Since 2020, COVID-19 has had a significant impact on the real estate market. This article analyzes the trends in transaction volumes and prices in the Greater Tokyo used condominium market, as well as the factors driving fluctuations in used condominium prices during the pandemic.
How Did Used Condominium Prices Trend Up to 2019?
After the 2008 Lehman Shock, condominium prices continued to decline. The price of used condominiums in the Greater Tokyo area (per 70 m² equivalent) fell from approximately 29.65 million yen in 2010 to about 27.91 million yen in 2013. However, prices turned upward from 2015, recovering to approximately 37.09 million yen by 2019. For investors, the environment continued to make selling relatively easy.
How Did the Condominium Market Change During the Pandemic?
Direct Impact on Transaction Volume and Prices
In the spring of 2020, due to the impact of the state of emergency declaration, the number of used condominium transactions in the Greater Tokyo area fell by approximately 50% year-on-year, and contract prices also declined by 5.8% for the first time in 15 months.
Impact of the Tokyo Olympics Postponement and Cancellation Risk on the Market
2020 was originally scheduled to be the year the Tokyo Olympics were held, but the event was postponed to 2021 due to COVID-19. Had the Games been cancelled, there were concerns about economic deterioration from the loss of economic impact, leading to a further decline in condominium prices.
Changing Values Driven by the Spread of Remote Work
As remote work became more established, the advantage of urban properties offering proximity between home and workplace began to erode. A new market shift emerged toward demand for spacious properties in suburban and regional areas.
What Are the Risks of the Strategy of Waiting for Prices to Fall?
While waiting for prices to fall, there is also the risk of rising interest rates. If the low-interest-rate environment changes as the economy recovers, total repayment amounts could increase even if property prices decline. There is also the risk that quality properties will be sold to others first.
While the Bank of Japan's monetary easing continues, a sudden rise in interest rates is unlikely, but caution is needed regarding the timing of policy shifts.
For the latest trends in the condominium market, please also refer to Latest Trends in the Greater Tokyo Used Condominium Market (March 2025 Edition).
Related Reading
- [March 2025] Latest Trends in the Greater Tokyo Used Condominium Market | Background and Outlook for the +31% Increase in Transactions
- Do "Off-Market Properties" Really Exist? An Expert Thoroughly Explains the Mechanics of Real Estate Information
- Real Estate Exit Strategies in an Era of Inflation and Rising Construction Costs | Should You Sell or Hold?
Frequently Asked Questions (FAQ)
Q1. By how much did used condominium prices fall during the 2020 pandemic?
In the Greater Tokyo area, transaction volume fell by approximately 50% in the spring of 2020, and contract prices also declined by 5.8%. However, signs of recovery were also seen in the second half of the same year.
Q2. Did the spread of remote work lower the value of urban condominiums?
Demand temporarily shifted toward the suburbs, but from 2021 onward a return-to-urban movement was also observed. In the long term, the value of properties offering proximity between home and workplace has remained resilient.
Q3. When buying a used condominium, should I wait for the market to fall?
It is necessary to consider interest rate trends and the individual conditions of the property. Make your decision while also keeping in mind the risks of rising interest rates and properties being sold while you wait for the market to fall.
Q4. When is the right time to invest in used condominiums?
Rather than a macro market view, the profitability, location, and repair condition of the individual property are more important. Rather than a market-wide timing, the right time to buy can be said to be when you encounter a property that meets your own investment criteria.
