When you think about the cost of buying a house or condo in Tokyo, you might be influenced by a memory of the asset bubble of the late eighties, when prices in Tokyo’s most exclusive neighborhoods rose to levels that made them 350 times more expensive than comparable land in Manhattan.
Of course, Japan has experienced decades of recessionary prices since then. This article will look at the average price and trends for the following types of properties and land in greater Tokyo: second-hand condos, second-hand houses, newly constructed houses, newly constructed condos, and land.
The data in this article is based on completed sales contracts as reported by REINS Eastern Japan’s Market Trends report (2014), and Tokyo Kantei’s Mansion White Paper (2014).
Average price of second-hand condos on the rise
In 2014, the average price of a second-hand condo in Greater Tokyo was 27,890,000yen (about 232,914USD at today’s exchange rate), and the average price per square meter was 434,100yen (3,636USD) per square meter. The average floor area of a second-hand condo was 64.25 square meters.
This is the highest price point reported by REINS in the last ten years. Of note is that the average price of a second-hand condo in Tokyo did not drop significantly in the years following the 2008 global financial crisis (as opposed to the other categories we will look at below), and the 2014 average price represents a 36.3% increase compared to the average price in 2004.
Click on the graph below for more detail on second-hand condo prices.
Average price of second-hand houses ticked up slightly in 2014
In 2014, the average price of a second-hand house in Greater Tokyo was 29,580,000yen (about 247,120USD). The average land area purchased was 148.73 square meters, and the average building area was 105.81 square meters.
In 2008, the average price of a second-hand house was 31,080,000yen, a decrease of 5.96% compared to the previous year, which was the peak year between 2004 and 2014. The average price continued to fall annually until last year, which represented a 1.9% year-on-year increase. The 2014 average price is 10.5% less than the 2007 peak achieved in the last decade.
Click on the graph below for more detail on second-hand house prices.
Average price of newly-constructed condos on the rise
As reported by Tokyo Kantei, in 2014, the average price of a newly constructed condo in the greater Tokyo area was 46,530,000yen (388,820USD), an annual increase of 1.57%. The average floor area of a unit was 63.16 square meters.
In contrast to the average price of a used-condo, which fell about 5.96% from 2007 to 2008, the average price of newly-constructed condos only decreased about 0.6% in the same period. The average price continued to drop until 2012. This trend reversed in 2013, when it increased to 45,810,000yen, up 8.0% year-on-year.
Click on the graph below for more detail on newly-constructed condo prices.
Average price of newly constructed houses down in 2014 vs. 2013
The average price of a newly constructed house in 2014 was 34,150,000yen (about 285,480USD), an annual decrease of about 1.0%. The average land area purchased was 117.51 square meters, and the average building area was 97.85 square meters.
Of the five broad categories we look at in this article, the average price of newly constructed houses has decreased the most over the last ten years. The average price of a newly constructed house in 2008 was 38,180,000yen. At the peak in 2007, it was 40,230,000. The 2014 average price represents a difference of about 15.1%.
Click on the graph below for more detail on newly-constructed house prices.
Average land prices down in 2014 vs. 2013
In 2014, the average price of a parcel of land (between 100 to 200 square meters) in greater Tokyo was about 27,690,000yen (about 231,430USD), a decrease of about 2.0% compared to 2013. Average land prices in greater Tokyo have remained relatively flat since 2011. At the ten-year (2004 to 2014) peak in 2007, the average price was 33,720,000yen.
Click on the graph below for more detail on average land prices.
Photo credit: electricnude