High-rise condominiums are popping up along the Tokyo Bay waterfront, a stone’s throw away from venues for the 2020 Olympic Games and what property developers promote as prime seats for the international sporting event.
Since Tokyo won the bid to host the Games, real estate developers have been riding high on the so-called “Olympic effect” that is driving demand for properties on the bayfront.
Real estate consulting firm Totalbrain said the average price of high-rise waterfront condos in the central Tokyo wards of Chuo, Minato and Koto rose to 55.75 million yen ($539,883) during the period January–September 2013, up 9% from 2012 and more than 10% higher than the average condo price for the greater Tokyo region.
But even at higher prices, waterfront condos in Tokyo are selling like hotcakes. According to The Nikkei, the ratio of sales to units available is nearly 90% for waterfront condos, 9 percentage points higher than that of the greater Tokyo region. Ongoing transportation and commercial projects in the area are expected to further boost demand. More than 15,000 waterfront units are set to hit the market—more than one-fourth of all condos to be available in the greater Tokyo region.
Mitsubishi Estate, which owns a condo tower in the bayfront Harumi district, saw a 300% increase in the number of confirmed contracts in September, compared with the average from January to August.
Sumitomo Realty & Development recently started selling 1,400 units for its new waterfront condo tower. “Anticipation for higher selling prices is driving demand,” the company’s President Kojun Nishima said.
The average buyer of waterfront condos earns more than 10 million yen a year, compared the average income of condo buyers in the suburbs, who earn an average of 6 million yen.
However, there are concerns that demand will suddenly drop after the Games, leading to an oversupply. “Demand will likely taper off after the Olympics,” said the president of a major property developer.
By Maesie Bertumen
Image: “Dawn over Tokyo Bay” by Richard Fahey/Flickr