Sales of Pre-Owned Apartments and Houses in Greater Tokyo Hit Record High in 2021

Sales of pre-owned condominiums and single-family homes in greater Tokyo had a blockbuster start to 2021, recording the highest number of sold units ever recorded for the January to March period, since the Real Estate Information Network for East Japan (REINS East Japan) started tracking the market in May 1990.

REINS data indicated that there were 11,295 pre-owned apartment sales contracts signed in the Tokyo metropolitan area for the first quarter of 2021, a year-on-year increase of 12.2%. This was the third consecutive quarter (starting in July 2020) in which unit sales grew year-on-year.

Throughout 2020, developers nationwide have been extremely cautious about releasing new supply to the market in the midst of the pandemic. This has exacerbated a longer term downward supply trend driven by high labor and material costs and competition with hotel developers for city-center land.

At the same time, extremely tight new apartment supply has been a factor in driving sales of pre-owned apartments and homes, as some buyers are forced to look in this segment of the market where there is greater supply and lower price points.

Sales Prices also up year-on-year

Average contracted sales prices for January to March were also up year-on-year to ¥37,970,000 ($353,000), an increase of 6.4%. This was the 34th consecutive quarter (starting in the October to December 2012 period) in which the average sales price increase year-on-year.

Sales prices per square meter also surpassed last year’s results for the third consecutive quarter, notching a 5.9% increase to ¥581,400 ($5,400USD) per square meter.

The contracted m2 unit price increased 5.9% to 581,400 yen / m2, surpassing the previous year’s results for the third consecutive term. The contract price increased by 6.4% to 37.97 million yen, surpassing the previous year’s results for 34 consecutive terms from the October-December period of 2012.

Sales of pre-owned single-family homes surge

Sales of pre-owned single-family homes in the greater Tokyo metropolitan area surged in the first three months of 2021 by 27.8% to 4,207 units. This was the highest number of contracted sales in the single-family market since REINS started keeping records in May 1990 and the third consecutive quarter in which sales contracts were up year-on-year.

Similarly, average sales prices of freestanding houses were up, albeit not by a double digit increase, reaching 7.9% year-on-year growth to hit ¥33,850,000 ($314,000USD) and three consecutive quarters of year-on-year increases. The average lot size was also up year-on-year by 5.4% to 147.4-sqm and the average floor space of sold homes was also up 1.1% to 104.88-square meters.

These sales numbers seem to confirm the trend shift we are seeing as more and more people are working-from-home and as more companies are moving to a permanent remote work environment amidst the ongoing COVID pandemic.

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Source: Real Estate Information Network East Japan, January to March 2021 market watch report (in Japanese)

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