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Writer's pictureAdam German

Brand new condo inventory in Greater Tokyo drops 42 percent year on year in July 2024

Updated: 1 day ago

On August 20th, the Real Estate Economic Institute announced updated market trends for new condominiums in the Greater Tokyo Area (GTA) for July 2024.  

 

The report separates metrics into the following four categories:  

 

  • Number of condo units released for sale  

  • The initial contract rate  

  • Average condo price per unit  

  • Average condo price per square meter  

 

The initial contract rate refers to the percentage of condos released in the first phase of sales where buyers committed to signing a sales and purchase agreement.  

  

Analysts globally use the 70% threshold as a benchmark for estimating the health of buyer demand; an initial contract rate above 70% means healthy buyer demand and below means weakening buyer demand.  

  

Japan too follows the 70% global standard outlined above. 


July 2024 Greater Tokyo New Condominium Release Trends


The number of units released for sale in July was 1,496, marking a 42.3% Year-on-Year (YoY) decrease.  


The sharp decline is mainly due to the delay of several large-scale projects, causing a steep reduction in sales within Tokyo’s 23 wards and surrounding areas. 


Broken down by measured regions:

Region

New Condo Units

% YoY Change

Tokyo 23 ward

609

60.5% down

Tokyo non-23 ward

104

30.2% down

Kanagawa

439

84.5% up

Chiba

247

247% down

Saitama

97

50.5% down


Overall, Tokyo prefecture accounted for 47.7% of new condo sales contracts. 


The initial contract rate during the first month of sales was 70.9%, a 3.9 percentage point drop from the previous year, though it recovered into the 70% range for the first time in four months.


Greater Tokyo and Osaka Brand New Condo Initial Contract Rate July 2024

Historical initial contract rate for GTA and Greater Osaka taken from report linked below and edited by Patience Realty. 


The average price per unit dropped by 21.1% to ¥78.47 million, while the price per square meter decreased by 17.0%, reaching ¥1,203,000. 


Among the newly released properties, five projects, including the first and second phases of "Park Tower Omori" in Ota Ward, Tokyo, were sold out on the same day, totaling 71 units. 


The institute anticipates around 1,500 units to be released in August. 


Further Reading: 

Real Estate Economic Institute GTA New Condo Market Trends in July 2024   


Source: 

R.E. Port News (Japanese only) 

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