Tokyo area condo prices down 5.4% in August for first drop in five months

TOKYO – The average price of a new condominium unit in Tokyo and its three surrounding prefectures fell 5.4 per cent from a year earlier to 97.7 million yen (S$800,230) in August for the first decline in five months, a research institute said on Sept 17.The drop in the overall average price for the Japanese capital and Chiba, Kanagawa and Saitama prefectures came as rising land prices in central Tokyo made it harder for developers to acquire sites, reducing overall condominium supply and the share of high-end properties, according to the Real Estate Economic Institute.By area, the average price in Tokyo’s 23 wards edged up 0.1 per cent from a year earlier to 138.21 million yen, while western Tokyo, outside the 23 wards, saw a 2.5 per cent increase to 66.78 million yen.The price rose 15.6 per cent to 68.4 million yen in Saitama prefecture, 10.6 per cent to 73.09 million yen in Kanagawa prefecture and 9.1 per cent to 67.02 million yen in Chiba prefecture, the institute said.The number of new condos listed for sale in the greater metropolitan area covering Tokyo and its three surrounding prefectures slid 12.4 per cent to 1,140 units, with the capital’s 23 wards seeing a 30.7 per cent plunge to 478 units.As land prices in central Tokyo remain high, the shortage of sites is expected to persist. An institute official said: “The average price could fall if more condos are put on the market in suburban areas.”“However, the outlook remains unclear due to rising construction costs and interest rates”, which boost housing loans, the official said.Government data on Sept 15 showed that the average price of land in Japan climbed for the fifth straight year as at July 1, led by major metropolitan areas with robust housing demand and tourist destinations seeing an increase in inbound visitors.The nationwide overall average logged a 1.5 per cent increase, the same pace as a year earlier and the sharpest since the bursting of Japan’s asset price bubble in the early 1990s. By category, commercial land prices rose 2.9 per cent on strong demand for shops and hotels, while residential land prices gained 1 per cent.But while the overall average in the three largest metropolitan areas of Tokyo, Osaka and Nagoya rose 4.4 per cent, growth in the rest of the country was flat at 0.4 per cent, highlighting a widening disparity. KYODO NEWS