On June 19th, the Real Estate Economic Institute announced updated market trends for new condominiums in the Greater Tokyo Area (GTA) for May 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 is no different in this regard.
May 2024 Greater Tokyo New Condominium Release Trends
The number of units released for sale in May was 1,550, a 19.9% decrease year-on-year (YoY) or compared to the same month last year.
Broken down by region measured:
Region | New Condo Units | % YoY Change |
Tokyo 23 ward | 600 | 32.3% down |
Tokyo non-23 ward | 157 | 101.3% up |
Kanagawa | 382 | 37.4% down |
Chiba | 280 | 39.9% down |
Saitama | 131 | 42.5% down |
Tokyo’s 23 wards saw a significant decline, marking a YoY decrease for the second consecutive month. Saitama and Chiba Prefectures also recorded substantial YoY decreases.
The initial contract rate dropped significantly to 56.0%, down 18.3 points from the same period last year, falling into the 50% range for the first time since January 2023.
Since 1,070 of the total 1,550 units released in May were 3-bedroom layouts and the 56% initial contract rate, it is possible to argue that demand for family-oriented condos could be softening. Only time will tell further.
Historical initial contract rate for GTA and Greater Osaka taken from report linked below and edited by Patience Realty.
Moving on, the average price per unit was 74.86 million yen, a 7.2% decrease, while the price per square meter was 1.14 million yen, a 5.5% decrease.
This marked the third consecutive month of YoY decline in average unit prices and the first YoY decline in two months for price per square meter.
No properties sold out on the first day of sales.
Approximately 2,000 units are expected to be released for sale in June.
Further Reading:
Real Estate Economic Institute GTA New Condo Market Trends in May 2024
Source:
R.E. Port News (Japanese Only)
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