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Kyodo News: Central Tokyo population expected to keep growing

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Creative Commons: erikjohansson

KYODO: The population of three central Tokyo wards is projected to continue growing after 2025, when the overall number of citizens in the capital is estimated to take a downward turn, thanks to an apartment construction boom and convenient transport access. Chiyoda, Chuo and Minato wards have seen an influx of families with children and elderly people and the population growth there is expected to continue through 2040, but it could present municipal governments with challenges in providing adequate child and nursing care.

According to a Tokyo metropolitan government estimate, the population of the capital is expected to fall after hitting its peak of 13.98 million in 2025. But the three central wards are expected to rise further and reach a total of around 635,000 in 2040, up some 40 percent from January 2017. The three wards faced population drain to suburbs due to soaring land prices in the period of steep Japanese economic growth around the 1960s and 1970s and in the peak years of the bubble economy in the late 1980s.

However, the number of residents picked up in the late 1990s with Minato Ward’s population exceeding 250,000 in February for the first time in 54 years. Emiko Kanno, a 42-year-old office worker, lives in a Minato Ward apartment close to Tokyo Tower. “With the developed transportation system, the area is convenient for living and my husband’s commuting,” she said. A native of Hyogo in western Japan, Kanno used to live in Kanagawa Prefecture, southwest of Tokyo, but she moved to the area four years ago when she got married.

The international character of the area boasting many foreign embassies has been a draw and Kanno seems satisfied with the environment for raising her 1-year-old son. High-rise apartment buildings in the waterfront areas proved popular among families with small children and the total fertility rate, which shows the average number of children a woman will bear in her lifetime, stood at 1.44 in Minato in 2015, the highest among Tokyo’s 23 wards.

Chiyoda Ward, home of the national parliament and many government buildings, also saw its population surpass 60,000 for the first time since 1981. The population in Chuo Ward, where the Ginza shopping district and Tsukiji fish market are located, once fell below 80,000 but has recovered to 150,000.

A Tokyo metropolitan government official said, “We have seen a trend of people moving to city centers after the burst of the bubble economy. The three wards with many office buildings have also gone through redevelopment.”The official suggested the latest trend reflects more people opting to live close to their offices after the March 2011 earthquake and tsunami disrupted transportation systems and forced many to walk back home.

But the growing urban wards are not free from problems. The number of children who failed to secure slots in preschools in Minato Ward rose 2.5 times in April from a year earlier. A Minato Ward official said the municipal government is “overwhelmed with delight but a lack of enough childcare services has been the biggest challenge.”

Some elderly families have also been moving from detached houses in the suburbs to apartments in city centers as they are more convenient and well managed, the Tokyo metropolitan government official said. But with more senior citizens living alone or the elderly taking care of their even older parents, more social workers would be required to look after them. “It would be difficult for social workers to come to homes of the elderly in high-rise apartments that are automatically locked at their entrances. There would also be a need to assist people in such cases as elevators stop in disasters,” the official said.

While Tokyo continues to draw population, neighboring prefectures have seen serious population outflows of young people. Even in prefectural capitals of Maebashi in Gunma and Kofu in Yamanashi, populations have been declining. In the city of Shizuoka in central Japan, an estimated population as of April 1 fell below 700,000.

© KYODO

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Results of MLIT’s latest land price survey

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According to the Ministry of Land, Infrastructure, Transport and Tourism’s annual residential land survey (地価公示), titled 平成29年地価公示 (2017 Land price public announcement) residential land in Tokyo’s most central 23 wards increased by 3% in 2016, and in greater Tokyo area that averaged 0.7% increase. Chiyoda, Chuo and Minato wards all have prices increase by more than 5% in 2016 (see graphic above), while most of the 23 wards experienced growths of between 2 and 5 percent growth YoY. There is great disparity between what is happening in Tokyo (particularly within the 23 wards) and nationwide.

