Sales of pre-owned condominiums and single-family homes in greater Tokyo hit a record high in January, with unit sales numbers increasing 29.0% and 37.0% year-on-year, respectively.
These were the highest monthly jumps recorded since the Real Estate Network for East Japan (REINS East Japan) started reporting data in May 1990.
Average sales prices for both pre-owned apartments and single-family homes also increased in January.
Last month, the average sales price of an apartment in greater Tokyo, which consists of the Tokyo 23 Wards, western suburban cities, and the prefectures of Chiba, Saitama, and Kanagawa, was ¥37,720,000 ($359,000 USD), a year-on-year increase of 2.7%. The average sales price per meter was ¥575,700 per sqm ($5,467 USD per sqm, or $508 USD per sqft). The average size of an apartment sold was 65.52 square meters and the average property age was 22.05 years (built in 1999).
The single-family home market saw higher sales price growth than the condominium sector. In January, the average price of a pre-owned home sold in greater Tokyo was ¥32,690,000 ($311,000 USD), a year-on-year increase of 4.8%. The average lot size was 147.53-sqm (+5.4% YoY) and the average floor area was 104.14-sqm (+1.6% YoY). The average property age was 22.40 years (built in 1999).
January was the 7th consecutive month (starting in July 2020), in which the number of contracted sales of single-family homes rose year-on-year. This followed four months (March to June 2020) of precipitous declines in year-on-year monthly sales.
March 2020 was an eventful month in Japan, as the country started to deal with the effects of the novel coronavirus and uncertainty on many fronts, as the Tokyo 2020 Olympic games were postponed for a year. On April 8th, 2020 a state-of-emergency was declared for Tokyo, Chiba, Kanagawa, Saitama, Osaka, Hyogo and Fukuoka prefectures to help slow the spread of the coronavirus. Japan also started shutting down the border to foreigners starting in April 2020.
Supply is tight and on a downward trend
One of the key takeaways from the January Market Watch report is that the supply of both pre-owned apartments and single-family homes in greater Tokyo is tight. The other is that overall inventory has constricted in the last year, as fewer and fewer units are being offered for sale.
The scant supply situation in the pre-owned market occurred amidst a historic drop in the supply of new condominiums being brought online in 2020.
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.
Compared to the new condominium market
However, supply of newly built condominiums is expected to make a strong recovery this year, with the Real Estate Economic Institute (REEI) forecasting 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.
Pre-Owned Apartment Segment
In January, the number of new registrations of pre-owned apartments offered for sale in greater Tokyo fell 22.3% year-on-year to 13,480 units. This is the lowest monthly number of properties registered by agents for sale in the last 13 months, except for December 2020, when the number was 12,125.
The reluctance of owners to put units up for sale has pulled down the overall inventory of pre-owned apartments in the last year. In January, total inventory of pre-owned apartments fell 22.2% year-on-year to 37,054 units.
Single-Family Home Segment
From a buyer’s perspective, the supply situation is even worse in the single-family home segment, as the number of pre-owned homes put up for sale in January fell 27.8% year-on-year to 4,585 units.
Total inventory of pre-owned single-family homes in greater Tokyo plummeted in January by 24.2% year-on-year to 17,253 units.
Average sales prices by city and prefecture: Apartments
As can be expected, average sales prices varied widely by region, with the Tokyo 23 Wards skewing the overall average higher.
Here is the breakdown by area:
|Region||Jan 2021 Average Sales Price JPY||v. Jan 2021 % Change||v. Dec 2021 % Change|
|Tokyo 23 Wards||84,530,000||3.8%||-0.6%|
|Tokyo Western Suburbs||43,690,000||-2.4%||0.5%|
|Yokohama and Kawasaki||51,280,000||5.3%||0.1%|
Average sales prices by city and prefecture: Single-Family Homes
|Region||Jan 2021 Average Sales Price JPY||v. Jan 2020 % Change||v. Dec 2020 % Change|
|Tokyo 23 Wards||54,820,000||-1.0%||-20.0%|
|Tokyo Western Suburbs||34,460,000||11.7%||9.8%|
|Yokohama and Kawasaki||39,240,000||1.8%||-3.0%|
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Source: REINS, January 2021 Market Watch (in Japanese)
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