Second-hand housing listing prices in two districts of Tokyo exceed 200 million yen for the first time

Second-hand housing prices in the central Tokyo area continue to rise. The average prices in the popular Chiyoda-ku and Minato-ku exceeded 200 million yen (about 9.63 million yuan) for the first time in January. In addition to the strong demand from the wealthy and overseas, the reduction in the supply of new houses due to rising construction costs also pushed up prices. On the other hand, prices in surrounding areas have risen more slowly, and the polarization between the central Tokyo area and surrounding areas has become more obvious.

The average second-hand housing listing price in January announced by real estate research company Tokyo KANTEI on February 20 showed that the price in Tokyo’s 23 districts (converted to 70 square meters) was 90.21 million yen (about 4.35 million yuan), up 3.4% month-on-month and 25.6% year-on-year.

The average price in the six central wards (Chiyoda-ku, Chuo-ku, Minato-ku, Shinjuku-ku, Bunkyo-ku, and Shibuya-ku), where investment funds continue to flow in, reached 147.67 million yen (about 7.11 million yuan), up 3% from the previous month. Chiyoda-ku was 208.5 million yen (about 9.67 million yuan), and Minato-ku was 201.7 million yen (about 9.64 million yuan), breaking the 200 million yen mark for the first time since statistics began in January 2004. The remaining four wards also hit their highest levels since 2004.

Masayuki Takahashi, senior chief researcher at Tokyo KANTEI, said, “The spring real estate transaction season is approaching, and homeowners have adopted a strong pricing strategy.” As the price increase trend continues, the listing price is set higher than the recent transaction price.

In January, transactions of super-high-priced properties were very active. According to estimates by Japan Mansion Research, there were 52 units in Tokyo’s 23 wards with transaction prices exceeding 200 million yen, of which 7 units were sold for more than 500 million yen. Both are the highest monthly data in the past two years. Shinji Fukushima of the company pointed out that “the soaring housing prices in certain areas have caused the average price to rise.”

Behind this is the strong demand from the wealthy class in Japan, companies and overseas. Kazutaka Akabane, general manager of List International Realty, a Japanese real estate agency targeting the wealthy, said, “House prices are high and yields are low, and most of the customers in Asia buy for future appreciation.” Some Chinese customers renovate the houses to suit Chinese aesthetics and needs after purchasing them, and then sell them at high prices.

Houses with new age and good views are popular among overseas buyers. These are hardware conditions that cannot be changed even after renovation, so they are directly related to the asset nature of the house. Due to the sharp rise in prices, the sense of cost-effectiveness has been greatly reduced, and there is a trend of choosing rooms according to conditions in the same residential building.

The impact of the reduction in the supply of new houses is also great. According to the data of the Japan Real Estate Economic Research Institute, the number of new houses listed in the 23 wards of Tokyo in January decreased by 59% year-on-year. Due to the high construction costs and the reduction of development land, it is expected that the supply of new houses will continue to be difficult in the future, and demand is flowing to second-hand houses. Takahashi of Tokyo KANTEI explained that “people who originally wanted to buy new houses are now turning to buying second-hand houses, and the prices of such houses have risen sharply.”

On the other hand, in areas where the first-time buyers are the main buyers, prices have shown signs of stagnation. According to Tokyo KANTEI, the average price in Kanagawa Prefecture is 37.9 million yen (about 1.83 million yuan), up only 5% year-on-year. The average price in Saitama Prefecture is 29.24 million yen (about 1.41 million yuan), down 1.4% year-on-year. Prices in Chiba Prefecture are also lower than the previous year. Rising prices have led to a decrease in real wages, coupled with rising mortgage interest rates, which have affected home purchases.

It is difficult to predict whether the central area of ​​Tokyo will continue to rise in the future. Akabane of List International Realty said, “There are also voices that believe that prices in some areas cannot rise further.” There is a view that in mature neighborhoods without large-scale urban redevelopment plans, there is a lack of factors to further push up prices. Even in the central city, price fluctuations in different areas may vary.