Housing starts have been growing y-o-y for the third consecutive month in 2016 after having recovered in 2015 from the stagnation following the consumption tax rate hike in April 2014 (Chart-3).
The number of new condominium units sold in the Tokyo metropolitan area shrank significantly in the first quarter to figures as small as those in 2009 just after the global financial crisis (Chart-4), and the fiscal year number for 2015 declined by 14.4% y-o-y. On the other hand, both average unit price and average price per tsubo appreciated y-o-y for the fourth consecutive fiscal year, led by luxury units in the center of Tokyo.
While new condominiums have been no longer affordable for most ordinary people, secondary condominiums have become increasingly popular. According to Real Estate Information Network Systems, the transaction volume in the secondary condominium market in the Tokyo metropolitan area increased by 3.4% y-o-y to 9,784 units in the first quarter, and the average price per square meter appreciated by 5.5% y-o-y to 477.8 k JPY (Chart-5).
Construction costs have still remained high, despite having peaked out in the first half of 2015 (Chart-6). Although the prices for secondary condominiums should not be directly affected by construction costs, they have still appreciated significantly and are no longer considered reasonable.