Continuing price rises for used condominiums

Used condominiums in the Tokyo area have experienced a further rise in prices. As of August, prices had risen over the past 12 consecutive months and for the first time in five years, prices rose by over 10 percent compared to the same month last year. Rising prices in Tokyo are driving the price rise overall. In the Kinki region, rising prices in the central area are also striking. A strong demand exists for properties for investment purposes or as a measure for dealing with the inheritance tax. In contrast, price movements in the commuter-town suburbs are slow, and the price bipolarization in the metropolitan area is distinct.

 

Photo: Copyright Housing Japan; Akasaka 8 Chome House Currently For Sale.

 

According to the real estate Tokyo research firm Tokyo Kantei (based in Shinagawa, Tokyo), the average price for used condominiums in the Tokyo area (Tokyo, Kanagawa Prefecture, Chiba Prefecture, Saitama Prefecture) in August was 31.15 million JPY. This represents a 1.5% increase over July prices and a 10.7% increase over prices in August one year ago. An increase of over 10% in prices as compared to the same month in the previous year was last experienced in July 2010, five years and one month ago. An increase of over 10% in prices as compared to 12 months ago is an indicator of “accelerating price increases.”

Price increases for Tokyo, which represents just under half of the total number of properties in the overall metropolitan area striking. The average price in August was 43.51 million JPY, 2% higher than the previous month and 14.6% higher than August of the previous year. In particular, the 23 wards of Tokyo experienced a rise of 16.1% over August of the previous year.

Demand has now stabilized. Investigations by REINS TOWER reveal that the number of contracts signed for the purchase of used condominiums in the Tokyo metropolitan area in August increased by 18.1% over the figures for August of the previous year. “There is a wide-ranging demand for real estate in the Tokyo metropolitan area. Buyers purchase not only to live in the property themselves, but also for investment purposes or as a method for dealing with the inheritance tax.” (Mitsui Fudosan Realty)

Meanwhile, prices rises have remained modest in the commuter-town suburbs of the Tokyo area. Compared to the same month last year, prices in Kanagawa Prefecture rose by 4.6% while in Saitama Prefecture, they rose 2.7%. In contrast, in Chiba Prefecture experienced a 2.6% drop.

Selectiveness about location appears to be growing stronger, and according to Nomura Real Estate Urban Net, “In particular, interest in areas where one must commute over one hour to get to the central parts of Tokyo is low.”

The Kinki region (Osaka, Hyogo, Kyoto, Shiga, Nara, and Wakayama prefectures) also displays the same trend to bipolarization as the Tokyo metropolitan area. Prices for used condominiums in the Kinki area in August averaged at 18.59 million JPY, an increase of 0.4% over prices for July and 2.4% over prices for the previous August. Prices in the central areas of Osaka City rose by 11.5% to 32.32 million JPY, a significant figure when compared to price rises in the overall Kinki area.

Prices for used condominiums in Aichi Prefecture have peaked. The average price for August was 16.11 million JPY, which is an 0.4% increase over prices in July, and a 4.7% increase over prices for August of the previous year. Prices have been increasing for 13 years, but according to Tokyo Kantei, “Compared to areas such as metropolitan Tokyo, the market is small and is losing momentum.”

Original Source: Nikkei Shinbun

 
 

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