Quarterly Report for Premium Condominiums in Tokyo | 3Q FY 2024

【Chart 1】

This graph shows an index of changes in average contract price per tsubo (*Notes: 1. Indexation using average contract price per tsubo in 1Q / FY 2006 as 100. 2. Tsubo is a Japanese traditional unit of area equal to approx. 3.31sqm.) and the number of contracts concluded every quarter for premium condo. units in 7 prestigious areas of central Tokyo.

 Major economic events and Nikkei Stock Average are also shown for reference. The bar graph represents the number of contracts concluded each quarter. The red-line shows a movement in the index of average contract price per tsubo, while the gray-line shows one in the Nikkei stock average.

  In the third quarter reviewed here (2024:3Q), the index of average contract price per tsubo for premium condominium units sold overall (above) rose by +13.2 points QoQ to 266.7, setting a new record since the beginning of data collection for the sixth consecutive quarter.
  The number of contracts increased by 25 this quarter to 173, which is a recovery from the sharp decrease last quarter.

【Chart 2】

  The chart above shows the trend in the average contract price per tsubo by area. There were increases in all six areas other than the “Azabu / Akasaka / Roppongi Area,” “Aoyama / Shibuya Area,” and “Hiro-o / Daikanyama / Ebisu Area” where the average contract price decreased this quarter. Each of the six areas reached record historical highs since the beginning of data collection.
  Especially in the cases of the “Ichigaya / Yotsuya Area,” and the “Shirogane Takanawa / Azabujuban Area,” this was the fifth and sixth consecutive times to hit record highs, respectively.

【Chart 3】

  The chart above shows the percentage of purchases by overseas residents among Mitsui Fudosan Realty Group transactions and their average contract prices per tsubo (JPY and USD) compared to the exchange rates.

  The percentage of purchases by overseas residents rose by +5.7 points QoQ in this quarter, to 11.8%. The average price per tsubo this quarter (converted to USD) was up by $2,317 QoQ to $75,566. For the second consecutive quarter, this is the highest US dollar price per tsubo since the beginning of data collection.

  The number of contracts rebounded from a sharp decrease last quarter to increase this quarter, and the average price per tsubo set a new record high for the sixth consecutive quarter. The listings for sale in all nine areas combined as of the end of this quarter was 561, up QoQ for the second consecutive quarter, by +7%. It will be worthwhile to note how this trend will affect the number of contracts and the average price per tsubo in the ensuing quarters. It will be prudent to keep a close watch on the market impact of large-scale developments planned for completion soon along with trends in the Nikkei Average, exchange rates, the global situation, and inbound demand in the coming quarters.