Published monthly by Ministry of Land, Infrastructure, Transport and Tourism, and Japan Real Estate Institute. Updated to the month of October 2016 (published on February 1st, 2017).
Recent data trend:
Residential property price index rose by 3.6% year on year (YoY) in October, an acceleration from 1.4% in September. On the national level, disparity between condominium prices and land prices are continuing. The condominium price index has risen by 30% in the 4 years, the residential land price index has essentially remained flat in the same period.
In the Tokyo area, there are some signs that residential land prices may be starting to catch up. In 2016, residential land prices in Tokyo seem to be gaining an upward momentum. As of October 2016, the residential land price index is up by 6.7% year on year. However, outside Tokyo, land prices are continuing to flat-line.
By area, the residential property price boom seems to be ending in Tohoku area. Between 2011 and 2015, condominium prices in Tohoku have risen by as much as 80%, reflecting the shortage of residential property in the aftermath of the Great East Japan Earthquake. However, since 2015, the price movement indicates that the demand seems to have been satisfied and prices have stabilized.
In the south of Japan, residential property prices in Chubu and Shikoku are being left out of the positive run in the last few years. Residential property indices in those two areas are mostly flat or even declining somewhat in the last 4 years. Other areas saw gains of 5-10% over the course of last 4 years.
In our view, the residential property market seems vulnerable, dependent upon super-low interest rate and stable economic environment.
In Japan, the annually-published Land Market Value survey (Ko-ji Chika) has been the representative statistics for real estate prices. In 2013, it surveyed the prices of 26,000 land locations in Japan. However, the statistics suffers a number of shortcomings. The “price” in this survey is an evaluated price, rather than the actual transaction price. It is also a statistic of land price and it does not include price information for condominium. It is also an annual survey, lacking in timeliness. For more information, visit the official government page.
The Japanese government developed a new statistic on house prices to fill the gap. The statistic, officially known as “Residential Property Price Index (RPPI)”, is published monthly and it is based on actual transaction data. In order to capture the trend in the market value of houses, the raw data are processed through Hedonic regression to control for the difference in factors such as location. The compiled statistics starting in April 2008 were initially released in August 2012 and currently in a full operational phase starting from March 2015. The RPPI consists of 3 sub-indices, one price index for residential land, the second price index for detached house, and third price index for condominiums. National as well as a number of regional indices are available. In the last 5 years, RPPI has fallen sharply through 2008-09 but started improving after 2013. On the other hand, one of its sub-components, the price index for condominiums, started to rebound as early in late 2009 and the index is currently renewing the highest level since the index started in 2008. For more information, visit the official government page.
The Japan Real Estate Institute “JREI” calculates and publishes the JREI Home Price Indices. They are existing condominium price indices derived from repeat-sales for the Capital region of Japan since June 1993. The Japan Real Estate overtook the publication of the indices in January 2015 from the Tokyo Stock Exchange. For more information, visit the official government page.
For more details, please read our report "A primer on the new house price index"
The Next Release Date: Fourth week of February 2017.
House Price by Regions 1 (Hokkaido, Tohoku, Kanto)
House Price by Regions 2 (Hokuriku, Chubu, Kinki)