Apartment price growth rates in Tokyo and Osaka ranked first in the world in April, according to a private survey.
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According to the April survey of the "International Real Estate Price and Rent Index" released by the Japan Real Estate Institute (located in Minato, Tokyo) on the 30th, the rate of increase in apartment prices in Tokyo and Osaka compared to the previous survey (October 2023) was 1.5% each, ranking first among the 15 major cities worldwide. This marks the first time since the start of the survey 10 years ago that both cities have simultaneously ranked first. The influx of overseas funds due to international undervaluation and a weak yen, as well as purchases by wealthy individuals in Japan, where stock prices are historically high, have contributed to this trend.
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The survey is conducted twice a year, in April and October. It calculates indices such as the new purchase price per square meter of apartments in the major 15 cities in Asia and various countries and regions including the United States, the United Kingdom, and Australia.
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In April, the price level in Tokyo (October 2020 = 100) reached 107.3, marking the fifth consecutive increase compared to the previous survey six months ago. Both the price level and the increase rate of 1.5% were the highest on record. In April, the price level in Osaka stood at 116.6, also marking the fifth consecutive increase. Although the increase rate decreased from the previous survey (2.7%), it remained high.
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On the other hand, among the 15 major cities worldwide, Hong Kong experienced the largest decline in condominium prices, with a decrease rate of 2.0%. This marked the second consecutive negative trend. Despite implementing housing tax incentives in February, the real estate market continued to stagnate, reflecting the ongoing sluggishness.
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The rise in condominium prices in Tokyo and Osaka is largely attributed to the relative affordability of real estate in Japan. In this survey, if the unit price per tsubo (3.3 square meters) of a condominium in Azabu, Minato-ku, Tokyo is set at 100 (based on yen conversion), Osaka is at 68.2. This is less than half compared to Hong Kong, which has the highest price among the 15 major cities worldwide at 268.2. Among other major cities, London followed at 207.5, Taipei and Shanghai at 165.6 each, New York at 144.6, and Singapore at 140.2.
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The depreciation of the yen and inbound (foreign visitors to Japan) demand are also contributing factors, leading to an increase in condominium investments from overseas. In Japan, amidst the Nikkei Stock Average reaching an all-time high in March, interest rates remain low despite the removal of the negative interest rate policy, and purchases by affluent individuals continue to be robust.
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Real estate economist Kaoru Yoshino of the Japan Real Estate Institute says, "There are purchases driven not only by investment purposes but also by actual demand. We do not see the surge in condominium prices as a bubble-like phenomenon."
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