It is becoming easier to estimate the market based on advertised rents through the use of big data, but our strength lies in our ability to provide knowledge of "rents that have actually been contracted.We have concluded annual several thousand rental agreement for Tokyo high-grade properties for 50 years and no other organizations have such real data.
Based on this data, we sell the ”KEN Residential Market Report", which summarizes rent trends for high-end rental properties in central Tokyo, to specialized organizations. We also develop and provide the "Housing Market Index," which is an index of overall condominium market trends (Japanese Only). The contents of these reports have attracted the attention of professional organizations that research domestic and overseas real estate markets.
Tokyo Real Estate Market Summary & Trend
| Feb-15 |
KEN Residential Market Report Vol.53(Feb 2024) Published.The rents of the major three wards in 2023-4th quarter (Oct - Dec) remained high despite a fall from the previous quarter when they posted record highs. The number of contracts is usually low in the 4th quarter, but it was higher than the same period last year and the same period before COVID-19 thanks to the supply of new properties. In the 4th quarter, the supply of new properties ranged widely, from small low-rise properties to large tower properties, including redevelopment, rebuilding and rental condominiums. We believe that the contracts concluded were attracted by the offer of the latest styles of living. The number of contracts was unusually large for this period since relatively low-priced properties at the 300,000 to 400,000 yen levels were included in the price range.While relocation was difficult in 2023 in an environment where the occupancy of existing properties was high and rents were rising, the largest number of new supplies of high-end rental housing in recent years contributed to the revitalization of the market. Although the impact of new supply looks likely to be weakened once in the next quarter, we hope that corporate demand will recover to close to the pre-COVID-19 level and that relocation will progress in association with job transfers and other factors. |
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| Nov-16 |
KEN Residential Market Report Vol.52(Nov 2023) Published.In 2023-3rd quarter (Jul-Sep), rents rose in the major three wards, reaching record highs in each ward. This was due to a recovery in contracts at the very high end, which had been on hold in the previous period, as a result of the supply of high-grade properties, as well as the progress of new non-Japanese assignments in the latter half of the busy season. The vacancy rate bottomed out around the end of 2022 and continues to rise slightly, but even though it has risen, it is still slightly lower than it was at the end of 2019 before the COVID-19 pandemic. This is attributable to the longer downtime before contracts are closed, in turn a reflection of price increases. In Minato and Shibuya wards, which have the highest concentrations of high-end rental housing, rents for large properties in particular have become more expensive and there are fewer properties available. This has led to an increasing number of high-end, high-grade properties in the surrounding wards being contracted at higher rents than before. Rents are expected to remain high for some time as the supply of new properties, including high grade and large types, will continue over the next year. |
| Aug-22 |
KEN Residential Market Report Vol.51(Aug 2023) Published.Vacancy rates increased in the three main wards during the second quarter of 2023 (Apr-Jun). In an environment of high occupancy, landlords are raising asking rents, and properties that are being offered at prices exceeding budget capacity are experiencing longer contract periods than in the past. Rents remained higher than the year-ago period, but were down from the previous quarter. The decline was due to a lull in activity in the very high end, which had been a factor in the rise in tsubo unit prices. We assume that the segment with high budgets is taking a wait-and-see attitude in anticipation of a new supply of high-grade properties this fall and beyond. Although it was a busy season for non-Japanese, the start-up was slower than in previous years, and the number of contracts signed did not increase. In the next fiscal year, we expect to see an increase in the number of contracts with the Japanese high-end segment and non-Japanese. |
| Jun-21 |
2022 Market Overview and Outlook for 2023In the luxury rental housing market in 2022, there was fierce competition over properties available for rent as foreign nationals started to re-enter Japan due to the relaxation of COVID-19 entry restrictions from mid-March, on top of persistently strong demand from Japanese households, fueled by the coronavirus crisis. Meanwhile, driven by higher rent budgets and some supply of high-grade properties, the number of achieved rents with over 30,000 yen per tsubo increased significantly. A fall in the vacancy rate to an unprecedented level led to tight supply, resulting in price gouging not only for properties highly regarded in terms of location and product planning but also for increasing numbers of other properties, and rents in 2022 were around 4% higher than the 2021 level. In 2023, high-end rental properties will still be demand despite lingering recession fears and, given that a full-fledged recovery in corporate demand is also anticipated, we expect that rents will remain mostly flat or rise modestly.On the luxury used condominium market in 2022, contract prices rose; nonetheless, the number of contracts increased, especially from the second half of the year, underpinned by demand for high-priced properties among buyers not wanting to miss out on prime properties as well as a recovery in purchases by foreign nationals to just short of pre-pandemic levels. The persistently high prices of properties in central Tokyo reflect further rises in the prices of landmark properties within the area and a gradual increase in the supply of new high-grade condominiums since last year after two or three years of a gradual reduction, which has pushed up price expectations for used properties. With costs increasing across the board, including land prices, construction costs and labor costs, the supply of new condominiums at prices lower than current levels is unlikely and prices for both new and used central Tokyo properties are expected to remain at elevated levels for some time to come. In 2023, we expect growing market uncertainty amid concern over the impact of factors such as rising resources and commodities prices, overseas interest rate hikes and financial system instability on the Japanese economy, compounded by a lack of clarity on the BOJ's future policy; however, we expect that contracts for high-end, carefully selected properties will continue to be achieved and that prices will remain mostly flat or rise slightly depending on the property. |
