The Real Estate Companies Association of Japan

PUBLICATION

REAL ESTATE in Japan

  • LAND PRICE TRENDS

The land prices published in 2018 showed the national average for residential land increasing for the first time in 10 years and commercial and all-usage land rising for the third consecutive year. Amid this gradual economic recovery and strong real estate demand, land prices are also increasingly recovering. In less urban areas, residential land still declined but at a slower pace than previously, and commercial land turned upward for the first time in 26 years. In this area, Sapporo, Sendai, Hiroshima and Fukuoka stand out, but this trend is spreading to other major cities.

Source: Ministry of Land, Infrastructure, Transport and Tourism

  • OFFICE MARKET

The major Japanese city office building market in 2018 was supported by active relocation and floor area expansion accompanying improved corporate performance, and many cities saw their average vacancy rates decline. In the five central wards of Tokyo, the vacancy rate dropped below 2% in November. Rents continued to rise and December’s month-on-month increase broke the record for the 60th consecutive month.

Source: Miki Shoji Co., Ltd.

  • HOUSING MARKET (HOUSING STARTS AND NEW APARTMENTS)

Impacted by the drop in rental and ownership, housing starts in 2018 declined 2.3% year on year to 942,370 units, the second consecutive year of decrease. By category, owned houses fell 0.4% year on year, rental 5.5%, condominiums 3.8%, although stand-alone houses increased 3.0%, resulting in slight increase in condominium housing to keep the four-year streak going.

New condominium sales in the Tokyo metropolitan area in 2018 rose 3.4% year on year to 37,132 units, the second consecutive year of year-on-year growth, due in part to strong purchasing demand for convenient high-quality properties. However, this was the third consecutive year that supply stopped short of 40,000 units, resulting in the annual contracted rate for initial month falling six percentage points year on year to 62.1%. The Kinki region increased 7.1% to 20,958 units with an annual contracted rate for initial month of 74.5% reflecting strength in Osaka Prefecture in particular.

Source: Ministry of Land, Infrastructure, Transport and Tourism; Real Estate Economic Institute Co., Ltd.

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