House prices in Tokyo were up 9.49% during the year to Q1 2022
The average price of existing condominiums in Tokyo rose strongly by 9.49% (inflation-adjusted) in Q1 2022 from a year earlier, at par from the previous year’s 9.63% increase. During the latest quarter, existing condo prices increased by 0.91%.
The average price of new condos in Tokyo rose by 3.15% during the year to Q1 2022, up from the 3.52% fall in Q1 2021. On a quarterly basis, new condo prices surged 19.89% during the latest quarter.
Demand slowing; construction activity improving
Existing condominium sales in Tokyo fell by 17% y-o-y to 9,419 units in Q1 2022, following an 11% increase in 2021, according to The Land Institute of Japan. Likewise, sales of existing detached houses in Tokyo dropped 19.3% to 4,652 units in Q1 2022 from a year earlier, in contrast to a 5.2% growth during 2021.
In 2021, dwelling starts in Japan rose by 5% y-o-y to 856,484 units, following annual declines of 9.9% in 2020 and 4% in 2019. Then in Q1 2022, dwelling starts rose further by 4.9% y-o-y to 200,424 units.
Rents, rental yields: poor yields at 2.66%
Tokyo apartment costs are high, at around $16,322 per sq. m.
| Japan: typical city centre apartment buying price, monthly rent (120 sq. m) | |||
| Buying price | Rate per month | Yield | |
| Tokyo | $1,958,640 | $4,346 | 2.66% |
Recent news: The Japanese economy contracted by an annualized 1% in Q1 2022, a turnaround from the previous quarter’s 3.8% growth, as the surge in Covid-19 infections, the adverse impact of the Ukraine crisis, weak yen, and surging global commodity prices took a toll on economic activity. The world’s third biggest economy expanded by 1.7% last year, after a huge contraction of 4.6% in 2020.
Recently, the International Monetary Fund (IMF) slashed its Japan’s economic growth forecast for 2022 to 2.4%, from its earlier estimate of 3.3%, citing elevated uncertainty from the Ukraine crisis.