I was talking with a friend who works for a residential property management company here in Tokyo recently. I mentioned that I was thinking about moving, but that I was thinking of waiting until the fall because I don’t want to move in the heat of summer.
He suggested that I look for a new place in the next few months because the summer is considered the rental low season. With the fiscal and school year starting in April, many people looking for an apartment have already settled in by the end of April. With low demand over the summer months, some landlords supposedly give small discounts on the rent or waive key money just to have their property “leased up.”
I wasn’t sure if he wasn’t a little biased, given that he works in the industry (!), so I thought I’d see if there is any evidence to support the idea that rent is lower over the summer.
In general, the data seems to suggest that average rent does tend to be slightly lower (2-3% versus the peak month) over the summer months, but as with investment advice, “past performance is no guarantee of future performance,” so be aware that this is general trend data!
This article is based on historical average rent per-square-meter, as reported by Tokyo Kantei, for condominiums of at least 30 square meters from 2011 to 2014.
First, let’s take a look at the Tokyo metropolitan region. In 2014, if you locked in your rent in April, you would have paid about 2,637yen per square meter; this was the month with the highest average rent for the year. For a 30 square meter condo, your monthly rent would have been 79,110yen. In July, the annual low, average rents dropped about 3.0% compared to April, to 2,558yen per square meter, or about 76,740yen for a 30 square meter apartment. This translates to an annual “savings” of 28,440yen.
The annual data also suggests that rents in the Tokyo metropolitan region do dip or stay flat over the summer months, and start rising again in the fall.
Please click on the chart for detailed data for the Tokyo metro region.
Tokyo 23 Wards
In the 23 Wards of Tokyo, in the last few years, there has been less of a decrease in the summer months. In fact, in 2013, rents increased in June compared to April, but the percentage change was small (0.65%). In 2014, however, there was a 2% increase in average rent-per-meter in October versus August.
Please click on the chart for detailed data on the 23 Wards.
Compared to Tokyo, average rent per-square-meter in Yokohama showed more seasonal volatility. For 2011 to 2014, from the peak month (April) to the trough (July), average rent per-square-meter dropped between 1.6% to 3.3%, and the summer months had the lowest averages for the year.
Please click on the chart for detailed data for Yokohama.
In 2011 and 2012, average rent per-square-meter in Osaka was very flat throughout the year. Average rent per-square-meter finally started to recover in December 2012.
In 2014, there was in fact a drop of 1.4% in average rent between April and July (the trough) of about 1.8%.
Please click on the chart for detailed data for Osaka.
Saitama and Chiba
Sataima and Chiba cities showed very different seasonal patterns in 2014. In Saitama, the average rent per-square-meter actually increased slightly (0.39%) in July versus March, which does not fit the trend in the other cities we looked at. In Chiba, average rent per-square-meter peaked in April and continued to drop throughout the summer months, until September.
Please click on the charts for detailed data for Saitama and Chiba.
Source: Tokyo Kantei Press Release 分譲マンション賃料 (May 14, 2015)
Photo credit: Saku Takakusaki