In a recent research study, Japan’s Real Estate Economic Institute found that the average price of newly constructed apartments (usually known as “mansion” in Japanese) that were sold in the 23 special wards of Tokyo last year was 114.83 million yen (US$774,909.70). That number surpasses 100 million yen for the first time ever and is also up a staggering 39.4 percent more than the year before last.
The jump in price is attributed to increased construction costs due to a sharp rise in the price of building materials as well as many new buildings being built in succession within the convenience of the special wards. There has also been increased demand to buy properties while interest rates remain low.
As one example, in Tokyo’s Takadanobaba neighborhood, a 13-floor building that’s a 7-minute walk from Takadanobaba Station is expected to be completed next year. Out of a total of 325 units, 85 of them went on the market in November–of which 70 units surpassed the 100 million yen price tag. Researchers attribute a large proportion of these buyers to be couples who both work and prioritize urban accessibility, enough space to work remotely from home at times, and communal spaces such as leisure areas on the roof.
Furthermore, last year the average price of a new apartment in the combined capital region–Tokyo, Kanagawa, Saitama, and Chiba prefectures–was 81.01 million yen, which is up 28.8 percent from the previous year and makes it the highest ever recorded for the third year in a row.
Here’s some more specific data about the individual prefectures:
While Kanagawa experienced the second highest spike in prices after the 23 special wards of Tokyo, Saitama was the only prefecture where prices actually dropped.
For this year, the Institute predicts that prices for newly built apartments will continue to stay at a high level. While the peak of sales has passed, construction costs are expected to rise as the price of labor increases, largely as a result of laws limiting overtime work in the construction industry beginning to be enforced in April.