In September, Jones Lang LaSalle released their report titled “Tokyo Demographic Movement and Residential Market Report”.

Below are the highlights.

Demographic Movement in Tokyo (Page 2)

Looking at the population movement by nationality, the drop of foreigners seems to have dragged down the overall population growth while the Japanese population remained almost unchanged.

New Lifestyle Under Covid-19 (Pages 6 & 7)

The reasons for moving differed largely from before and after Covid-19...Out of the top five criteria, rooms size and layout have increased more than 10 percent, and the age of building has replaced environment, compared to 2019 and 2021, while distance from station remained within the top five [criteria important to renters when searching for a new property].

Considering there was no drastic increase of salaries under the current economic situation, those looking for larger size, younger building age and good layout without stretching the budget, had to move away from the city central.

Impact on the Property Market (Pages 9 & 11) 

The recent sluggish growth of population seems to have minimal impact on the property market.   

According to local leasing companies, the rental market was generally not affected much by the pandemic in central Tokyo.  A decrease in foreign population also did not affect the high end rental market.  

The compact apartments targeting single occupancy take a slightly longer time to find tenants than usual, yet not to the extent to lower rents.  This could be due to fewer students or freshers finding the necessity to move to central Tokyo due to remote lectures or remote work environments.

For the sales market, both new condominium and secondary markets have been active since the recovery from the first state of emergency in April and May 2020.  

As the domestic sales market is always dominated by locals, the decrease in foreign population did not impact it.  Instead, the locals, accelerated by low interest rates and a lifestyle change, pushed the demand for new and quality housing.

Further Reading

Tokyo Demographic Movement and Residential Market Report - JLL (September, 2021)