Tokyo housing prices hit a new high since October 2007, with core area prices rising for 19 consecutive months

Due to the drastic fluctuations in the Japanese stock market, investors are inclined to seek more stable tangible assets. Coupled with the declining trend of residential buildings for sale in the market, Tokyo's housing prices have seen the largest increase in 17 years.

On September 24th, data released by the real estate survey company Tokyo KANTEI showed that the average selling price of second-hand residential buildings in the 23 wards of Tokyo in August 2024 increased by 2.6% month-on-month, reaching 77.5 million Japanese yen (approximately RMB 3.79 million), marking the highest increase since October 2007 when Japan's real estate market was experiencing the so-called "mini bubble."

In the six core areas of Tokyo (Chiyoda, Chuo, Minato, Shinjuku, Bunkyo, Shibuya), prices rose by 3.9% to around 128 million Japanese yen, marking the 19th consecutive month of increase, surpassing 100 million yen for the third consecutive month, the largest surge since December 2009 when the market began to recover from the Lehman crisis.

Takeshi Ide, senior chief researcher at Tokyo KANTEI, believes that "this is influenced by the drastic stock price fluctuations in August." The demand from overseas investors and the affluent class has further strengthened.

At the same time, the gradual decrease in the number of second-hand residential properties in circulation has also supported this trend. In the 23 wards of Tokyo, 2,519 new listings were added in August. As of August, a total of 12,252 properties were in circulation, a 19% decrease compared to the peak in February.

However, analysts have cautioned that "Tokyo's housing prices are expected to be significantly affected by the Bank of Japan's interest rate hike." In recent years, Tokyo's real estate market has been very active, benefiting from low interest rates, low supply, and an increase in affluent families, leading the real estate market to recover from the slump after the burst of the bubble.

Currently, the real estate market's response to Japan's interest rate hike in July does not seem particularly significant, but rather shows a certain resilience. Japanese brokerage firms have stated that currently, "no clients have stopped considering buying a house due to the rise in interest rates."

According to industry experts cited by Bloomberg, "after the Bank of Japan raises interest rates, residential real estate prices in Tokyo may remain stable, but some areas may experience a decline."

Takeshi Ide, senior chief researcher at Tokyo Kanto Real Estate Data and Consulting Company, cautioned:

"If interest rates continue to rise, people may become more cautious about purchasing rental properties."