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  • Writer's pictureAdam German

Average fixed term lease rents in Tokyo rise across all property sizes

On May 22nd, At Home, a Japan based property portal well used by renters, released the rental price trends for fixed-term lease properties in residential rental markets for fiscal 2023 (April 2023 to March 2024) in the Greater Tokyo Area (GTA). 

  

The survey and analysis covered fixed-term lease properties advertised for rent on the company's portal during the above timeframe.  

 

The properties were separated into two kinds; reinforced concrete condos and wood-frame rental units. 

 

Properties were further categorized by size as follows:  

  • 30 square meters and less for singles 

  • 30 to 50 square meters for couples 

  • 50 to 70 square meters for families 

  • 70 square meters and above for large families* 


*this size was only measured for rental condos as there were not enough 70 plus sqm wood-frame units to provide any meaningful insights. 

 

What is a fixed term lease and how is it different than regular leases? 

 

A fixed term lease is a type where the renter agrees from day one to move out when the contract is signed. 6 months prior to the end of the contract term, the owner can notify the tenant that they can re-contract (not renew as this word is a different legal definition) and will state the terms like new rent and new contract term. 

 

This differs from a regular lease that auto-renews under the original terms should the tenant not agree to a higher rent, or any other conditions proposed by the owner. 

 

A fixed term lease allows owners more power than a regular lease and as such, owners tend to want to offer fixed-term leases and tenants usually want regular lease contracts. 

 

The deciding factor ultimately is what kind of leases the owner’s competition are offering; if other similar and nearby units are offering a regular lease contract and only your property is offering a fixed-term lease, then your property will take longer to rent.  

 

Likewise, if the owner’s competition is mostly offering fixed-term leases then your property offering the same type of contract should not extend the vacancy more than normal. 

 

Greater Tokyo Condominium Fixed Term Lease Overview 

  

For FY 2023, the average advertised rent for fixed-term lease condominiums in the GTA increased across all areas and size categories compared to the previous year.  

 

By size category, rents for single-occupancy units, which had been declining or stagnant across all areas since 2020, saw a uniform increase.  

 

Notably, the three areas of Tokyo's 23 wards, the Tokyo non-23 areas, and Chiba Prefecture experienced double-digit growth rates. 


Courtesy of AtHome, edited by Patience Realty

 

Last year, only Tokyo's 23 wards had higher rents for fixed-term leases across all size categories, but this year Tokyo non-23 wards and Kanagawa Prefecture also saw fixed-term leases surpassing regular leases across all size categories.  

  

Looking at the number of properties, the proportion of fixed-term lease condos among all rental condominiums increased in four areas, excluding Chiba Prefecture, compared to the previous year.  

 

Saitama Prefecture, which had been on a declining trend since 2019, increased by 0.1 percent, marking the first rise in four years.  

 

Fixed term leases for large family-oriented units in Tokyo's 23 wards increased for the third consecutive year, reaching 30.7% of all rental inventory in this region, surpassing 30% for the first time since 2019. 

  

Greater Tokyo Wood-Frame Fixed Term Lease Overview  

  

For the fiscal year 2023, the average advertised rent for fixed-term lease wood-frame units in the GTA increased compared to the previous year.  

 

Greater Tokyo Wood Frame Fixed Term Rent Trends ENG

Courtesy of AtHome, edited by Patience Realty 

 

By size category, the rate of rent increase for family-oriented units was higher compared to other categories.  

 

Conversely, in the Tokyo non-23 wards, rents ;fell by 4.8%, marking the largest decline across all areas and size categories. 

   

The year-on-year comparison of the proportion of fixed-term lease properties among rental wood-frame houses showed a decline in Saitama Prefecture for the second consecutive year, as well as a decline in Tokyo's 23 wards for the first time since 2019.  

 

By size category, the proportion of single-occupancy units remained the highest. 

   

Further Reading: 

AtHome Fixed Term Leasing Report for FY 2023 (Japanese only) 

teikishakuya-yachin-2023
.pdf
Download PDF • 2.48MB

 

Source: 

R.E. Port News (Japanese only) 

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