Greater Tokyo new condo releases rise 56 percent year on year in January

On February 20th, the Real Estate Economic Research Institute announced market trends for brand new condominiums in the Greater Tokyo Area (GTA) for January 2024.

According to the institute, the number of January’s brand new condos released in the GTA (which consists of Tokyo, Kanagawa, Saitama, and Chiba prefectures) increased by 56.6% compared to the same month last year, reaching 1,112 units. 

This marks the second consecutive month of Year-on-Year (YoY) increase, with significant rises seen in various regions. 

In the Tokyo 23 wards, there was a 40.9% increase, totaling 389 units released. 

Surrounding areas witnessed notable YoY increases such as Tokyo's non-23 wards (104.1% increase), Kanagawa Prefecture (67.1% increase), and Chiba Prefecture (322.9% increase). 

However, Saitama Prefecture experienced a 61.6% decrease in new condos released compared to January, 2023. 

The initial contract rate reached 72.8%, exceeding the favorable indicator of 70%.

The initial contract rate is the amount of new condos that went to contract in the first month of sales.  This doesn’t mean all the condos in a particular building, just the ones that have been released for sale as developers sell units in phases.  An initial contract rate of 70% is considered healthy.   Extended periods below the 70% mark could mean buyer demand is softening. 

Prices continued to rise, with the average new condo in the GTA in January reaching ¥79.56 million, up 22.2% from the same period last year. 

Additionally, the unit price per square meter increased by 15.3% compared to the previous year, reaching ¥1,154,000 / sqm.

Looking ahead, it is anticipated that around 1,500 units will be released in February, indicating a slight decrease compared to February 2023 which saw 1,821 units new condos come on the market. 

According to the Nikkei Shimbun, Tadashi Matsuda, Senior Chief Researcher at the Real Estate Economic Research Institute, opined that temporary restraint in purchases around the same period last year might have been due to speculation about changes in the Bank of Japan's monetary policy, which ultimately failed to come to fruition. 

Nonetheless, he explained, "Consumer purchasing intentions are high as we approach the full-scale spring shopping season this year."

Further Reading:

Real Estate Economic Research Institute New Condo January 2024 Trend Report

2024年1月の首都圏新築分譲マンション市場動向.pdf

Download PDF • 280KB

Sources:

R.E. Port News (Japanese only)

Nikkei Shimbun (Japanese only; paywalled)