The average unit price of new condominiums in Tokyo and its vicinity in 2021 hit a record high of 62.60 million yen ($550,000), surpassing the previous high recorded in 1990 during an asset-inflated bubble, a research institute said Tuesday.
The price was up 2.9 percent from the previous year in the capital and three neighboring prefectures of Kanagawa, Chiba and Saitama, boosted by the increasing popularity of luxurious properties such as high-rise condos in downtown Tokyo, the Real Estate Economic Institute said.
The average unit price in the Tokyo area logged 61.23 million yen in 1990, according to the institute.
"A continuous rise in construction costs since Japan started preparing for the (Tokyo) Olympics in 2013, as well as a shortage of labor in the construction industry, have been pushing up unit prices in recent years," an official at the institute said, adding it is unlikely for the average price to start falling any time soon.
By area, the average unit price was up 7.5 percent in Tokyo's 23 wards and up 5.2 percent in Saitama Prefecture. However, in Kanagawa and Chiba, the average price dropped 3.1 percent and 1.4 percent, respectively, the institute said.
Meanwhile, the number of new condominiums listed for sale in the capital and its vicinity in 2021 rose 23.5 percent from a year earlier to 33,636 units on the growing demand for larger rooms, as more people telework and stay home amid the pandemic, the institute said.
Housing prices have been increasing in many countries as low interest rates set by their central banks to support the economies battered by the coronavirus pandemic push up demand for new homes, according to a report by the International Monetary Fund.
While U.S. and European central banks are moving toward policy normalization to deal with inflation, the Bank of Japan said last week it will maintain its easy monetary policy as the 2 percent inflation target remains far out of reach.