With most of the venues for the 2020 Tokyo Olympics located at the Tokyo Bay waterfront, many real estate developers have capitalized on infrastructure developments within the area to boost their sales. Many real estate firms can feel the so-called Olympic effect with confirmed contracts increasing to up to 300% for the period of January to August last year.
Sumitomo Realty & Development recently began selling 1,400 units for their waterfront condo tower and President Kojun Nishima noted that, “Anticipation for higher selling prices is driving demand.” From 2012, condo prices in the Chuo, Minato and Koto wards in Tokyo have increased by 9 percent last year. Real estate consulting firm Totalbrain said that current prices in the area average at ¥55.75 million (about US$542,000) from the period of January until September. Despite the average being 10 percent higher than the usual condo prices in most parts of Tokyo, condominium units in waterfront towers remain very popular.
While the average buyer of waterfront condos earns around ¥10 million ($97,000) a year, those in the suburbs only earn around ¥6 million ($58,000). This has led real estate developers to maintain prices in the suburban area. With prices in the waterfront condos relatively higher, many have expressed concern on oversupply. Around 15,000 new units will be sold soon in the waterfront area alone, which is more than a quarter of the total condominiums available in other parts of Tokyo. The president of a major property developer advised caution, saying, “Demand will likely taper off after the Olympics.” Haseko President Noriaki Tsuji echoed the same sentiment, “The number of households will start declining from around 2020 in the greater Tokyo region, making it more difficult (for property developers) to build new condo buildings.”