Japan House Price

In January 2017, Residential property prices registered an all time high growth of 4.7% YoY.

Published monthly by Ministry of Land, Infrastructure, Transport and Tourism, and Japan Real Estate Institute. Updated to the month of January 2017 (published on April 27th, 2017).

Recent data trend:

In January 2017, Residetial Property Price Index (RPPI) sharply rose by an all time high rate of 4.7% year on year (YoY). This came in as a surprise as the house prices in Japan had been falling consecutively for the past three months. It seemed as if the real estate boom has begun to wane.

In terms of a month-on-month (MoM) increase, the house prices in Japan recorded an all time high jump of 5.4%. 

By sub-sectors, both price indices for condominiums and for residential land recorded a rise of 5.2% YoY and 4.8% YoY, respectively. The index for condominium prices have risen by almost 30.2% since January 2017. 

By area, Tokyo recorded a 8.9% YoY rise in prices in January 2017. This marked the highest growth in house prices ever. Since early 2013, house prices in Tokyo have risen by around 28.5% .

The surprising rise in house prices in January may be a blip and one will have to closely monitor the price developments to conclude whether the prices have begun to recover.

For more details, please read our report "A primer on the new house price index"

Brief overview of “House Price”

In Japan, the annually-published Land Market Value survey (Ko-ji Chika) has been the representative statistics for real estate prices. For 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 statistics of land price and it does not include price information for condominium. It is also an annual survey, lacking in timeliness.   

The Japanese government developed a new statistics on house prices to fill the gap. The statistics, 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, 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, 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 Next Release Date: 

House Price by Regions 1 (Hokkaido, Tohoku, Kanto)  

House Price by Regions 2 (Hokuriku, Chubu, Kinki)  

House Price by Regions 3 (Chugoku, Shikoku, Kyushu-Okinawa)  

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