The average unit price of new condominiums put up for sale in the greater Tokyo area in the fiscal year through March rewrote the record high for the first time in 31 years, reflecting surging land and construction materials prices, a private think tank report showed Monday.
The average condominium price in Tokyo and neighboring Kanagawa, Saitama and Chiba prefectures rose 6.1% from the previous year to ¥63.6 million, surpassing the previous record of ¥62.14 million, set in fiscal 1990, according to Real Estate Economic Institute Co.
Materials prices are expected to rise even further, due to logistics disruptions stemming from Russia’s invasion of Ukraine, as well as the yen’s weakening against the dollar.
The impact of higher materials costs on condominium prices is “likely to become evident in six to 12 months’ time,” an official of the institute said, adding that condominium prices are expected to be facing increased upward pressure from as early as this autumn.
The number of newly supplied condominium units in fiscal 2021 surged 13.2% to 32,872, exceeding 30,000 for the first time in three years.
Demand was strong not just in central Tokyo but also in the suburbs, as the number of people working from home increased amid the coronavirus pandemic.
The share of condominiums for which sales contracts were concluded within the month of release exceeded the boom-or-bust dividing line of 70% in all surveyed areas.
In March alone, the average unit price of new condominiums in the greater Tokyo area rose 3.0% from a year earlier to ¥65.18 million, up for the third consecutive month.
The number of newly supplied condominiums in the month plunged 19.7% to 2,492, due to sales being delayed to April or later.
The institute predicts that condominium supplies will recover to around 3,000 units in April.
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