Tokyo Residential Leasing Q1/2022

Recovery continues

Rents and occupancy rates have improved, and may be on the road to recovery.

  • This quarter, rents in the Tokyo 23 wards (23W) improved 0.7% QoQ to JPY3,992 per sq m, although they have still decreased 1.3% YoY.
  • Mid-market rents in the central five wards (C5W) have also increased 1.5% QoQ and 0.7% YoY to JPY4,784 per sq m.
  • The C5W premium has inched up 0.9 percentage points (ppts) QoQ to 19.8%, surpassing the premium seen before the pandemic.
  • Most wards have exhibited some recovery once again this quarter, with Edogawa posting the largest gain on a quarterly basis of 5.1%. On an annual basis, Toshima came on top, growing 4.9% 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 0.7ppts from the previous quarter to 96.8%. The C5W also saw a notable recovery of 0.6ppts to 96.2%.
  • Prices of for-sale condominium have reached record-highs in Greater Tokyo. Some people will be priced out and stay in the rental market.

Rents and occupancy rates have risen again over the past quarter, and the current spring season is likely to have contributed to this improvement. The lifting of restrictions on foreign nationals entering Japan and some decline in remote work should help further increase demand for housing in the 23W, especially the C5W. We will likely see more people move to Tokyo in 2022 than in 2021.

Savills Research & Consultancy
Map 1

GRAPH 1 | Mid-market Apartment Rental Index, Q3/2008 to Q1/2022