Second-hand condominium prices continue to rise. According to a report by Tokyo Kantei the average price of second-hand condominiums in the metropolitan area (Tokyo, Kanagawa, Chiba, and Saitama) in September 2016 was 0.3% higher than the previous month at 35.3 million yen, making this part of a 9 month consecutive increase (Prices calculated based on roughly 7.02 million units held by Tokyo Kantei in calculated at 70㎡ nationwide).
The 23 wards of Tokyo saw a 19 month consecutive rise in prices until February of 2016, and while Tokyo as a whole saw a temporary pause in its 24 month price increase in July, it began to increase again soon after. It seems the demand for second-hand condominiums continues to remain strong. While on one hand newly constructed condominiums seem to to have plateaued at Tokyo's high prices, second-hand condominiums that can be bought relatively cheaply are more and more popular.
While the rate of increase in Tokyo appears to be somewhat reduced recently, areas surrounding Tokyo such as Kanagawa or Chiba, etc. are seeing price rises accelerate, suggesting the popularity of second hand condominiums is spreading outwards from central Tokyo.
In Addition, there seems to be a similar situation when it comes to office vacancy rates. While central Tokyo still maintains a low vacancy rate as ever, a drop in vacancy rates has become clearer in other areas of Tokyo.
In short, it seems that the overall real estate market works by demand increasing according to the pattern of "Central Tokyo -> Outer Tokyo -> Tokyo area -> Local cities". Thinking about it this way, the trends of Tokyo real estate affect the fate of the real estate market greatly. In other words, as long as there is no large collapse the Japanese real estate market seems like to remain peaceful.
Nov. 08, 2016