As we have written in the past, growth in condominium prices in central Tokyo have increased substantially over the last few years. However, given the high prices, the total number of transactions decreased last year. As the number of new condo sales has started to decrease, there is also less pressure among property developers to acquire and develop sites, which in turn keep land prices at bay. In terms of commercial real estate, the total for 23-Ward Tokyo increased by 5.5% (4.8% in 2015) and increased by 1.9% (1.8% in 2015) for the greater Tokyo area in 2016.

Visit the main site to download the statistics (in Japanese): http://tochi.mlit.go.jp/chika/kouji/2017/index.html, and here is the summary for Tokyo residential land: http://tochi.mlit.go.jp/chika/kouji/2017/46-1.html

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Average rents in 23-Ward Tokyo increased marginally YoY

According to the latest Kantei rental data, the average monthly rent was JPY3,307 per sq. meters in 23-Ward Tokyo, representing a month-on-month (MoM) drop of 1.4%, However it also represents an increase of  2.1% year-on-year (YoY). Kantei recorded an average apartment size of 55.94 sq. meters and average building age of 16.7 years.

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Tokyo 23-ward average rental cost continue to climb

Just a quick update on Tokyo’s rental market. Recently, Tokyo Kantei has released its data for rents for 2015. In 2015, the average monthly rent for an apartment in Tokyo’s 23 wards reached JPY 3,265 yen/square meter, which represents a year-on-year (YoY) increase of 2.5%. According to the Kantei press release, this is also the third consecutive year that rents have grown in “downtown” Tokyo.

The rise in rents can mainly be attributed to the real estate construction boom that has been happening in Tokyo — while one would think the gluttony of addition supply would dampen prices — contrary to this — newly-built, snazzy residences command a price premium when released into the market, thus costing a lot more to rent — which in turn, pushes up rental averages. According to Tokyo Kantei, in 2012, newly constructed apartments made up a mere 3% of the Tokyo 23-ward rental market, and this number has risen to almost 8% in 2015.

For the press release (in Japanese): http://www.kantei.ne.jp/release/PDFs/T2015.pdf

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Tokyo 23-Ward secondhand house prices continue to climb

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Source: Left & Center images: e-architect.co.uk; Right image: urdesign.it

Further to our article on the July data of second-hand home sales published back in August 2015, the average asking price of a detached, resale house in Tokyo’s 23 wards reached JPY107.51 million in December 2015, according to Tokyo Kantei. This was an increase of 3.2% compared to the November average (JPY104.2 million) and an increase of 6.8% compared with the October figure (JPY100.66 million). Back in the summer, we reported that the second-hand detached house within Tokyo’s 23 wards was JPY100.04 million for July 2015.

The survey covers wooden detached houses between 100 sq meters and 300 sq meters in size. In Tokyo’s 23 wards, the average land area for a detached, second-hand house on the market in December was 142.0 sq meters, while the constructed area was 132.5 sq meters, and the average age of was 22.5 years.

The Tokyo Kantei press release also notes that Minato, Shinagawa and Meguro wards in particular were top sellers with properties listing for over JPY100 million.

Click here for the press release: http://www.kantei.ne.jp/release/PDFs/kodatecyuko201512.pdf

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Flat 35 & 50 Mortgage Rates Lowered

According to Suumo, for the first time in two months, the Japan Housing Finance Agency (JHFA) has announced lower official January rates for its Flat 35 and Flat 50 home mortgage loans. Click here for the Suumo article (in Japanese): http://suumo.jp/journal/2016/01/05/103756/ The Flat 35 are fixed interest loans with terms of 35 years, which are offered by Japanese banks and securitized by the JHFA. Further to the Flat 35, the Flat 50 loans are for a loan term of between 36 and 50 years. See table below for summary.

90% or less financing % Change MoM Industry Average Above 90% financing % Change MoM Industry Average
Flat 35 1.540-2.090 -0.01 1.540 1.670-2.220 0.01 1.670
Flat 50 2.010-2.510 -0.05 2.260 2.140-2.640 -0.050 2.390
20 years and below 1.270-1.890 -0.05 1.270 1.270-1.400 -0.05 1.400
Source: January 5, 2016 announcement, Suumo News

Foreign residents do qualify for mortgages in Japan, provided certain criterias are met. Please come talk to Higherground’s property consultants if you are interested in purchasing a home in Japan with financing.

