Rich buyers stifle Tokyo housing sales

posted on January 26, 2016

Rich buyers taking advantage of record low borrowing costs have pushed prices in Tokyo beyond the reach of many ordinary buyers, taking the wind out of property sales.

While the average sales price of an apartment in greater Tokyo rose 9.1 percent to a 24-year high of ¥55.2 million in 2015, offerings dropped by almost 10 percent, according to data by the Real Estate Economic Institute Co. Deals of properties with a price tag of ¥100 million or more climbed 86 percent, while those of cheaper homes under ¥50 million fell by 18 percent. The nation's biggest banks including Mitsubishi UFJ Financial Group Inc. lowered variable mortgage interest rates to a record low of 0.625 percent this month.

The decline in borrowing costs and the wealth effect from rising Japanese share prices under Prime Minister Shinzo Abe have favored wealthier Japanese more than ordinary households, who are finding Tokyo apartment costs increasingly prohibitive. Cheap debt may not be enough to sustain price gains this year as a stock rout damps sentiment, creating headwinds for property developers and mortgage lenders, according to analysts.

source by the-japan-news
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