Tokyo Kantei released a report on October 31st, which compiled data on Japan’s three major urban centres. With an increase in double-income households, there has been increasing demand for condos in the city centre as these couples want shorter commuting distances. Also, as a way of reducing their taxable estates for inheritance purposes, wealthy Japanese have been buying condos in high-rise buildings.

At a glance:

• In Tokyo’s 23 wards, 4.98% of the land is being used for condominium buildings
• This is an increase of 1.02 points over the past 10 years
• In central Tokyo, some districts have a ratio of around 9%
• Shibuya ward was in top spot with 8.90%, up 1.46 points from 2007
• Chuo ward increased by 2.03 points to 6.07%
• The Nihonbashi district has seen an increase in small-to-medium sized residential developments

New condo prices in greater Tokyo are up 30% over the last 10 years to 58,230,000 Yen. This increase has had a ripple effect across existing property prices helping to increase their value by 20%, with the average of these 70 sqm condos in greater Tokyo reaching 35,550,000 Yen in September.

Back in the 1970s and 1980s, families were willing to put up with long commutes as city centre prices were too high. But now, buyers desire great transport access.

Back in 1970, 975,000 sqm of land in Tokyo’s 23 wards was used for condominiums, and this number almost tripled by 1975. Chiba Prefecture saw a 30-fold increase in the development of condominiums, going from just 58,577 sqm in 1970 to 1,784,478 sqm by 1975.

Due to the extremely limited supply of land for residential development, Chiyoda ward, with a ratio of 2.87%, was the only district in Tokyo’s 23 wards below 3.0%, but land used for condos has doubled over the past 30 years.

In Minato ward, the ratio was 8.55%, up 1.79 points from 2007 and up 4.87 points from 1987.

Osaka’s Kita ward had a ratio of 5.77%, up 1.59 points from 2007.

While these city centre condos are increasing in value, the outer suburban areas market is shrinking. Tokyo’s Ome City had a ratio of 0.67%, up just 0.07 points from 2007. Hachioji and Tachikawa had ratios below 2%.

Sources: The Nikkei Shimbun, October 31, 2017, Tokyo Kantei, October 31, 2017

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