New home prices in Fukuoka are rising, and sales have dropped 18% in 24 years

Sales of newly built homes in Fukuoka Prefecture, Japan have dropped sharply. Sales were strong until 2022, but dropped significantly in 2023, and sales in 2024 dropped sharply by about 18% year-on-year. Due to rising construction costs, housing prices are also rising, and the average sales price of homes in Fukuoka City has risen by 14 million yen in one year. In addition to homes for the wealthy in the city center, there are more and more homes that cannot find buyers in the suburbs around the city and in the prefecture.

Onojo City in Fukuoka Prefecture is the BedTown of Fukuoka City. Around JR Onojo Station and Kasuga Station, new residential buildings (single-family homes) are lined up, including those under construction, and banners such as “Hot sale” and “Move in with your luggage” are hung on the balconies of completed homes. This is a scene that was not seen a year ago when many homes were sold out as soon as they were completed.

In the vicinity of this area, the average unit price per tsubo (about 3.3 square meters) was about 1.6 million yen (about 78,300 yuan) five years ago, but it has now risen to about 2 million yen (about 97,900 yuan). Yasuyuki Sakamoto, editor-in-chief of the private research company “Housing Distribution Newspaper” (Fukuoka City), believes that “this is a cheaper and more popular area compared to the center of Fukuoka. Due to the high competition and high construction costs, the sense of economic benefits has weakened and demand has also declined.”

According to the Housing Distribution Newspaper, among the houses newly launched in 2024 and the houses that have not been sold as of the end of December 2023, 3,891 new houses were signed for sales contracts in Fukuoka Prefecture in 2024. Compared with 2023 (4,721 units), it has decreased by 17.6%.

In the past 10 years, except for 2020 (3,658 units), which decreased significantly due to the new coronavirus epidemic, sales have been increasing until 2021 (4,944 units). The decline is increasing, with a decrease of 0.6% in 2022 (4,913 units) and a decrease of 3.9% in 2023 (4,721 units). The background is the rise in housing prices, which reflects the rise in construction costs.

The average price per tsubo in Fukuoka City in 2024 is 2.94 million yen (about 143,800 yuan), an increase of 21.8% from 2023. The average sales price per unit also reached 60.11 million yen (about 2.9407 million yuan), a sharp increase of about 14 million yen compared with 2023.

From the perspective of each district, the average price per tsubo in the popular Chuo District is 4.41 million yen (about 215,700 yuan), an increase of 45.1% from 2023. Compared with 5 years ago, it has increased to 1.8 times. The lowest price in Fukuoka City Higashi Ward (average price per tsubo 2.07 million yen, about 101,300 yuan) has also increased by about 40% compared with 5 years ago. Yasuyuki Sakamoto, editor-in-chief of the Housing Distribution Newspaper, pointed out that “this is a price that even working couples can hardly afford.”

In popular areas in the city center, houses worth more than 200 million yen have been sold out one after another, but sales of medium-priced houses in surrounding areas are struggling. Developers responsible for planning and sales are forced to readjust prices, or have to postpone sales due to delays in determining contractors.

As a result, the number of residential units supplied in Fukuoka Prefecture will decrease by 15.4% to 3,990 units in 2024. The head of a local company lamented, “In short, the construction cost is too high. If the price is reduced, the cost cannot be recovered, and if the price is increased, it cannot be sold.”

“The market centered on Fukuoka City has peaked” “It is difficult to sell due to rising construction costs.” In a survey conducted by the Fukuoka Prefecture Real Estate Appraisers Association, real estate professionals pointed out the changes in market conditions.

Due to the decline in housing demand, land prices are also hitting the ceiling.

The Fukuoka Prefecture Real Estate Appraisers Association released a judgment index (DI) of 36.2 for land prices in the second half of 2024, down 13.9 percentage points from the first half of the year. The judgment index is calculated by subtracting the proportion of respondents who answered “down” from the proportion who answered “increase”. The head of the association said, “We did not see a large increase like before.”

Regarding the future sales of residential properties, Yasuyuki Sakamoto analyzed that “the market stagnation trend with reduced supply and reduced purchases will continue.” It is reported that construction costs will continue to rise in 2025 and will be added to the high land prices. There are also factors such as rising interest rates, and the outlook is not clear.