Savills

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Tokyo Residential Leasing Q4/2021

Market sees recovery amidst mixed signals

Rents and occupancy rates have improved, while Tokyo continues to see its population decline modestly.

  • This quarter, rents in the Tokyo 23 wards (23W) improved 0.9% QoQ to JPY3,963 per sq m, although they have still decreased 0.9% YoY.
  • Likewise, mid-market rents in the central five wards (C5W) have also increased 1.1% QoQ to JPY4,713 per sq m, but faced an annual decline of 1.4% YoY.
  • The C5W premium has inched up 0.3 percentage points (ppts) QoQ to 18.2%, although the premium is still lower than that of pre-pandemic times.
  • Most wards have posted some recovery this quarter, with Shinjuku posting the largest gain on a quarterly basis of 3.0%. On an annual basis, Arakawa came on top, growing at 4.4% YoY.
  • In the C5W, average rents for all unit sizes have seen some rental increments this quarter.
  • The average occupancy rate in the 23W increased 0.3ppts from the previous quarter to 96.1%. The C5W saw an even larger recovery of 0.7ppts to 95.6%.
  • The population decline of the 23W has continued into Q4/2021. In comparison, major regional cities Osaka, Nagoya, and Fukuoka have not seen population changes as noticeable as the 23W.

Tokyo’s rents and occupancy rates have increased over the past quarter, which may imply an inflection point. However, when compared to major regional cities, Tokyo has seen lower rents and occupancy than pre-pandemic times, and a more noticeable population decline. The implications of new variants may further affect future housing demand in Tokyo.

Savills Research & Consultancy
Map 1

GRAPH 1 | Mid-market Apartment Rental Index, Q3/2008 to Q4/2021