Rising Construction Costs and Declining Condominium Supply and Sales Volumes

「The nationwide condominium sales environment remains challenging, with new unit volumes continuing to trend downward, construction costs remaining elevated, and a shortage of land suitable for construction.」

「The nationwide condominium sales environment remains challenging, with new unit volumes continuing to trend downward, construction costs remaining elevated, and a shortage of land suitable for construction.」

「Real estate companies have taken a cautious approach to supply volumes, and total condominium sales volumes in the Tokyo metropolitan area in 2019 were expected to decline for the first time in 3 years, raising concern over weaker market conditions going forward.」

「In the condominium market, selling prices in central Tokyo, which had previously driven the market, have continued to trend upward because construction costs remain elevated. As a result, the number of households able to purchase, including affluent and high-income households, is becoming limited. With demand from ordinary households shrinking, total condominium sales volumes in the Tokyo metropolitan area in 2019 are expected to reach their lowest level in 27 years. In addition, the shortage of land suitable for condominium construction is contributing to a trend toward more properties with fewer units per building, raising concern over weaker market conditions going forward.」

「Sales have shown signs of weakening due to elevated construction costs. In addition, the shortage of land suitable for condominium construction is contributing to a trend toward more properties with fewer units per building, raising concern over weaker market conditions going forward.」

「Sales of condominiums in the Tokyo metropolitan area have shown signs of weakening due to elevated construction costs. In addition, the shortage of land suitable for condominium construction is contributing to a trend toward more properties with fewer units per building, raising concern over weaker market conditions going forward.」

「Elevated construction costs have affected large condominiums in the Tokyo metropolitan area, causing sales to show signs of weakening. Although advance sales of condominiums using the Tokyo Olympics athletes' village are scheduled to begin around early summer this year and a certain level of supply is expected to continue, the shortage of land suitable for condominium construction is contributing to a trend toward more properties with fewer units per building, making it difficult to expect a substantial increase in new sales volumes.」

「Sales of tower condominiums in central Tokyo had previously driven the market, but sales have shown signs of slowing as elevated construction costs, reflecting higher land and material prices and labor costs, have affected selling prices. Although a certain level of supply is expected to continue, including large-scale redevelopment projects planned on the former site of the Tokyo Olympics athletes' village, the shortage of land suitable for condominium construction is contributing to a trend toward more properties with fewer units per building, making it increasingly difficult to expect a substantial increase in new sales volumes.」

「The condominium market has been driven by strong sales of tower condominiums in central Tokyo. At the same time, construction costs driven by higher material and labor costs have remained elevated, and the number of newly supplied condominiums in suburban areas has been trending downward, indicating increasing market polarization. Although a certain level of supply is expected to continue in central Tokyo through redevelopment projects and other initiatives, land suitable for construction is also in strong demand from other industries, including hotels, making it increasingly difficult to expect a substantial increase in new sales volumes.」

「As construction costs driven by higher material and labor costs have remained elevated, the number of newly supplied condominiums in suburban areas has been trending downward, indicating increasing market polarization. Although a certain level of supply is expected to continue in central Tokyo, including condominium developments planned from 2020 onward on former Olympic-related sites, land suitable for construction is also in strong demand from other industries, including hotels, making it increasingly difficult to expect an increase in new sales volumes.」

「However, selling prices have risen as construction costs, including construction costs that remain elevated, have stayed high, making the deterioration in the supply-demand balance increasingly apparent. Even in central Tokyo, where sales at higher price points are possible, land suitable for construction is also in strong demand from other industries, including hotels, making it increasingly difficult to expect new sales volumes to remain at previous levels.」

「As selling prices have risen, the deterioration in the supply-demand balance has become apparent. Newly sold condominium units in the Tokyo metropolitan area fell 11.6% year on year in 2016, and concern remains over weaker new sales volumes going forward.」

「The condominium market had been driven mainly by central Tokyo, supported by factors such as lower mortgage rates. However, selling prices, pushed up by higher material and labor costs, have remained elevated, making the deterioration in the supply-demand balance increasingly apparent and raising concern over weaker sales volumes going forward.」

「Concern is growing over a deterioration in the supply-demand balance as selling prices continue to rise, and the downward trend in newly sold condominium units across the Tokyo metropolitan area is expected to continue for some time.」

「New supply and development are constrained in areas where it is difficult to pass higher construction costs through to selling prices, and the number of newly marketed condominiums across the Tokyo metropolitan area continues to decline.」