The Rise of Super-Expensive Condos in Japan
A recent report by real estate assessment firm Tokyo Kantei Co. reveals a significant increase in the sales of super-expensive condominiums in Japan. Between 2019 and 2023, a total of 17,412 new condominiums priced at 100 million yen ($654,000) and up were sold across the country. This figure is 1.2 times higher than the sales recorded during the asset-inflated economy of 1988-1992.
The report suggests that developers are likely to continue offering increasingly expensive apartments. This trend is particularly evident in Tokyo, where 13,429 units were sold during the five-year period, 2.4 times the number sold during the previous bubble era. Sales in other prefectures outside Tokyo also surpassed the levels of the 1980s boom, with Okayama and Okinawa experiencing a tenfold increase.
The report also highlights the growing disparity between income and housing costs. The apartment-income index, which measures the average annual income of residents against the value of 70 square meters of condos, exceeded 10 in 2023 for the first time since its inception in 2006. This indicates that the average Japanese household would need to spend more than 10 years of their income to purchase a new apartment.
In Tokyo, the situation is even more pronounced, with the apartment-income index reaching 17.78. This means that the average Tokyo resident would need to spend nearly 18 years of their income to afford a new apartment.
The rising cost of housing is a growing concern in Japan, particularly for young people and families struggling to enter the property market. The trend of developers offering increasingly expensive apartments is likely to exacerbate this issue further.