Tokyo Apartment Market Forecast: Trends to watch for in 2021

The Real Estate Economic Institute (REEI) has released its 2021 forecast for supply and price trends for the new condominium market for the greater Tokyo area, which includes Tokyo and the prefectures of Kanagawa, Chiba, and Saitama.

Below are the key takeaways from the forecast.

Supply in Greater Tokyo is forecast to jump 31%

The REEI forecasts that developers will come back in force in 2021, with about 32,000 newly constructed apartments estimated to be released for sale in greater Tokyo. This would be a year-on-year increase of 31.1% and bring new supply levels above those of 2019. Supply is forecast to increase in all areas of greater Tokyo.

Supply of new condominiums for 2020, as a whole, in greater Tokyo is estimated to come in at about 24,400 units, or a decrease of 21.9% compared to 2019. The sharp decrease was due to the government’s emergency declaration and the slowdown in business as many developers chose to close model showrooms.

How has the pandemic affected developers plans for 2021?

Responding to the shift to working-from-home, many developers are aggressively expanding supply in the suburbs.

Large-scale “Tower Mansion” projects will continue to take the lead

The REEI reports that large-scale high-rise tower condominium projects will continue be a conspicuous feature of the market in greater Tokyo. Developers are focusing on central Tokyo and the Tokyo Bay area for these developments but are also moving into suburban areas around Tokyo.

Supply by Area

Supply of new apartments in the Tokyo 23 Wards is forecast to increase by about 30.8% year-on-year to 14,000 units. Large-scale developments are expected in the Tokyo Bay area as well as Chuo ward (in the city center) and the eastern wards of Taito, Sumida, Koto, Katsushika, and Edogawa.

  • Saitama: 4,000 newly constructed apartments are forecast (+48.1% YoY)
  • Tokyo western suburbs: 3,000 units (+25.0% YoY)
  • Kanagawa: 7,000 units (+34.6% YoY)
  • Chiba: 4,000 units (+17.6% YoY)

Inventory is forecast to remain steady at about 6,000 units

The REEI reports that housing starts dropped by 8.0% in the period from January to October 2020, coming in at 47,503 units.

As of the end of November 2020, inventory stood at 6,841 units, a decrease of 9.1% compared to November 2019. In November, inventory in Tokyo dropped by double digits while increasing in the Saitama and Chiba prefectures.

Average sales prices in 2020

From January to November 2020, the average sales price for a newly constructed apartment in greater Tokyo was ¥62,540,000 ($606,000). This was the second time since 1990 that the average sales price was above the ¥60,000,000 mark.

Here is the breakdown by area for January to November 2020:

  • Tokyo 23 Wards: ¥77,750,000 (+6.7% YoY)
  • Tokyo western suburbs: ¥54,250,000 (-1.1%)
  • Kanagawa: ¥54,980,000 (+3.8%)
  • Saitama: ¥45,670,000 (+1.2%)
  • Chiba: ¥45,550,000 (+1.2%)

Average sales prices by square meter in 2020

  • Greater Tokyo as a whole: ¥959,000 (+9.1% YoY)
  • Tokyo 23 Wards: ¥1,278,000 (+13.8%)
  • Tokyo western suburbs: ¥800,000 (+0.9%)
  • Kanagawa: ¥823,000 (+8.6%)
  • Saitama: ¥665,000 (+3.9%)
  • Chiba: ¥634,000 (+4.8%)

Trends to watch for in 2021

  • Even in an eventual “post-corona” environment and even as there is a discernible pull towards the suburbs for some buyers, the REEI forecasts that many people looking to purchase homes will continue to be attracted to city-center stations and high-rise buildings.
  • The popularity of compact apartments (with about 40 to 50-sqm of living space) will increase, spurred on by the government’s modification and extension of the mortgage deduction rules for home loans.
  • The popularity of luxury properties in central Tokyo is forecast to remain stable, with prices remaining at a high level.
  • There are also very few signs of price declines in the suburbs or for properties located near major stations.
  • In product development, developers have pivoted to planning for a post-corona world where there is a growing need to work from home, whether this is done in building common areas or in the owner’s own apartment.
  • The number of developers in the greater Tokyo area increased slightly in the period from January to November 2020 to 114 companies (an increase of 4 companies compared to the same period in 2019).

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

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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.


Source: Real Estate Economic Institute press release, December 21, 2020 (in Japanese)

Lead: Japan National Stadium (国立競技場), Photo by 5Second10 on Instagram, used with permission of the photographer


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