| May-18 |
KEN Residential Market Report Vol.50(May 2023) Published.The rents of the major three wards in 2023-1st quarter (Jan - Mar) remained high despite a fall from the previous quarter when they posted record highs. The number of contracts with the Japanese counterparties was on a par with the level before the COVID-19 pandemic, partly supported by new supply. Very highly priced contracts were at a record high, which contributed to the sustainment of high price levels. There were fewer contracts with non-Japanese compared to previous years and signs of a slowing in high-priced contracts. This is because foreign residents tend not to show much movement at this time of the year. It also reflects the absence of the rapid progress seen last year in overseas assignments which had been hindered by the COVID-19 pandemic. As the vacancy rate remains at historically low levels and the occupancy rate is high, lessors' bullish stance at the time of new lease deals or renewals is expected to persist for a while. |
| Feb-16 |
KEN Residential Market Report Vol.49(Feb 2023) Published.During the 4th quarter (Oct - Dec) of 2022, rents in the major three wards rose to exceed 20,000 yen per tsubo for the first time. The rise in rents reflects a fall in the vacancy rate to an unprecedented level, which led to tight supply. Rents rose for properties highly regarded in terms of location and product planning. In addition, the tight supply resulted in price-gouging and rents climbed for increasing numbers of other properties. Corporate performance, which affects demand for premium rental condominiums, remained firm. Executives at companies that are performing well, in particular, have a greater ability to pay rent and are paying higher rents, which has resulted in rising rents. Although there is concern over a possible economic slowdown, we expect that the market will be supported by demand for premium rental condominiums for some time to come. In the next fiscal period, which will be a busy period, we expect a full-scale recovery in corporate demand after the COVID-19 pandemic and an increase in relocations due to new supply. |
| Nov-17 |
KEN Residential Market Report Vol.48(Nov 2022) Published.During the 3rd quarter (Jul - Sep) of 2022, the vacancy rate improved in the major three wards, as it did in the case in the previous fiscal period, and rents also rose.Fierce competition over properties available for rent continued, partly due to contracts with foreign nationals who were permitted to enter Japan to take up new posts. Since the beginning of the year, the number of achieved rents with over 30,000 yen per tsubo has increased significantly, contributing to rises in rents. Higher rent budgets and some supply of high-grade properties also play a role in rent rises. The number of contracts without negotiations for price reductions is increasing and disparities between achieved rents and asking rents are narrowing again this year. Compared to the period between the latter half of 2020 and the first half of 2021 when relocation needs rose in tandem with reviews of living spaces, some of the momentum has been lost. However, as new supplies of condominiums for lease are scheduled in the next fiscal period, we hope to see an improvement in liquidity. |
| Aug-23 |
KEN Residential Market Report Vol.47(Aug 2022) Published.During the 2nd quarter (April - June) of 2022, the vacancy rate in the major three wards improved to below the level of around the end of 2019 before the outbreak of the COVID-19 pandemic. People seeking rental accommodation competed with each other in house hunting, as the coronavirus crisis has been fueling robust demand from Japanese households, while foreign nationals have started to re-enter Japan due to the relaxation of COVID-19 entry restrictions. Accordingly, rents remained at high levels, albeit slightly lower than the level of the last quarter when rents were at record highs. Assets with high occupancy rates increased and owners are taking a strong stance by raising rents, etc. The index of contract numbers for Japanese is declining, affected by the current situation of no vacancies in existing facilities and difficulty in achieving rents despite the high demand. We believe that high occupancy rates will continue and that actual prices per tsubo will remain at high levels, given that more contracts with foreign nationals are expected in the next quarter. |
| May-19 |
KEN Residential Market Report Vol.46(May 2022) Published.During the 1st quarter (January - March) of 2022, rents rose significantly and reached a new high, surpassing the previous apex recorded in the 4th quarter of 2020. The reasons behind this were that the number of contracts for low-end properties with rent levels between 0.3 million yen and 0.4 million yen was down, in contrast to ordinary circumstances when such properties are a driving force at a peak period, that the ratio of contracts for rents exceeding 0.5 million yen was high, and that there was a noticeable increase in the number of contracts for properties with high prices per tsubo. We consider that this resulted from movements among lessees with comparatively large budgets, who have relocated, irrespective of the time, when better properties appeared, while there is a sense of supply shortage due to the higher performance of rental properties across the board and the vacancy rate returning nearly to the level before the outbreak of the COVID-19 pandemic. Going forward, there will likely be an increase of new contracts with people from overseas assigned to work in Japan, whose entry in Japan has been delayed, with the relaxation of immigration restrictions. It is expected that an increase in demand for large-scale properties evaluated highly by people from overseas more than by Japanese and large properties for single occupiers and couples favored by non-Japanese will lead to a further improvement in vacancy rate and rises in rents. |
