April 30,2014,18.30 JST

Residential price index shows cooler climate for housing market

Contrary to anecdotal impression we receive from the media, Residential Property Price Index indicates that there is no less in the housing market. Prices for condominium are still maintaining an upward trend, but the land/detached house price is falling.

Residential Property Price index (RPPI) fell by 2.2% YoY in January 2014. Among sub-sectors, condominium price maintained YoY rise of +4.9%, but the rate was significantly down from +9.1% YoY in December 2013. Land/detached house price fell -3.9% YoY in January, down from -2.3% YoY in December.

We expect that this downward trend in housing price may continue for a while as consumption tax rate hike in April would dampen the consumer demand for housing. The gap between the condominium price trend and the land/detached house price trend may widen because the continuous shortage of construction workers would lead to further rise of construction cost and constrain the supply of condominium.

For full details on Residential Property Price Index, please see our indicator page here.