Deutsche Tageszeitung - Central Tokyo Apartment Rents Forecast to Rise 11% by 2030

Apartment rents in central Tokyo are projected to climb 11 percent over the next five years, according to a forecast released by a property survey organization established by Mitsubishi UFJ Trust and Banking Corp. The increase is attributed to growing demand for rental housing as prospective buyers face soaring condominium prices.

The organization based its projection on demographic trends, historical rent data, and surveys regarding construction costs. Specifically, it estimates that the average monthly rent for a 25-square-meter apartment in Tokyo’s 23 wards will rise from 119,000 yen ($752) in 2025 to 132,000 yen by 2030.

According to the MUFJ organization, rents in Tokyo are currently rising at a slower pace than condominium prices. This disparity has led more residents to view rental properties as offering better value compared to purchasing real estate. Consequently, individuals seeking to live in the heart of the capital are increasingly opting for rentals instead of buying condominiums.

Real estate investors are also targeting rental housing, anticipating further expansion of the market. However, Yoshikazu Funakubo, a senior researcher at the MUFG institute, cautioned that rent growth has not yet kept pace with sharp increases in overall costs, including construction expenses and higher interest rates.

Funakubo warned that developers and investors may become more hesitant to undertake new development projects or renovate existing properties. He added that the gap between areas where residents can afford higher rents and those where they cannot may widen, potentially affecting both the quantity and quality of apartment housing available in the region.

(O.Tatarinov--DTZ)