The average price of an existing apartment price in Tokyo increased by 6.1% in 2020, up from the previous year’s rise of 3.9%.

However, the average price of new-build properties in Tokyo rose only slightly by 1% during 2020, but this was an improvement from the prior year’s 3.4% decline.

Sales of existing apartments in Tokyo fell by 5.9% to 36,048 units in 2020 from a year earlier, according to The Land Institute of Japan, while sales of existing detached houses in Tokyo rose by 3.7% y-o-y to 19,743 units over the same period. 

During 2020, construction starts in Japan fell by 10% to 814,765 units from the previous year, following a 4% decline in 2019. However, despite the reduction in supply and rising property prices, rental yields are still very low in the city at 2.7%. This is because the average price of an apartment in Tokyo is high at $16,300sqm.

The Japanese economy contracted by 5.3% in 2020, the biggest contraction since 2009. But even before the pandemic, the Japanese economy had been adversely affected by the US-China trade tensions and the introduction of a consumption tax hike from 8% to 10% in 2019.