Residential prices in Tokyo hit an all-time high

The growing number of high-earning individuals in dual-income households have caused the surging property prices in urban locations.

According to Bloomberg, the growing cost of construction and the rising demand from two-earner households have propelled new apartment prices in Tokyo, making history as it surpassed a 30-year-old record in 2021.

Figures published by the Real Estate Economic Institute revealed that the median price of new apartments in the capital city and its neighbouring areas reached JPY62.6 million (USD550,000) last year, exceeding the JPY61.2 million benchmark set at the height of the economic bubble in 1990.

Industry analysts believe that the price hike will continue in 2022.

Sumitomo Realty & Development Co. Manager Ryuta Hayakawa said: “With a shortage of land and high construction costs, supply is not likely to jump anytime soon. Considering the demand, it’s unlikely that prices will fall.”

In August 2021, Asian fund managers and investors shared their plans to grow their multi-family assets in Japan, reported Asian Investor.

Among them is Allianz Real Estate, which has a growing portfolio worth USD1.5 billion in the country. Rushabh Desai, the chief executive officer of Asia Pacific business at Allianz Real Estate, said the country’s residential real estate market “offers an attractive long-term stabilised cash yield.”

Seoul-based Igis Asset Management has also been on the lookout for investment opportunities between USD50 million and USD200 million in Japan’s multi-family sector.

As for homebuyers, Bloomberg added that Tokyo has always had a reputation of being an expensive city, yet decades of stagnancy, along with easy access to 35-year mortgages at extremely low-interest rates, have enabled working professional couples to afford apartments in city-centres compared to other major cities around the globe.

Ref: Residential prices in Tokyo hit an all-time high (propertyreport)