The average unit price of a new condominium in Tokyo and its surrounding areas hit a record high of 63.6 million yen ($503,000) in fiscal 2021, more expensive than when Japan was at the height of its bubble economy three decades ago, a research institute said Monday.
Topping the previous all-time high of 62.14 million yen set in fiscal 1990, the average price in the capital and the three prefectures of Chiba, Kanagawa and Saitama in the year ending March rose 6.1 percent from a year earlier, according to the Real Estate Economic Institute.
The average unit price in Tokyo's 23 central wards, despite Japan facing years of lackluster economic growth, jumped 11.7 percent to 84.49 million yen, also the highest ever and exceeding 80 million yen for the first time since fiscal 1991.
The bullish market is supported by solid demand for luxury properties such as high-rise condos in central Tokyo and is due to rising labor and material costs.
The upward trend is expected to continue for some time, with an analyst of the institute noting that the yen's recent depreciation against major currencies will lead to higher import costs of building materials, in addition to increasing labor expenses stemming from a shortage of construction workers.
Luxury condos are popular among dual-earning couples with a combined household income of over 10 million yen a year, with many taking advantage of low-interest housing loans amid the Bank of Japan's monetary easing, it said.
The number of new condominiums listed for sale in the Tokyo region was up 13.2 percent from a year earlier at 32,872 units, eclipsing 30,000 for the first time since fiscal 2018.
Consumers are more consciously looking for comfortable living environments as they have teleworked and stayed home more since the outbreak of the coronavirus, the institute said.
The average unit price in Saitama rose 7.8 percent to 49.29 million yen.
But the price in Tokyo municipalities outside the 23 wards fell 5.1 percent to 51.37 million yen, while that in Kanagawa declined 5.5 percent to 52.09 million and Chiba was down 0.5 percent to 43.83 million yen.
Meanwhile, the average price in March grew 3.0 percent from a year ago to 65.18 million yen, up for the third consecutive month.