Tokyo central used condo prices fall for fourth straight month

The Tokyo used condominium market is experiencing a shift as listing prices in the six central wards fell for the fourth consecutive month. According to data from Tokyo Kantei, the average listing price for a 70-square-meter unit in these districts reached 180.68 million yen in August.

Several economic factors are contributing to this cooling trend. The Bank of Japan's recent interest rate hike to 1.25% has increased borrowing costs, shifting buyer focus from maximum loan capacity to long-term repayment sustainability. Additionally, while the yen remains weak, the high yield of U.S. Treasuries makes the relatively low yields of Tokyo rental properties less attractive to international investors.

Market analysts also note a growing gap between property prices and household incomes. In central Tokyo, prices have reached levels that exceed the typical purchasing power of high-income dual-earner couples, often requiring a mortgage multiple significantly higher than the recommended seven times annual household income. This has led to a polarization in the market, where buyers are increasingly looking toward outer metropolitan areas for better cost-performance relative to commute times.