Supply of New Apartments For Sale in Osaka Area at 27 Year Low

Condominium developers in the greater Osaka region slammed on the breaks in January, as the number of new apartments offered for sale slipped to a 27-year low. There were 621 newly-constructed units released for sale last month, the fewest since August 1993. This is the key takeaway from the Real Estate Economic Institute’s (REEI) January report on the condominium market in the Kinki region. Kinki consists of the prefectures of Nara, Wakayama, Kyoto, Osaka, Hyogo and Shiga.

January supply represented a 40.5% year-on-year drop and an 80.8% drop compared to December.

Supply and Demand Factors

The supply situation in the Osaka region mirrors the market conditions in greater Tokyo. As we discussed in this article (Price of a new apartment in Tokyo 23 Wards tops 100 million yen for first time in 27 years), developers are extremely cautious of depressing sales prices by releasing too many units for sale.

Especially in the Kansai region, which has seen high growth in the number of tourists from Asia (prior to the outbreak of the COVID-19 virus), builders are in tight competition with hotel developers for labor, materials, and land. This has forced them to push up listing prices. At the same time, more and more people are being enticed to buy their own homes, as interest rates in Japan are at a historic low due to the BOJ’s monetary easing. The government is also offering numerous tax incentives and subsidies to help offset the effect of the increase in the consumption tax in October 2019.

Average Sales Price in Kansai Region

Tight supply and government-incentivized demand have supported a steady increase in prices. In January, the average price of a new apartment sold in the Kansai region (also known as the Kinki region) was about ¥54,000,000 (about $489,000), a year-on-year increase of 14.4%. This represented three consecutive months of increases, although the average price per-sqm was down 1.4%.

Contract Rate

However, the contract rate in the Kansai region did slip to 66.8% in January (down from 70.2% last year and 71.0% in December). The contract rate is the number of units contracted for sale divided by the number of units offered for sale. A contract rate of at least 70% is considered a healthy buyers market.

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

The number in parentheses is the price per sqm.

  • Osaka City: ¥43,530,000 (¥701,000 per-sqm)
  • Osaka Prefecture, excluding Osaka City: ¥44,790,000 (¥618,000 per-sqm)
  • Kobe City: ¥42,370,000 (¥540,000 per-sqm)
  • Hyogo Prefecture, excluding Kobe City: ¥48,030,000 (¥656,000 per-sqm)
  • Kyoto City: ¥42,850,000 (¥717,000 per-sqm)
  • Nara Prefecture: ¥37,480,000 (¥461,000 per-sqm)
  • Shiga Prefecture: ¥38,220,000 (¥519,000 per-sqm)
  • Wakayama Prefecture: ¥32,840,000 (¥459,000 per-sqm)

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“.

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: Earthquake building codes and technology 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?

Seminars on Buying Property in Japan

Please see our seminar page for a current list of seminars on: how to buy a home in Japaninvesting in Japanese real estate for beginnershow to apply for permanent residency in Japanhow to sell property in Japan, and much more.

Lead photo: iStock, Osaka skyline and Abeno Ward