Buyer behaviour in Tokyo turned out to be a less sensational and more grounded reality in 2020
As news of increasing migration to regional areas due to remote working arrangements become prevalent, new data reveals that buyers did not flee Tokyo for remote locations in 2020, reported Japan Property Central.
According to sales data by REINs and the Real Estate Economic Institute, buying behaviour does not appear to have shifted in Tokyo.
Apartment buyers in the Tokyo area and surrounding districts place a high preference on proximity to the nearest train station. Properties that are over a 10-minute walk are considered relatively ‘far’.
Back in 2010, 63.1 percent of all second-hand apartments sold across greater Tokyo (Tokyo, Kanagawa, Saitama, and Chiba Prefectures) were within a 10-minute walk of the closest train station, and 26.3 percent were an 11 to 20-minute walk. Apartments that required taking a bus to get to the train station contributed 9.6 percent to the total transactions.
Fast-forward to 2020 and the arrival of the pandemic, 67.2 percent of all second-hand apartments sold were within a 10-minute walk from the station, while 24.3 percent were an 11 to 20-minute walk away. The bus-to-train properties accounted for 7.3 percent of transactions.
This shows that proximity to the nearest train station in 2020 was more important than it was a decade ago.
Moreover, property investors also do not appear to be buying apartments much further outside of the city centre.
For a second-hand apartment sold in 2020, the average distance in kilometres from Tokyo Station was 22.6, while in 2010, the average distance was 24.4 kilometres.
There has also been an increasing trend towards investing in larger apartments due to work-from-home arrangements. However, this doesn’t necessarily apply to Tokyo, as apartments in Tokyo and around Japan tend to be small.
The standard size of a three-bedroom apartment is around 70 square metres.
Apartments in Japan are typically priced per square metre, making every extra inch count. Developers are reluctant to build larger apartments as higher construction costs mean higher prices for buyers. This particularly might not match with the demand in suburban areas that lack the luxury buyer segment.
To make up for insufficient space, developers have been exploring various layouts such as converting closets into tiny studies or creating co-working spaces in the communal areas.
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