in April and May last year. In the year since then, tight supply, along with ongoing historically low mortgage rates, have continued to push prices up. Steady upward growth in average sales prices has been a conspicuous feature of the greater Tokyo new condo market. That is, until this May.

The drop in average sales prices in June occurred amidst an increase in supply. In June, developers released 1,939 new apartments for sale in the greater Tokyo area. This was a 25.7% year-on-year increase, but a drop of 24.8% compared to the number released in May (2,578 units).

New June supply, however, was not enough to cover the long-term supply shortage, with overall inventory standing at 6,395 units in the greater Tokyo area (394 units fewer than in May). The June inventory number was also about 1,000 units lower than the June 2020 inventory number, of 7,387 units. Basically, supply has not recovered to what was available to buyers on the market this time last year.

So the YoY drop in average sales prices in the last few months has been occurring amidst a situation of under supply. Buyers are possibly facing a situation where new properties released to the market are not necessarily meeting their specific requirements. Buyer interest remains high, but this does not automatically translate to higher sales prices, even in the current low inventory situation.

Here are the other key takeaways from the June data:

  • The biggest YoY price drop occurred in the Tokyo western suburbs. The average sales price in Tokyo’s western cities was ¥46,030,000 ($421,000 USD), a year-on-year decrease of 13.6%.
  • Average sales prices were highest in the Tokyo 23 Wards, coming in at ¥77,010,000 ($704,000), a year-on-year decrease of 3.3%, but up 11.1% compared to May
  • The first month’s contract rate for greater Tokyo was 72.5% (down 0.7 points year-on-year but up 3.2 points compared to May). 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.

Average Sales Price of an Apartment in Greater Tokyo – By City & Prefecture

Here is the breakdown of average sales prices by area for June 2021 compared to May 2021 and year-on-year.

June 2021 –
Average Sales Price in JPY
May 2021 –
Average Sales Price in JPY
June 2021 v. May 2021
MoM % Change
June 2020 –
Average Sales Price in JPY
June 2021 v. June 2020
YoY % Change
Tokyo 23 Wards 77,010,000 69,340,000 11.1% 79,620,000 -3.3%
Tokyo Western Suburbs 46,030,000 52,780,000 -12.8% 53,300,000 -13.6%
Kanagawa 53,320,000 53,850,000 -1.0% 53,120,000 0.4%
Saitama 53,790,000 46,820,000 14.9% 44,500,000 20.9%
Chiba 45,510,000 43,990,000 3.5% 48,120,000 -5.4%
Greater Tokyo 62,110,000 59,080,000 5.1% 63,890,000 -2.8%

Average sales prices by square meter

June 2021 – Average Sales Price
Per SQM in JPY
May 2021 – Average Sales Price
Per SQM in JPY
June 2021 v. May 2021
MoM % Change
June 2020 – Average Sales Price
Per SQM in JPY
June 2021 v. June 2020
YoY % Change
Tokyo 23 Wards 1,198,000 1,213,000 -20.1% 1,282,000 -6.6%
Tokyo Western Suburbs 699,000 813,000 47.4% 868,000 -19.5%
Kanagawa 774,000 795,000 -12.1% 817,000 -5.3%
Saitama 816,000 675,000 20.9% 701,000 16.4%
Chiba 684,000 601,000 13.8% 644,000 6.2%
Greater Tokyo 969,000 932,000 4.0% 942,000 2.9%

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  • Real Estate Economic Institute, Greater Tokyo New Condominium Market Report for June 2021 (PDF in Japanese)
  • Real Estate Economic Institute, Greater Tokyo New Condominium Market Report for June 2020 (PDF in Japanese)
  • Real Estate Economic Institute, Greater Tokyo New Condominium Market Report for May 2021 (PDF in Japanese)

Lead photo: iStock 1059499522