| Mar-21 |
2021 Market Overview and Outlook for 2022In 2021, the total number of contracts with Japanese and foreign nationals in the luxury rental housing market increased almost 10% from 2020 level, and rose also from the level in 2019, before the outbreak of the COVID-19 pandemic. This reflected a rise in relocation demand boosted by new needs for condominiums with more rooms or larger condominiums, driven by an increase in people working from home and more time spent at home amid the pandemic, although it remained difficult to conclude contracts with foreign nationals who were assigned to Japan because of restrictions on entry to Japan amid the pandemic. Among Japanese renters, who account for a large percentage of demand in the market, demand grew for condominiums with high rents. Asking rents rose for condominiums that attracted many inquiries and more than one application. Consequently, contract rent per tsubo in 2021 rose almost 3% from the 2020 level. After the spread of COVID-19, vacancies, particularly in compact units, increased, but in 2021, contracts were made partly due to campaigns for finding new tenants. The occupancy rate recovered almost to the pre-COVID level. Supply began to tighten in the market. As the number of condominiums available for rent is declining, the number of contracts is unlikely to grow in 2022. Meanwhile, contract rent per tsubo is expected to remain high due to tight supply. New supplies of high grade condominiums are planned, and relocation demand is expected to be stimulated by "good supplies." The entry of foreign residents to Japan after the lifting of restrictions on entry to Japan could boost demand and create upward trends.The used condominium market in 2021 saw increases in both actual demand, particularly from people who reconsidered their homes as they worked from home for long periods, and temporary demand for real estate against the backdrop of monetary easing amid the COVID-19 pandemic. As a result, the number of contracts increased, and contract prices rose. The market was brisk. High-income, dual-income households' appetite for purchasing condominiums continued and boosted demand. Of luxury condominiums in the center of Tokyo, the prices of landmark properties in certain areas are soaring. In 2022, concerns over stock price changes, rising resources prices, and interest rate hikes have been cited. The world situation is unstable. However, we expect that contract prices per tsubo will remain flat and prices of certain properties will rise slightly, reflecting greater awareness about the housing environment, the financing environment, and expected tax breaks. |
| Feb-16 |
KEN Residential Market Report Vol.45(Feb 2022) Published.During the 4th quarter (October - December) of 2021, the vacancy rate, which had increased in the previous quarter, decreased and returned to the level two quarters earlier while rents remained high in the three major wards. New contracts from foreigners assigned to work in Japan remain unlikely due to the ongoing restrictions on entry to Japan. Vacancies in large residential units designated for foreigners increased in the previous summer due to the tenants’ repatriation. The relatively large floor area of these properties, the demand for which had increased among Japanese customers during the COVID-19 pandemic were met, and contracts signed increased. Contracts signed for compact residential units, demand for which had somewhat weakened from the pre-COVID-19 level, slowly increased using promotional campaigns. The vacancy rate is beginning to recover from the worst level in the first half of 2021. Supply is beginning to be perceived as short in the market again, causing the supply-demand balance to tighten. Completion of a number of high-grade redeveloped properties are scheduled in the next period, which may encourage moving and high unit prices. |
| Nov-17 |
KEN Residential Market Report Vol.44(Nov 2021) Published.Rents in the three major wards remained high in 2021-3rd quarter (Jul-Sep). During the COVID-19 pandemic, demand for compact residential units, which were often rented for convenience is weakening, while the need for larger residential units, such as units with more rooms, is increasing, and high rent contracts continue to be strong. There is a scarcity of properties with highly rated locations and product planning, and rents are also continuing to rise, with rents remaining at high levels. However, given many cancellations, the vacancy rate, which had improved in the previous quarter, returned to the level of the quarter before the previous quarter.In the next fiscal year, restrictions on behavior will be eased with the ending of the state of emergency, and economic activity is expected to resume. Nevertheless, it may still take some time before the search for compact residential units returns, since it requires that, industries such as restaurants and tourism which have been damaged by the COVID-19 pandemic recover and that people again look for houses to live in near their workplaces. |
| Aug-23 |
KEN Residential Market Report Vol.43(Aug 2021) Published.The vacancy rates of the major three wards, which had been worsening since the second half of last year, improved in 2021-2nd quarter (Apr-Jun). An increase in relocation demand continued as people spend more time at home. Even when compared to the April-June period before the beginning of the COVID-19 pandemic, the number of contracts grew, resulting in improvements. In addition, as high rent contracts remain strong, improvement in vacancy rates has been centered on large residential units. The asking rent of properties with strong inquiries and an increasing number of applications is being raised. Rents for this fiscal period turned out to be up closer to the highs of the 2020-4th quarter. The number of super high rent contracts has been increasing since around the end of last year, and it is pushing up unit rent per tsubo. As new properties in good locations are expected to be provided in the next quarter, we believe that rents will remain at high levels. |
| May-21 |
