On October 21st, the Real Estate Economic Institute released its latest report on the brand-new condominium market in the Greater Tokyo Area (GTA) for the first half of fiscal 2024 (April to September) and also for the month of September.
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The report highlights a sharp downturn in new condominium sales, driven by consecutive declines and a historic low in unit releases.
First Half of 2024: Sales Drop to Record Lows
In the first half of fiscal 2024, only 8,238 new condominium units were put on the market, a significant 29.7% decrease compared to the same period in 2023.
This marks the third consecutive half-year decline, and the lowest figure recorded, even surpassing the impact seen during the COVID-19 pandemic in 2020, when 8,851 units were launched.
Broken down by measured region:
Tokyo's 23 wards: 3,242 units (down 42.9% Year-on-Year; YoY))
Tokyo suburbs: 714 units (down 24.8% YoY)
Kanagawa Prefecture: 2,160 units (up 4.2% YoY)
Saitama Prefecture: 788 units (down 29.8% YoY)
Chiba Prefecture: 1,334 units (down 29.4% YoY)
Initial Contract Rates and Pricing
The initial contract rate for newly launched units in the first month of sales fell to 64.3%, a 7.1-point drop from the previous year, dipping below the 70% threshold for the first time in two years.
The initial contract rate shows the percentage of new condos where buyers commit to purchase during the first sales phase. A 70% rate is the global benchmark for market strength. Rates above 70% indicate healthy demand, while anything lower signals weaker buyer interest.
Despite the declining contract rate, prices have continued to rise:
Average price per unit: ¥79.53 million (up 1.5% YoY)
Average price per square meter: ¥1.209 million (up 1.7% YoY)
Both unit prices and per-square-meter costs have risen for the second consecutive year.
September 2024: Another Month of Decline
In September, the downward trend persisted, with 1,830 units launched, down 13.7% YoY and marking the sixth consecutive month of decline.
Regional Breakdown for September 2024:
Tokyo's 23 wards: 614 units (down 26.1% YoY)
Tokyo suburbs: 167 units (down 56.3% YoY)
Kanagawa Prefecture: 675 units (up 62.7% YoY)
Saitama Prefecture: 223 units (up 49.7% YoY)
Chiba Prefecture: 151 units (down 56.0% YoY)
The initial contract rate for September remained in the 60% range for the second straight month, coming in at 65.5%, a 2.2-point drop from last year.
New Condo Price Growth in September 2024
Average price per unit: ¥77.39 million (up 15.0% YoY)
Average price per square meter: ¥1.148 million (up 12.8% YoY)
Both unit and square meter prices have risen for two consecutive months.
Inventory and Forward Outlook
As of the end of September, the inventory of unsold units stood at 5,025, a decrease of 85 units compared to the previous month.
Looking ahead, approximately 2,000 new units are expected to be released in October.
Further Reading:
Real Estate Economic Institute FY 2024 First Half Report (Japanese only)
Real Estate Economic Institute September 2024 Report (Japanese only)
Source:
R.E. Port News (Japanese only)
