Even after a ¥20 million price cut, no buyer has emerged for a condominium in Tokyo's 23 wards, as rising long-term interest rates affect the housing market. The minimum rate on long-term fixed-rate home loans reached a record high of 3.46%.
Persistently high long-term interest rates are affecting the housing market, with changes emerging in condominium sales conditions across Tokyo's 23 wards. Cases have been reported in which properties failed to attract buyers despite substantial price cuts.
A 9-year-old, 70-square-meter 2LDK condominium in Minato Ward was renovated and listed for ¥179.90 million in May this year, but inquiries were fewer than expected. After a ¥10 million price cut, it is now priced at ¥159.90 million.
Rising interest rates are cited as one factor behind the lack of buyers despite the price cut. As long-term interest rates rise, the minimum rate on the long-term fixed-rate Flat 35 home loan has reached a record high of 3.46%.
Experts say the key issue for the outlook is where the Bank of Japan's rate-hiking cycle will come to an end.