There are only a few days left of 2016. This year began with the start of a simultaneous worldwide stock depreciation, Brexit occurred, and Trump won the presidential race, etc., making it a year that can safely be called "full of surprises". Since this is the last article of the year, we will be summing up the state of the Japanese real-estate market in 2016.
Continuing the trend of 2015, foreign visitors to Japan had a big effect on the real estate market. According to figures from the JNTO (Japanese National Tourism Organization), since the number of visitors to Japan reached 10 million in 2013 it has continued to rise. The increase has also accelerated, with the number reaching 20 million for the first time ever in October of 2016.
In response to this, the construction rush of hotels and retail stores in Tokyo and other areas popular with tourists has continued. Further, while they must be "Within National Strategic Special Zones", guest houses such as Airbnb have been legalised. With the advancement of major real estate companies into the guest house business etc., guest house condominiums are becoming a new source of demand.
With a favourable level of demand, land prices and office rent, as well as new and old condominium prices etc have remained steady. In the "Standard Land Prices" announced by each prefecture on the 20th of September, residential and commercial areas saw increases of 2.5% from the previous year (a four year consecutive rise). In Tokyo, While popular residential areas such as Chuo and Minato ward saw a slowdown in price rises, surrounding areas such as Meguro ward saw rises higher than last year, and the tendency for surrounding areas to also experience land price rises was also notable. As for office rent, there was a 34 consecutive month rise up until October of 2016 (According to an investigation by Miki Shoji). Office vacancy rates also continue to have a demand balance remaining significantly below the goal of 5% in the Tokyo metropolitan area. In addition, while prices for newly built condominiums in the metropolitan area go up and down to some extent each month, the trend for it remaining a high price zone continues.
In summary, the 2016 real estate market has maintained its good condition since last year. Again, it seems that the increase of foreign visitors to Japan have had a positive effect on the market. While we won't go into detail here, there is the possibility of a further dollar / yen depreciation due to the "Domestic investment" policy of the newly elected Donald Trump going into 2017. If this is the case, even more visitors to Japan could be expected, along with an increase in real-estate investment from overseas. In this column, we will continue to provide useful information to our readers about the trends and changes of the Japanese real-estate market.
Dec. 20, 2016