How much does a new condominium cost in Tokyo? The 2018 Average Sales Price Numbers Are In

The average sales price of a new condominium in the Tokyo 23 Wards rose last year to ¥71,420,000 ($649,273), a year-on-year increase of 0.7%. This is according to data recently released by the Real Estate Economic Institute (REEI), a Tokyo-based think tank.

Below we highlight the key takeaways from the report.

How much does a new condominium cost in Tokyo?

• The average sales price for a new condominium sold in the 23 Wards of Tokyo in 2018 cost ¥71,420,000 ($649,273).
• This is a YoY increase of 0.7%

What is the average price-per-sqm of a new condominium sold in Tokyo?

• In 2018, the average price per-sqm of a new condominium sold in the 23 Wards of Tokyo was ¥1,113,800.
• This is equivalent to about $941 per-square-foot.

What is the price trend for the Tokyo 23 Ward new condominium market?

• In 2014, the average sales price for a condominium sold in the 23 Wards of Tokyo was ¥59,940,000.
• The average price-per-sqm in 2014 was ¥873,000
• Sales prices for newly constructed condos in the Tokyo 23 Wards have increased every year since then.
• Compared to 2014, the average sales price in 2018 represents an increase of 19.15%.
• Compared to 2014, the average sales price-per-sqm in 2018 represents an increase of 27.6%.

How does this compare to prices in other cities around the world?

It’s not always possible to compare apples to apples, and at the risk of being accused of comparing apples to oranges, here is some anecdotal data:

• According to the Hong Kong Ratings and Valuation Department, during the year to January 2018, for 40-69.9-sqm  apartments sold in the city, prices rose by 14.48% to HK$170,853 (US$21,781) per-sqm.
• According to Zillow, the median list price per-squar- foot in San Francisco is $1,035. The median price of homes currently listed in San Francisco is $1,259,000 while the median price of homes that sold is $1,356,500.
• According to CityRealty, in the four weeks leading up to May 1, 2018, the average sales price for all units sold in Manhattan, including co-ops and condos, was $2.3 million, up from $2.1 million the prior month.

What are prices like outside central Tokyo? Here is the breakdown by region

Here is the breakdown by Greater Tokyo Area region by average sales price. The number in parenthesis shows the YoY change in percentage.

• Tokyo western suburbs: ¥52,350,000 (3.6%)
  • The Tokyo western suburbs includes such cities as Machida, Hachioji, Chofu, and Fussa
• Kanagawa prefecture: ¥54,570,000 (-1.2%)
  • Kanagawa includes cities such as: Yokohama, Kawasaki, and Sagamihara
• Saitama prefecture: ¥43,050,000 (-1.4%)
• Chiba prefecture: ¥43,060,000 (5.1%)
• Great Tokyo Region average: ¥58,710,000 (-0.6%)

Why am I reading news stories saying that new condominium prices dropped in Tokyo in 2018?

Yes, average sales prices for new condominiums in the Greater Tokyo Region fell 0.6% in 2018, as we saw above.

But as we also saw above, the Greater Tokyo Region is a big area. Sales prices in Central Tokyo (the 23 Wards) increased last year, as they did in the western suburbs and Chiba. Prices fell in Kanagawa and Saitama prefectures, which dragged the overall average down.

What was the average contract rate in 2018? And why is this number important?

The average contract rate in the first month of sales for newly released condominium units in the Greater Tokyo Region was 62.1%, this represents a YoY decrease of 6% points, and three consecutive years where the rate was in the 60-th percentile.

However, the cumulative contract rate (measured over the year) was 77.5%, a drop from 83.2% in 2017.

The contract rate is the number of sales contracts divided by the number of units released for sale for the period. A contract rate of 70% is considered a healthy buyers market.

Because the contract rate measured in the initial month of sales dropped YoY (to 62.1%), some market observers read this as declining buyer interest.

However, one thing to note is that the REEI does not break down the contract rate data for the different cities in the Greater Tokyo Region, but reports the number for the region as a whole.

How many new condominium units were released for sale in the Greater Tokyo Region in 2018?

In 2018, in the Greater Tokyo Region, 37,132 newly constructed condo units were released, a year-on-year increase of 3.4%.

• Forty-three per cent (43%) of these were released for sale in the Tokyo 23 Wards, a YoY decrease of 0.4%.
• The share released in Kanagawa was 22.1% (-3.8% YoY)
• The share released in Saitama was 11.6% (+8.5% YoY)
• The share released in Chiba was 13.5% (+48.4%)

What was the most expensive apartment sold in Tokyo in 2018?

The most expensive unit sold last year was an apartment in the 23-story THE COURT Jingu Gaien (THE COURT 神宮外苑) building, located just across from Meiji Jingu Gaien park and stadium, in Shibuya Ward, developed by Mitsui Fudosan Residential.

This building has a total of 409 units. The unit that claimed pole position was a 314.20-sqm apartment that sold for ¥4,870,000 per-sqm, for a final sales price of ¥1.53 billion (approximately 14 million USD).