Tokyo existing condo prices fall for 4th straight month

Existing condominium prices in central Tokyo have fallen for the fourth consecutive month in August, a trend attributed to tighter visa rules for foreign residents and rising borrowing costs. The average price for a 70-square-meter unit in the capital dropped 0.2% from the previous month to ¥112.74 million, marking the first decline in 28 months, according to a report by real estate research firm Tokyo Kantei.

Prices had begun to fall in previous months in the more expensive city center areas, indicating a broader weakness in the Tokyo condominium market. The average price in the six central wards of Tokyo, including Chiyoda, Chuo, Minato, Shinjuku, Bunkyo, and Shibuya, decreased by 0.7% from the previous month. The average price across all 23 wards of the Japanese capital fell by 0.4% to ¥126.67 million.

Mortgage costs are increasing as the Bank of Japan raises interest rates and signals further credit tightening, which is dampening demand from homebuyers. The Financial Services Agency has also indicated it will strengthen oversight of real estate lending due to concerns that property prices in Tokyo may be overshooting, driven by both domestic and international investors seeking capital gains. Some investors are reportedly beginning to sell condos in anticipation of stricter regulations on short-term transactions. Tokyo Kantei anticipates that price adjustments will continue toward the end of the year, potentially spreading to surrounding areas.