Sales of pre-owned condominiums and single-family homes in greater Tokyo had a banner month in November, chalking up the highest unit sales numbers recorded since the Real Estate Information Network for East Japan (REINS East Japan) started tracking the market in May 1990.
Contracts for pre-owned condominiums in the greater Tokyo metropolitan region shot up 14.0% year-on-year to 3,620 units. Similarly, contracts for pre-owned detached houses set a record last month, jumping 23.6% year-on-year. These are the key takeaways from the REINS’s November market watch report on the greater Tokyo pre-owned home market.
As discussed in this article (Supply of new apartments in greater Tokyo shoots up 35.6% in October), 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.
In October, developers in the greater Tokyo area released 3,358 newly constructed apartment units for sale, an increase of 67.3% year-on-year and 35.6% compared to September. However, as November supply numbers have yet to be released, it remains to be seen whether we are seeing a trend reversal with respect to new apartment supply.
In the meantime, 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.
Pre-owned condominium market
Here is a snapshot of the November pre-owned apartment market in greater Tokyo.
- Average sales price per square meter: ¥568,700 ($5,467) per sqm (+3.4% YoY)
- Average sales price: ¥37,560,000 ($362,000 USD) (+5.9% YoY)
- Average exclusive-use floor area: 66.04-sqm (+2.4%)
- Average age (based on year of construction): 22.15 years (no change YoY)
The contracted sales price per sqm has risen for seven consecutive months and the contracted average sales price has increased year-on-year for six consecutive months.
Pre-owned single-family home market
This is a snapshot of the November pre-owned single-family home market in greater Tokyo.
- Average sales price: ¥33,390,000 ($321,000 USD) (+4.9% YoY)
- Average land area: 148.07-sqm (+3.1% YoY)
- Average building area: 106.12-sqm (+1.7% YoY)
- Average age (based on year of construction): 21.25 years (v. November 2019: 22.08 years)
As mentioned above, the number of single-family homes contracted for sale in November was a year-on-year increase of 23.6%. Also significant is that November was the fifth consecutive month of year-on-year growth in contracted sales units.
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Source: Real Estate Information Network East Japan, November market watch report (in Japanese)
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