The price is likely to continue to rise until the first half of next year.” Used condominiums are over 100 million! How far will they continue to go up?

I didn’t expect prices to rise at such a rapid pace.

In September, real estate research firm Tokyo Kantei (Shinagawa, Tokyo) announced that the average asking price for a 70m2 used condominium in the six central wards of Tokyo (Chiyoda, Chuo, Minato, Shinjuku, Bunkyo, and Shibuya) in August rose 2.0% from the previous month to a new high of 170.3 million yen.

We had expected the price to rise, but we did not expect it to rise at such a rapid pace,” said Tokyo Kantei.

Masayuki Takahashi, Senior Senior Research Fellow in the Market Research Department at Tokyo Kantei, Inc.

The U.S. and Japan kept their policy rates unchanged, partly because they were unsure what would happen to business confidence as a result of the Trump tariffs. Recently, the U.S. finally cut interest rates, but this has not stopped the yen from weakening. I think the current situation is that Japanese condominiums have been turned into a money game by people with high purchasing power, as the sense of affordability is guaranteed from the perspective of foreign countries.

According to Mr. Takahashi, a newly built condominium sold 10 years ago for 5 million yen per tsubo is now priced at more than 15 million yen for a used condominium. In the future, it would not be surprising to see a used condominium in central Tokyo priced at 300 or 400 million yen for a single unit.

On the other hand, what about newly built condominiums?

What about new condominiums? What will happen in the future depends on future policies, but there is no negative trend, so I think there is a high possibility that prices will continue to rise until the first half of next year.

In the 23 wards of Tokyo and central Osaka, the real estate industry is targeting foreign investors, wealthy Japanese, and super power couples with household incomes of 20-30 million yen. They are not dealing with the mass segment with household incomes of 10 million yen or less.

There are also luxury condominiums for sale with a vacancy rate of over 50%.

If they cannot afford to buy, they have no choice but to rent.

He adds, “Recently, there are people who don’t even consider renting out their units, because they are not sure if they can afford to rent them out. Because if you rent it out, you cannot put it on the market at the time you want to sell it. Many are leaving them vacant so that they can be sold immediately when the time comes when they want to sell.”

In fact, according to a field survey conducted by Chiyoda Ward, some luxury condominiums for sale have a vacancy rate of over 50%.

If there are tenants, the town will receive resident taxes, economic activity will increase, and the town will be revitalized. However, if the apartments remain vacant, they will not create a bustling town and will lead to the hollowing out of the city. Not wanting to leave the situation as it is, Chiyoda Ward has instituted “restrictions on speculative condominium purchases.

Kobe City has also begun to consider imposing a “vacancy tax” on owners of vacant tower condominiums. However,

Unless the Tokyo Metropolitan Government or the national government takes the initiative in imposing restrictions, it will be difficult to put a stop to the current overheated price hikes.

There is no reason for prices to fall.

While condominium prices are soaring, data also shows that the supply of new condominiums is down 28% from the previous month.

The land is a problem,” said Mr. Kurokawa. Considering asset value, people want to build near train stations. Office buildings, commercial buildings, and hotels are also targeting land in such locations. When there is a lot of competition, that drives up the price.”

The price will continue to rise until the first half of next year, but will the price level off after that?

It is difficult to say how long or how much prices will continue to rise, but looking at structural factors and the surrounding environment, there are no factors that would cause prices to fall.

Structural factors include land prices, building material costs, and labor costs. As for the cost of building materials, it has risen too high and will probably go down, but labor costs will not go down. The working population is decreasing due to population decline. Especially in the construction industry, compared to other industries, the population is aging and the working population is decreasing, and if wages are not raised, people will not be attracted. This is a structural trend.

What about the environment surrounding the construction industry?

Unless the yen’s depreciation is corrected to a significant degree, foreign investment money will continue to flow into the industry.

The weak yen has made imports more expensive, and prices continue to rise. I would like to see something done about it,

The government wants to attract foreign visitors to Japan. To do so, it is convenient if the yen continues to depreciate. So I don’t think they will move so aggressively to correct the situation.

If there is a major earthquake directly under the capital or Mt. Fuji explodes, people may refrain from investing in Japan and condominium prices may fall, but unless something like that happens, I don’t see any reason for them to fall.

Can the common people live in Tokyo anymore?