House prices in Tokyo were up 7.98% during the year to Q3 2022

The average price of existing condominiums in Tokyo rose by 7.98% (inflation-adjusted) in Q3 2022 from a year earlier, following year-on-year increases of 10.19% in Q2 2022, 9.49% in Q1 2022, 10.65% in Q4 2021, and 10.76% in Q3 2021. During the latest quarter, existing condo prices increased by 1.85%.

However, the average price of new condos in Tokyo fell slightly by 0.65% (inflation-adjusted) during the year to Q3 2022, in sharp contrast to a y-o-y increase of 12.55% in Q3 2021. On a quarterly basis, new condo prices were up slightly by 0.22% during the latest quarter.


Demand slowing; construction activity stable

Existing condominium sales in Tokyo fell by 10.8% y-o-y to 26,951 units in the first nine months of 2022, following an 11% increase in 2021, according to The Land Institute of Japan. Likewise, sales of existing detached houses in Tokyo dropped 14.8% to 13,627 units in Jan-Sep 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 the first nine months of 2022, dwelling starts rose slightly by 1% y-o-y to 643,120 units.

Rents, rental yields: moderately good yields in Tokyo, at 3.06% to 7.21%

Japan: city centre apartment, buying price, monthly rent (2-BR apartments)
  Buying price Rate per month Yield
Tokyo (Central City) $611,313 $1,721 3.38%

Recent news: The Japanese economy contracted by an annualized 0.8% in Q3 2022, in contrast to a 4.5% expansion in the previous quarter, reflecting weak private consumption, slowing business investment, and a surge in imports due to the continuous depreciation in yen. 

As such, the International Monetary Fund (IMF) slashed again its Japan’s economic growth forecast for 2022 to 1.7%, from its initial estimate of 3.3%, citing elevated uncertainty from the Ukraine crisis. The world’s third biggest economy expanded by 1.7% last year, after a huge contraction of 4.6% in 2020.