The dip is unlikely to affect the overall trajectory of rising values of new homes in the Japanese capital, which is being driven by factors including low supply and higher costs of raw materials and labour, analysts said.
“We should not see the temporary decrease as a peak,” said Tetsuya Kaneko, head of research at real estate company Savills Japan. “The general upward trend is here to stay, especially considering the overall inflationary trend and labour shortage.”
The number of new units for sale in the Tokyo metropolitan area fell 14.4% last year to a record low, according to the report released Thursday. Average prices of new condos in central Tokyo dropped 2.6% to JPY112 million.
The Bank of Japan is widely expected to raise interest rates Friday, but its impact on the real estate market is likely to be mild as a crowded banking industry keeps a lid on mortgage costs.
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“An interest rate increase would be seen as negative, but its magnitude is offset by the competition among banks,” said Mari Kumagai, head of Japan research at real estate brokerage Cushman & Wakefield.
