Here are the key highlights for the Kansai region new condominium market for 2021.
The data comes from the Real Estate Economic Research Institute’s (REERI’s) 2021 Kansai new condominium market report, which covers the prefectures of Osaka, Hyogo, Kyoto, Nara, Shiga, and Wakayama.
For the Kansai region as a whole these are the key takeaways:
Supply of newly constructed condominiums released for sale in the region increased 24.7% year-on-year to 18,951 units. This means that supply slightly surpassed the number (18,042) released in 2019, prior to the start of the pandemic.
Highest ever average sales price per square meter
The average sales price of ¥45,620,000 ($397,000 USD) was up 9.1% year-on-year. This was the highest average annual sales price recorded since 1991 when the average sales price hit ¥55,520,000 in Kansai.
The average sales price per square meter also set a record. The average sales price per sqm in 2021 was ¥751,000 ($6,526 USD) per sqm. This was the highest recorded since the REERI started its market surveys.
The REERI estimates that about 18,500 newly constructed condominium units will be released for sale in 2022 but that upward price pressure will negatively impact the balance of supply and demand.
Only a very slight sellers’ market
In 2021, the contract rate for the Kansai region as a whole was 69.8%, down 1.9 points from 2020, and the first time since 2012 that it has dropped below seventy percent.
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.
In contrast, in 2021, the contract rate for the Tokyo metropolitan region was 73.3%.
With respect to building trends, developers are starting to release energy-saving ZEH-M (Zero Energy House – Manshon) type developments to the market. This is expected to increase, as the Japanese government is incentivizing energy-saving buildings.
More buildings are also featured co-working spaces so that residents can telecommute, no-touch elevators, and floor plans that allow for more distancing and working-from-home, as people are shifting to living with the pandemic.
What are the factors driving prices higher?
For a detailed discussion of what is causing such strong price appreciation in the new condominium market, please see this article: Average apartment prices high record high in 2021, exceeding bubble era high
Average price and price per square meter by prefecture & city
The chart below shows the average sales price and average sales price per square meter by prefecture and major city in Kansai.
Supply by prefecture & city
The chart below shows supply by prefecture and major city in Kansai for 2021.
Contract rate by prefecture & city
The chart below shows the contract rate by prefecture and major city in Kansai for 2021.
Source: Real Estate Economic Research Institute, Kansai region new condominium market trends for 2021 (PDF in Japanese)
Lead photo: High angle view over the tracks and platforms of Osaka Station surrounded by the skyscrapers of Umeda in the busy heart of Japan’s second city, via iStock 514519868
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