KEN Residential Market Report Vol.42(May 2021) Published.The rents of the major three wards in 2021-1st quarter (Jan-Mar) remained high despite a fall from the previous quarter when they posted record highs. Although new contracts with foreign workers decreased due to entry restrictions, the fall in the rents was not significant, because the number of contracts was higher than a year ago, led by continued robust demand from Japanese renters, and because of favorable movement in the high rent levels greater than 0.5 million yen, which was rare in a busy period. We believe that the relocation demand is being fueled by new needs generated by the COVID-19 pandemic, as people are spending more time at home and are refocusing their interests on living spaces that also provide a work-friendly environment due to the increase in people working from home. Although no change has been seen in the bipolarization of the market in which new contracts for favorable rental properties land at higher unit prices while the performance of properties that are overvalued in light of their location and design is weak. For the foreseeable future, this demand situation will likely underpin the market. |
| Mar-21 |
Housing Market Index Vol. 40 (Second Half of 2020) Published.In the July-December period of 2020, rents for large (80 sqm or more) and standard (40 sqm-80 sqm) condominiums, new and used, in Tokyo's 23 wards hit record highs. Rents for small condominiums (less than 40 sqm) fell slightly from all-time highs recorded in the preceding period. The prices of large and standard condominiums, new and used, declined slightly from record highs recorded in the preceding period. The prices of new, small condominiums decreased slightly from the preceding period but remained high. The prices of used, small condominiums hit record highs. |
| Mar-21 |
2020 Market Overview and Outlook for 2021In 2020, the number of contracts in the luxury rental housing market decreased in April and May, after a state of emergency was declared due to the COVID-19 pandemic. The number, however, rebounded in June. From around September, after the Go To Travel campaign began, domestic Japanese demand recovered remarkably. Toward the end of the year, entry restrictions were relaxed, and contracts with foreign nationals who had begun working in Japan increased. Despite the unprecedented crisis created by the COVID-19 pandemic, the annual number of contracts did not fall significantly. Rent per tsubo for new contracts remained high, supported by market demand, mainly from Japanese. Regarding the vacancy rate, vacancies increased particularly in compact residence units, reflecting the cancellation of contracts for second houses by Japanese and foreign nationals returning home. In 2021, there will not be the level of avoidance of the showing residence units due to the state of emergency that there was last year, and the number of contracts is not expected to fall significantly. As the number of units offered is increasing, properties that appear to be overvalued in consideration of their location and design are unlikely to be chosen. Demand from wealthy Japanese, the major customers for luxury rental housing, remained strong partly due to high stock prices, and rent per tsubo will not fall significantly, but any reduction of rents in more properties where leasing makes slow progress will put downward pressure on rents. In the used condominium market, the showing occupied units was adversely affected by the COVID-19 pandemic from March 2020. In April and May 2020, after the declaration of a state of emergency, the market took a wait-and-see attitude. From around August, after the state of emergency was ended, the number of contracts recovered to exceed the year-earlier level. As for high-rent condominiums, the wait-and-see attitude continued and investment demand was slow until the summer, but the market for those condominiums recovered from around October. This reflected the resumption of economic activity, particularly the Go To Travel campaign, an increase in motivation to buy homes as people began to rethink their living spaces in view of the prolongation of the COVID-19 pandemic, and the wealth effect of higher stock prices among wealthy Japanese. Despite the COVID-19 pandemic, the number of contracts in 2020 did not fall significantly. The supply of new condominiums for sale continued to decline in 2020 due to COVID-19. Inventories of used condominiums decreased from around the end of 2019, while demand did not fell significantly. As a result, prices remained high. In 2021, there is not likely to be a wait-and-see attitude as there was during last year's state of emergency. We expect that the momentum from the end of last year will continue until summer 2021. We expect that prices will remain flat or rise slightly chiefly on the back of financial institutions' steady lending, the expansion of housing loan tax breaks and because the high stock prices and the current monetary policy are expected to continue. |
| Feb-21 |
KEN Residential Market Report Vol.41(Feb. 2021) Published.The vacancy rate of the major three wards in 2020-4th quarter (Oct-Dec) weakened slightly, following the significant deterioration in the previous quarter, while rents posted record levels, exceeding those recorded in 2018-3rd quarter. Under circumstances in which economic activities have been resumed, demand from Japanese renters showed a significant recovery. The number of contracts with foreign workers also increased with eased entry restrictions in November and December. The three parameters that are needed for high grade residences to have comparative advantages over other properties are said to be location, design and appropriate rents. New contracts continued to land for properties satisfying all three parameters. Actual unit prices of some of these properties exceeded their previous levels. This contributed to the rise in rents. However, properties that are overvalued in light of their location and design tend to remain vacant. Solicitation campaigns and other measures are being taken to deal with those properties. Going forward, demand from foreign workers cannot be expected due to the second round of entry restrictions associated with the declaration of a state of emergency. Moreover, some properties with increasing vacancies may be forced to adjust rents. Accordingly, we expect that rents will likely hover at lower levels. |
| Nov-20 |
