Tokyo used condo prices fall after 28 months as declines in central wards spread
Mortgage costs are climbing as the Bank of Japan raises interest rates and signals its willingness to tighten credit further, damping demand.
Used condominium prices in Tokyo dropped for the first time in over two years in August, according to research. The average price declined 0.2% to ¥112.74 million ($714,000) from the prior month, marking the first decline in 28 months, as reported by Tokyo Kantei in a recent study. The market weakness is spreading to other areas of the city, with falling prices in central wards indicating declining demand from homebuyers.
Mortgage rates are rising due to the Bank of Japan's interest rate hikes and potential further tightening of credit, which is dampening condo purchases. The Financial Services Agency plans to tighten its monitoring of real estate lending, concerned that property prices have become overinflated in Tokyo, fueled by domestic and foreign investors seeking capital gains.
Senior researcher Masayuki Takahashi predicts price adjustments will persist into late 2023, not only in central Tokyo but also in surrounding regions. The average prices in the six central wards fell 0.7% from the previous month, marking the fourth straight month of declines, with prices calculated for 70 square meter units.
Written by urgent.news from Japan Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
