The Tokyo property market has been booming in the recent years but it is much more so with the Luxury Apartment market. With the real estate market favouring wealthy buyers and overseas investors, developers are now competing to out-do each other in building high-end residential projects in Tokyo.
The Sales War among Luxury Apartment Developers
As real estate sales are mostly sluggish in suburban areas, the focus has drifted to the luxury apartment sector in Tokyo. According to the most recent property news in Japan Property Central, top developers are now battling for property investment for high-end residential projects. With this sector booming in the Japan property market, developers are now trying to out-do each other in building apartments that target high-end customers.
Most of the competition among real estate developers are taking place in Minato District, a special ward in central Tokyo, that is most known for its glittering sky scrapers, crowds of rich Japanese residents and shining clubs. Tokyo’s Minato is considered as one of the two wards, the other being Chiyoda, as being populated by the richest neighbourhoods. With the floating shopping complexes of Odaiba Island and the famous entertainment district of Roppongi, Japan house prices in this district are typically very expensive and thus, incredibly attractive to real estate developers. Other wards that are popular areas to build expensive Tokyo property are Shibuya, Setagaya, Chiyoda and Shinjuku.
Minato District, Tokyo
The Japan Property Market that Favours the Wealthy
According to Nippon Trading, Japan house prices have climbed up to the point that many ordinary buyers cannot afford. This was particularly due to wealthy real estate buyers taking advantage of record low borrowing costs. But while property prices shot up, sales have gone down in the Japan property market. This is also because of the stagnating base wages of the Japanese. With building costs and land prices rising, developers are focusing less on suburban residential developments and instead focusing on luxury apartments for the wealthy where it is more profitable. Deals of Tokyo property over 100 million yen have even climbed to 86 percent at the earlier part of this year.
Luxury Apartments Marketed to Overseas Investors
According to property news outlet Nikkei, the Japan property market is also now focusing on attracting overseas property investment. They are stepping up with their marketing of luxury apartments and condominiums to rich foreign buyers. Due to the weakening yen, Tokyo property is comparatively cheaper than most real estate properties in major Asias cities. Thus, international investors have started buying buildings in the city, most especially with the expectation of further price increase due to the Summer Olympic Games in Tokyo. These foreign investors purchase condominiums and apartments in order to rent it out later or make a future sale.
Japan’s luxury apartment sub-market is expected to remain stable. Even with a general decline in sales for brand new high-end Tokyo property, developers are continually seeking for more prime locations where there is more demand for luxury apartments. But either way, Tokyo will still remain as one of Asia’s most profitable cities for overseas property investment. Interested in more updates in Tokyo’s real estate market? Follow us on Facebookfor more updates or send us any business enquiry in our Contact Us page.