KEN Residential Market Report Vol.40(Nov. 2020) Published.In the third quarter (July-Sep) of 2020, the vacancy rate of the major three wards of Tokyo, which had been improving, rose to nearly the same level as the rate after the Lehman Brothers collapse, when it worsened quarter after quarter. In the preceding quarter, vacancies of compact residences began to increase, whereas the quarter under review saw an overall increase, including vacancies at larger housing units. We view this as the impact of the continuing situation of the cancellation of second home contracts by Japanese nationals as well as the non-arrival of inbound foreign workers. Rents declined modestly both on quarterly and yearly bases. A rise in the percentage of rental contracts for lower unit prices between 300,000 yen and 500,000 yen was one of the factors that led to the decline in the actual price per tsubo. While vacancies are increasing, properties that are overvalued in light of their location and design are less likely to be chosen. Returning demand from those who are assigned to posts in Tokyo and a recovery in general demand from Japanese renters would be positive factors. Although the number of contracts with foreign renters is currently declining, demand is expected to gradually recover as entry restrictions are loosened more widely for those planning to stay in Japan over the medium to long terms. |
| Sep-20 |
Housing Market Index Vol. 39 (First Half of 2020) Published.In the January-June period of 2020, rents for standard (40 sqm-80 sqm) and small (less than 40 sqm) condominiums, new and used, in Tokyo's 23 wards continued to rise moderately. Rents for large (more than 80 sqm) condominiums fell slightly from record highs in the previous period. The prices of new, large condominiums increased significantly from the previous period, when prices due to a large supply of land on the site of the Olympic Village in Chuo-ku, and the average price rose in the period under review as the total number of contracts decreased and the contracts for high-priced (¥2 million or more per square meter) properties accounted for a higher percentage, about 40%. The prices of new, standard condominiums also climbed from the previous period for the same reason. The prices of new, small condominiums remained about at the same level as record highs in the previous period. The prices of used, large condominiums rose significantly, to their highest levels since the survey began. The prices of used, small condominiums remained roughly flat. The prices of used, standard condominiums hit record highs for the 12th consecutive period. |
| Aug-20 |
KEN Residential Market Report Vol.39(Aug. 2020) Published.In the second quarter (April-June) of 2020, rents in the major three wards of Tokyo rose modestly, helped by high unit price rental agreements for new residences in Shibuya-ku. However, rents in Minato-ku were below 19,000 yen for the second consecutive quarter and rents in Setagaya-ku fell to the 10,000-yen range, with no strength observed. The decline in rental agreements with foreign renters newly assigned to Japan due to the restriction on entering Japan is one of the factors inhibiting unit prices for rents from rising. Amid the state of emergency declared by the government of Japan, the numbers of rental agreements in April and May fell to approximately 70% of the levels a year ago. Inquiries started to increase at the end of May and the number of rental agreements in June returned to the level of a year ago, contributing to a moderate improvement in the vacancy rate. Although there is no significant change in lessor attitudes, there are new needs for residential units with larger numbers of rooms and greater floor areas. On the other hand, moves to cancel agreements for renting second homes are in evidence, and it remains to be seen what will happen in the market. |
| May-20 |
KEN Residential Market Report Vol.38(May 2020) Published.In the first quarter (Jan-Mar) of 2020, rents in the major three wards declined moderately from the previous quarter. It is traditionally a period of relocation due to employee transfers and school enrollment and rental agreements for Japanese were no different than past years. Foreigners, however, saw a significant suspension or postponement of new assignments to Japan due to concerns about the COVID-19 coronavirus. This resulted in a decrease in the number of rental agreements for large residences and those with high rents, compared to past years. Moreover, it is hard to predict the future course of the coronavirus pandemic and the economic environment. Reflecting the obscured future prospects, demand for relocation to new homes due to tighter budgets is likely to arise in the future. However, as long as the current situation is sustained with high occupancy rates, limited new supply and the small number of properties available for rent, significant declines in rents will be unlikely. |
| Mar-20 |
Housing Market Index Vol. 38 (Second Half of 2019) Published.In the July-December period of 2019, rents for all types of condominiums, new and used, in Tokyo's 23 wards continued to rise moderately. The average price of new, large (80 sqm or more) condominiums decreased due to a large supply of properties whose average price was low. The prices of new, standard (40 sqm-80 sqm) reached the third highest level on record. The prices of small (less than 40 sqm) properties hit record highs since the survey began. The prices of used, large and small condominiums were at their second highest level. The prices of standard condominiums recorded all-time highs. |
| Feb-20 |
KEN Residential Market Report Vol.37(Feb. 2020) Published.The vacancy rate of the major three wards in 2019-4th quarter (Oct-Dec) improved significantly. In Minato-ku, where the improvement has been particularly strong, the performance of the properties in Akasaka and Roppongi areas further improved and there was also the impact of the exclusion, from the aggregate calculation of vacancy rate, of properties with unoccupied rooms due to suspended leasing to prepare them for sale. Rents in the major three wards fell slightly from the previous quarter. Considering that the number of new contracts is at a low during the fourth quarter every year, it was far from the substantial fall seen a year ago, partly reflecting contracts by Japanese renters who fared well with unit prices of 500,000 yen and higher compared with the same periods in recent years. The next quarter is the busy period for Japanese renters and we anticipate good circulation in the market connected with retenanting. |
| Nov-19 |