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Tokyo: Prices reach 23-year high for newly-built apartments, luxury types take the lead

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Photo by Tomohiro Ohsumi, Bloomberg

Hanabi (fireworks) is not the only thing going “boom” in Tokyo these days. Tokyo’s real estate market is also enjoying a boom of its own. According to a recent report published by the Real Estate Economic Institute, the average price of new apartments released for sale in 23-Ward Tokyo reached JPY79.84m, an increase of 27.9% year-on-year (YoY). The average price per square meter was JPY1,199,000, representing a YoY growth of 34.6%. An increase in the supply of higher-end condos and the rising construction costs are cited as key reasons for this price growth.

More interestingly, sales of luxury, high-end properties costing over JPY100m now represent over one fifth of the entire 23-ward market. While there were 2,020 units on the market in July for 23-ward Tokyo, of which 83.3% were sold (1,684 units), out of this, 417 units (22% of the total)  had cost over JPY100 million.

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Computer-generated image of Brillia Meguro

One key example of this rapid growth is the Brillia Towers Meguro development in the Meguro station area. A total of 603 units were sold in July, of which the average price tag was a whopping JPY111.47m. Apparently, there were an average of 3.4 offers for every unit released for sale, and as many as 43 offers for the popular ones, according to the report. Construction is slated to be completed in 2017, and so far 91% of the units have already been sold.

The average sales price of new apartments in the wider area — greater Tokyo — also grew but to a lesser extent. Greater Tokyo sales (which includes its suburban sprawl of Kanagawa, Chiba and Saitama Prefectures) grew 2.4% month-on-month (MoM) and 7.6%YoY with the average sales price hitting JPY59.53m. This is the highest sale price since May 1992, when prices had averaged JPY59.71m. The average price per square meter, which ran up to JPY850,000 in July for greater Tokyo, had increased by 2.5% MoM and 10.2% YoY. This is the highest per square meter price seen since November 1992.

Photo by Reuters

Photo by Reuters

In July, 4,785 new apartments in greater Tokyo were released for sale, an increase of 36.6% MoM and 13.3% YoY, and of which 83.7% were sold (4,003 apartments). Of all new apartments, 1,722 units on the market were in high-rise buildings (an increase of 12.3% YoY) and of which 92.3% were sold (buildings with 20 or more floors are categorized as high-rise buildings).

For more details, here is the actual report (Japanese only): https://www.fudousankeizai.co.jp/share/mansion/216/s201508.pdf

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Tokyo 23-Ward secondhand houses exceed JPY100m average

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Nobita's house (Doraemon)

According to the second-hand home sales report published by Tokyo Kantei, the average price of a second-hand detached house within Tokyo’s 23 wards was JPY100.04 million for the month of July, representing a 15.8% YoY (year-on-year) increase. Top sellers were Minato, Meguro and Shibuya wards. The criteria of properties under this survey are wooden, detached houses that are over 100sqm but under 300sqm in size, and are within 30 mins walking access of train routes or 20 mins access of bus routes.

The Sense House by Kazutoshi Imanaga

The Sense House by Kazutoshi Imanaga

To give an idea about the property, in Tokyo’s 23 wards, the average land area for a detached, second-hand house hovers around 145.3sqm with a constructed house size of 138.8sqm (July data, but not so different from previous months). The average age of the building was 22.5 years in July.

In comparison, in July, for the same type of property, in the Tokyo Metropolitan area (Tokyo-To), excluding the 23 wards, the average price reached JPY63.36 million (an increase of 9.9% YoY), while the average price for greater Tokyo (aka the suburbs) was only JPY35.71 million (representing a 3.1% YoY growth. Click here for the whole press release: http://www.kantei.ne.jp/release/PDFs/kodatecyuko201507.pdf (Japanese only).

Source: Homeesthetics.net

Source: Homeesthetics.net

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