First growth in four years comes amid solid demand for high-end units
Tokyo, August 15, 2017: The market for new condominiums is showing signs of recovery in the Tokyo metropolitan area, led by robust demand for high-priced properties in central Tokyo.
The number of new condo units released in Tokyo and three surrounding prefectures rose 1.9% on the year to 14,730 units in the first half of 2017, marking the first increase in four years, the Tokyo-based Real Estate Economic Institute reported Tuesday.
“We have escaped the slump” of last autumn, said Tadashi Matsuda, a researcher at the institute.
The supply of new condominium units climbed 5.4% in the 23 wards that make up Tokyo’s core. The figure for the rest of Tokyo is higher, at 28.1%, in part owing to fewer new releases a year earlier. In central Tokyo, high-end units selling for 100 million yen ($893,800) or more continued to enjoy brisk sales.
“In the central Tokyo area, condominium showrooms are enjoying extremely high levels of visitor traffic, and some condo buildings have sold out their first day on the market,” Matsuda noted.
Parkhouse Shirokane Nichome Tower, a high-rise condo building in central Tokyo developed by Mitsubishi Estate, has many units priced at 100 million yen or higher. But about 90% of the 132 units that have been released since the property opened for sales in April have been sold or are moving toward going under contract.
A building in Tokyo’s Chuo Ward from Nomura Real Estate Development — Proud Nihonbashi Ningyocho Passage — carries a high price tag of 4.3 million yen per 3.3 sq. meters. Although the property has been on the market since just last month, the Nomura Real Estate Holdings subsidiary has closed or is looking to close sales contracts on about 90% of the 36 units.
Demand for condominiums remains strong in central Tokyo and other areas that offer easy access to transportation and other conveniences.
“Centering on dual income, no-kids couples and singles, people continue to move into central Tokyo,” said Yuji Okuma, president of developer Tokyu Fudosan Holdings.
The real estate institute projects the full-year supply of new condo units in central Tokyo to reach around 38,000 this year, a 6.2% rise that would mark the first increase in four years. Developers had held off on new releases to clear inventories, but they are now stepping up efforts to bring their large-scale condo properties to market.
Nikkei Asian Review