KEN Residential Market Report Vol.36(Nov. 2019) Published.In the third quarter of 2019, rents in the major three wards were up slightly from the previous quarter. In the quarter under review, contracts by Japanese renters moved beyond the year-ago level, driven by contracts with high unit prices seen around the Shibuya, Ebisu and Yoyogi areas of Shibuya-ku. In contrast, there were fewer rental agreements for foreign tenants than last year, when new assignments were the most active in the past several years, and agreements at high-end prices were also weak. This was one of the factors for the highest price falling short of the level recorded in the same quarter of the previous year. The vacancy rate remained low in the quarter under review. The shortage of properties continued and there is no major change to the policy of raising rents among landlords. Therefore, it is expected that rents will remain flat or rise moderately for the time being. |
| Sep-19 |
Housing Market Index Vol. 37 (First Half of 2019) Published.In the the January-June period of 2019, rents for all types of condominiums, new and old, in Tokyo's 23 wards rose slightly from the previous period and from the previous fiscal year. Rents continued to climb moderately. Rents for large (80 sqm or more) condominiums, new and used, exceeded the all-time highs recorded in the previous period. The prices of new, large condominiums fell short of all-time highs recorded in the previous period, but remained high. The prices of used, large condominiums exceeded all-time highs recorded in the previous period. The prices of standard (40 sqm-80 sqm) condominiums rose for the 13th consecutive period. |
| Aug-19 |
KEN Residential Market Report Vol.35(Aug. 2019) Published.The average rent for the major three wards in 2019-2nd quarter remained at a high level, but declined both quarter on quarter and year on year. The number of contracts was steady, exceeding the results from the period a year ago, since it was a busy period for non-Japanese demand for leasing brokerage services. When looking at the price range, the results reflect the fact that a majority of transactions this period were those with a price range around 300,000 yen to 400,000 yen, while it was common for transactions in past years to be around 800,000 yen or higher. The number of contracts with Japanese renters was almost on par with the level a year ago. Because no large supply of rental properties is expected through 2019, the situation where there is more than one applicant per vacant rental property is likely to last for a while. However, unit price per tsubo in some areas has fallen below the levels of last year, and we believe that the upward trend in rent will start to weaken |
| May-19 |
KEN Residential Market Report Vol.34(May 2019) Published.Rents of the major three wards in 2019-1st quarter saw a complete reversal from a decline in the previous quarter to a rise, as the shortage of properties intensified, while the tendency among lessors to increase asking rents has not changed. In addition, the number of rental agreements with foreign tenants was almost comparable to the level between spring and summer, when expatriates are transferred to Japan. The rise in rents was partly due to a large number of contracts for high-end properties with a high unit price per tsubo, which was uncommon for this time of year. Another factor that helped the rise during the quarter under review was a new supply of properties in conveniently located areas in central Tokyo, including condominium units for rent, which boosted the ratio of contracts with high unit prices. |
| Mar-19 |
Housing Market Index Vol. 36 (Second Half of 2018) Published.In the July-December period of 2018, rents for standard (40 sqm-80 sqm) and small (less than 40 sqm) condominiums, new and used, in Tokyo's 23 wards remained roughly flat. Rents for large (80 sqm or more) condominiums increased. Rents for large condominiums, new and used, exceeded all-time highs recorded in the previous period. The prices of large and standard condominiums, new and used, rose to their highest points since the survey began in 1998. |
| Feb-19 |
KEN Residential Market Report Vol.33(Feb. 2019) Published.Rents in the three major wards in 2018-4th quarter (Oct-Dec) declined. This outcome was influenced by the fewer contracts involving non-Japanese customers for high-end properties with high achieved rents compared to the summer of 2018 and the slower growth in the number of contracts with Japanese customers in higher income brackets, which was solid in the previous year, although non-Japanese customer behaviors continued to be more favorable compared to the previous year. We believe that the sluggish behavior of Japanese customers in higher income brackets was partly due to a further decrease in rental properties. With respect to improvement in the performance of properties, the vacancy rate in Setagaya ward, which lagged behind Minato and Shibuya wards, improved further to decline below the previous market peak. A new supply of properties scheduled in the next fiscal period, albeit not very large, is expected to prompt movement toward relocating to new residences amid the current short supply of properties. |
| Feb-19 |
2018 Market Overview and Outlook for 2019In 2018, rents for luxury rental housing were expected to rise moderately following slight rises from 2016 to 2017, but climbed significantly, 8% from the previous year, in 11 major wards. That reflected tighter supply than expected due to insufficient properties and a recovery in demand from foreign nationals. Rents rose remarkably until summer, to a year-on-year increase of 11%, but the momentum was lost and rents declined until the end of the year. We expect that rents will remain flat in 2019. In 2018, the number of contracts for high-price (¥100 million) used condominiums slowed and decreased 4% year on year. The average contract price increased 8%.The increase was driven by a 9% increase in the average contract price for contracts whose prices were ¥200 million or more. The number of contracts for condominiums whose prices were ¥200 million or more increased more than 20% year on year. REINS and Ken Corporation's data shows that the number of contracts for condominiums whose prices were less than ¥100 million and the average contract price for those condominiums are falling, and the average contract price is likely to be relatively low in 2019. Among used condominiums whose prices are ¥100 million or higher, properties whose conditions were favorable were selected and contracts were concluded at high prices. We expect that the average contract price will remain flat in 2019. |
