House prices in Tokyo up 4.46% y-o-y in Q3 2019
The average price of existing condominiums in Tokyo rose by 4.46% during the year to Q3 2019, a sharp improvement from a y-o-y growth of just 0.22% in the previous year. During the latest quarter, existing condo prices rose by 1.67%.
In fact the average price of new condos in Tokyo surged by 13.9% y-o-y in Q3 2019, in stark contrast to a decline of 6.55% a year earlier.
Demand remains robust; supply is weakening
Existing condominium sales in Tokyo rose by 5.1% to 29,505 units in the first three quarters of 2019 from a year earlier, according to The Land Institute of Japan, while sales of existing detached houses in Tokyo increased 8.1% y-o-y to 14,775 units over the same period. In contrast, dwelling starts in Japan fell by 2% to 682,303 units in the first three quarters of 2019 from a year earlier.
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|
Recent news: The Japanese economy grew by an annualized rate of 0.2% in Q3 2019, slowing sharply from a 1.8% expansion in the previous quarter, amidst falling exports due to the US-China trade dispute and soft global demand. The economy is expected to expand by 0.9% this year and by 0.5% in 2020, from annual growth of 0.8% in 2018, 1.9% in 2017, 1% in 2016, 1.4% in 2015, and 0.4% in 2014, based on IMF estimates. The new sales tax hike from 8% to 10% in October 2019 is also expected to weigh on consumer spending this year.