Pre-owned Condominium in Tokyo Trends and fluctuations 2023

Post date: Wednesday, May 8, 2024

We have summarized here the transaction trends for the year 2023 of pre-owned condominium apartments in the Tokyo metropolitan area (Saitama, Chiba, Kanagawa) which is commutable to Tokyo including the central Tokyo area.

Trends and fluctuations 2023

Number of contracts

In 2023 the number of contracts signed for pre-owned condominiums was 35,987, exceeding the previous year for the first time in 2 years (1.6% increase from 2022).

Price Trend

The average price of pre-owned condominiums sold in 2023 was 45.75 million yen (7.0% increase from the year 2022), which was increase for 11th consecutive year, although the rate of increase decreased (compared to the year 2022’s 10.5% increase from 2021).

The average unit price per 1m2 was JPY719,000 (6.9% increase from the year 2022), which was also increase for 11th consecutive year and has risen by 88.3% in the past 11 years, although the rate of increase was also less than the year 2022’s 12.4% increase from 2021.

Average Exclusive Area　

The average exclusive area of condominiums sold in 2023 was 63.63m2 (0.06% increase from the year 2022), which was a slight but the first increase in 3 years.

Average Age

The average age of condominiums sold in 2023 was 29.41years old (28.16years old in 2022), which is even more aging.

Data：Real Estate Information Network System (REINS)

Price rise factors of pre-owned condominiums in Tokyo Metropolitan Area

Pre-owned condominium prices in the Tokyo metropolitan area continue to rise. The possible reasons for the price increase are as follows:

Continued low interest rates in Japan　　

With the lower interest rate of housing loans under the Government’s continued low interest rate policy in Japan, the number of prospective housing buyers is increasing.

Increased construction costs

Due to global inflation, conflicts, etc., construction material costs are soaring, and due to labor shortages, labor costs are also on the rise.

Increase in investment from overseas and foreign buyers

Due to the significant depreciation of the Japanese yen in 2022, the number of foreigners who purchase real estate in Japan with foreign currency is increasing. In addition to the trend of Japanese yen’s depreciation, the value of real estate in Tokyo is less expensive than that in other developed countries, and it is also one of the factors of the increase.

Increase in high-income households

The number of households called power couples who have an annual household income over JPY10 million and can purchase expensive real estate is increasing among the younger generation. Purchases by wealthy people other than such younger generation are also increasing.

Decrease in supply of newly built apartments

The continuing decline in the supply of new apartments is also affecting the rise in the market value of pre-owned apartments.

Rise in land prices

The increase in land prices has raised the asset value of condominium apartments, and the price of them are rising.

See our website: Official Land Prices of Japan in 2024

Changes in lifestyles due to the spread of telework

With the increase in working remotely, more and more people are seeking apartments with coworking spaces, units with a space that can be used as a workroom.

See our website: Rental Apartments with Co-working Spaces　

Summary

In 2023, the market trend of pre-owned condominiums in the Tokyo metropolitan area resulted in a slight increase in the number of contracts signed and an increase in prices for 11 consecutive years. Due to the fact that the average price of newly built condominiums in Tokyo's 23 wards has exceeded 100 million JPY and the impact of various other social conditions, the price of pre-owned condominiums is expected to rise continuously after 2024.