| Nov-18 |
KEN Residential Market Report Vol.32(Nov. 2018) Published.In the third quarter of 2018, the average rents in the major three wards rose, rallying past the old high in the current market peak. In the quarter under review, although the number of contracts overall failed to achieve the level of a year ago, replacement of tenants in residences with comparatively high rental prices rose out of significant movement among new expats working in Japan, which was a positive factor for the hike in the new contracted unit price. The vacancy rate declined further below the year-ago level, and reflecting multiple applications from customers for a limited number of solicitations, the difference between contracted rents and advertised rents has been diminishing substantially since the beginning of 2018. As there is no new supply of large-scale properties and no sign of slowing demand, we expect that the supply-demand balance will continue to be sustained for the foreseeable future and that rents will remain at high levels supported by high occupancy rates. |
| Sep-18 |
Housing Market Index Vol. 35 (First Half of 2018) Published.In the January-June period of 2018, rents for all types of condominiums in Tokyo's 23 wards, new and used, rose. The prices of new condominiums of all types increased, to record highs since the survey began. The prices of used, standard (40 sqm-80 sqm) condominiums increased for the 11th consecutive period, to record highs. The prices of used, small (less than 40 sqm) rose for the 12th consecutive period, to all-time highs. |
| Aug-18 |
KEN Residential Market Report Vol.31(Aug. 2018) Published.In the second quarter of 2018, the average rent in the major three wards continued to rise significantly from the previous quarter, exceeding the market’s previous high (around 2007 to 2008). In addition to demand from Japanese renters for properties in the high-price range during the quarter, a contributing factor was strong demand from new expats working in Japan. The vacancy rate fell to below 6%, the property occupancy rate was high, and the number of units seeking tenants was small. In particular, a larger number of contracts were signed in the second quarter than in the same quarter last year, the ongoing decline in contract termination was halted, and moving increased. Unlike the trend of moving that was limited to specific new properties supplied during the first quarter, moving in the second quarter increased in a number of areas. More recently, asking rents have been revised not only for high-grade properties and properties in first-class residential areas, but in a wide range of locations and grades. Rents, therefore, are expected to remain in the high-price range for some time. |
| May-18 |
KEN Residential Market Report Vol.30(May 2018) Published.In the first quarter of 2018, rents showed a significant rise to approach the market’s previous high. Given general market sentiment driven by a limited supply, lessees remain compelled to accept higher rents and nonrefundable deposits that are preferential to lessors. Demand usually becomes strong for condominiums with rents less than 300,000 yen per month during the January-March period every year, as many people relocate for business and children grow from elementary school students into high school students. This demand was not as strong as usual this year. Instead, demand remained strong for those properties with rents in excess of 300,000 yen per month. It appears that the lessees of luxurious residential properties are apt to move to new places as often as they feel like doing so. This year saw a supply of luxurious properties, which encouraged relocations leaving vacancies in existing properties. Going forward, it is expected that the market will be driven by relocation demand as seen in the period under review. |
| Mar-18 |
Housing Market Index Vol. 34 (Second Half of 2017) Published.In the July-December period of 2017, rents for all types of condominiums in Tokyo's 23 wards, new and used, climbed. The prices of new, large (80 sqm or more) and small (less than 40 sqm) condominiums fell from all-time highs recorded in the previous period and remained high. The prices of standard (40 sqm-80 sqm) hit record highs. The prices of used, standard condominiums rose for the 10th consecutive period, to record highs. The prices of small condominiums increased for the 11th consecutive period, to all-time highs. |
| Feb-18 |
KEN Residential Market Report Vol.29(Feb. 2018) Published.In the fourth quarter of 2017, rents remained at high levels. Rents in Minato-ku, which had risen significantly in the previous period, entered into an adjustment phase, affected by a large increase in rents in Shibuya-ku. In Shibuya-ku, the ratio of low unit-price contracts was low and there were a large number of high unit-price contracts, mainly in Yoyogi Koen and Daikanyama. The vacancy rate improved further from the previous period to a level lower than that around the time of the previous top formation of the market. Looking at Ken Corporation’s contract index, it fell after having peaked in the summer of 2016. However, this was not the result of any slowdown in demand but was rather due to reasons such as (i) the difficulty to relocate at reasonable rates, reflecting comparatively high rent levels; (ii) the limited number of options, attributable to high, nearly full occupancy ratios; and (iii) the limited supply. Although lessees’ willingness is high, this is not being translated into the closing of transactions. Rents for high-grade residences that are highly correlated to stock prices tend to lag about one year behind the stock market. Considering that stock prices are generally booming after beginning to rise around the end of 2016, we expect that rents for high-grade residences will remain high for some time to come. |
| Jan-18 |
2017 Market Overview and Outlook for 2018In 2017, the luxury rental housing market remained strong, reflecting firm demand for high-rent condominiums from Japanese and a recovery in demand for high-rent condominiums from foreign nationals. Rents in the 11 major wards rose slightly, 0.6% year on year. We expect that rents will continue to rise moderately in 2018. The luxury used housing for sale market was strong in 2017 as demand from customers who earned funds in different ways and wanted to have real estate did not decline. Contract prices for used condominiums whose prices were ¥100 million rose 5% year on year. We expect that prices will remain high in 2018. In 2017, the luxury rental housing market remained strong, reflecting firm demand for high-rent condominiums from Japanese and a recovery in demand for high-rent condominiums from foreign nationals. Rents in the 11 major wards rose slightly, 0.6% year on year. We expect that rents will continue to rise moderately in 2018. The luxury used housing for sale market was strong in 2017 as demand from customers who earned funds in different ways and wanted to have real estate did not decline. Contract prices for used condominiums whose prices were ¥100 million rose 5% year on year. We expect that prices will remain high in 2018. |
| Nov-17 |
KEN Residential Market Report Vol.28(Nov. 2017) Published.In the third quarter of 2017, the vacancy rate improved and rents rose relatively sharply. Both the vacancy rate and rents were affected by a significant improvement or rise in Minato-ku. With a small number of vacancies and high rents in the market, the general environment for contracts was unfavorable. In Minato-ku, however, the number of contracts in the quarter rose more than 10% year on year. Contracts at high-end properties accounted for a large percentage. There was a certain amount, albeit not large, of new supply of high-rent properties for Japanese renters. Japanese renters also entered into a certain number of contracts for existing properties. As for foreign renters, demand from families, which had declined last year, recovered. At high-end properties for families, relatively high-rent contracts were concluded. There will be new supply, although the number of units is limited. Given the present vacancy rate, which is sufficiently low, new properties will likely tap into demand, and contracts are expected to be concluded at high rents. |
| Sep-17 |
Housing Market Index Vol. 33 (First Half of 2017) Published.In the January-June period of 2017, rents for large (80 sqm or more) condominiums, new and used, in Tokyo's 23 wards fell. The prices of new, large and small (40 sqm or less) hit record highs since the survey began. The prices of used, standard (40 sqm-80 sqm) and small condominiums are continuing to hit record highs. |
| Aug-17 |
KEN Residential Market Report Vol.27(Aug. 2017) Published.In the second quarter of 2017, the vacancy rate remained largely unchanged, and rents increased slightly. The factors for the increase in rents were a large number of rental agreements for newer properties in Shibuya-ku, a sudden change from the previous quarter, and rental agreements with high unit prices around Shimokitazawa in Setagaya-ku. As indicated by Ken Corporation’s contract index, the number of contracts declined among both Japanese and foreign residents in the quarter under review. While the number of contracts remained unchanged for properties between 300,000 yen and 500,000 yen, that for properties in other price ranges declined year on year across the board. On the other hand, the vacancy rate remained low, and the market was sluggish with few contracts or cancellations. The factors behind this appear to be that renters recognize that they are in a situation where changing properties at a low price is difficult, given a sufficiently high level of rent, and that their choices are few because the occupancy rate of proprieties is as high as full occupancy. We continue to see cases of several applications being made for a property that started looking for a tenant after the former tenant vacated, so that the landlord chose the tenant with better conditions. In the quarter under review, business confidence improved further from the previous quarter, as shown by the Nikkei Stock Average, which exceeded 20,000 yen, and the outlook for corporate earnings also looks promising. Therefore, we expect that rents will continue to show robust tendencies. |
| Jun-17 | While the prices of new and used condominiums are rising, the number of people choosing to buy detached houses is believed to be trending upward. At the sales division of Ken Corporation, requests for used condominiums fell slightly and requests for detached houses increased from May. |
| May-17 |
KEN Residential Market Report Vol.26(May 2017) Published.In the first quarter of 2017, the vacancy rate remained almost unchanged at a low level and rents declined 3.0% compared to the previous quarter. Among the factors influencing this decline was the large number of rental agreements for older properties in the Takanawa area of Minato-ku and in the Hiroo area of Shibuya-ku. We believe rents have been stable at high levels. Looking at Ken Corporation’s contract index, the number of contracts in the quarter under review failed to achieve the level a year ago when there was the large new supply. However, demand remains at a high level, driven by buoyant needs by Japanese renters for properties between 200,000 yen and 300,000 yen and those between 300,000 yen and 500,000 yen. During the quarter under review, stock prices have fared well and business confidence was stable, as shown in the government’s most recent Monthly Economic Report, which noted the recovery in private consumption and improvements in corporate earnings. Due to limited new supply, there will be a favorable environment for maintaining the supply-demand balance and we expect that rents for high-grade residences will remain on a high plateau. |
| Apr-17 | Of the luxury rental housing that Ken Corporation handles, the number of condominium units for rent that used to be condominiums for sale whose prices were ¥100 million or more has been increasing since around 2014. The average contract price is favorable. Condominiums over ¥100 million will continue to be supplied, and their presence is expected to be strong. |
| Mar-17 |
Housing Market Index Vol. 32 (Second Half of 2016) Published.In the July-December period of 2016, rents for large (80 sqm or more) condominiums, new and used, in Tokyo's 23 wards continued to rise. Rents for standard (40 sqm-80 sqm) and small (less than 40 sqm) remained roughly flat. The prices of large and standard condominiums increased, and the prices of small condominiums fell slightly. The prices of used standard and small condominiums hit record highs. |