Analysis Room: Secondary Apartments in Greater Tokyo Area See First Drop in 73 Months - But Central Tokyo Still Up 2.0%A · FULL TRANSLATION

Conclusion: The secondary apartment market in Greater Tokyo Area saw an average transaction price of ¥807,800 yen per square meter drop by 3.9% year-over-year in May 2026, marking the first decline since April 2020 after 73 consecutive months of increases and returning to levels last seen in November 1990. However, this decline is mainly due to changes in transaction composition—central Tokyo’s volume decreased by 17.9% for five consecutive months, while outer areas are absorbing more transactions, pulling down the average price. The individual market trends have not deteriorated: central Tokyo's own transaction price per square meter remains at ¥1,312,400 yen and has increased for 73 consecutive months year-over-year.

Breaking it down further, the 'average transaction price per square meter' reflects actual transactions, while 'inventory price per square meter' and 'new listing price per square meter' are seller prices in the market. The average transaction price per square meter fell by 3.9% to ¥807,800 yen, while inventory prices increased by 28.8% year-over-year and new listings by 22.3%. There is a significant gap of over 30% between asking prices and actual transactions, and this gap has been widening—sellers are sticking to high asking prices, while buyers are only purchasing in areas they can afford.

Regional breakdown shows that the transaction volume for May was 3,709 units, down 3.4% year-over-year, with central Tokyo’s volume decreasing by 17.9% over five consecutive months, accounting for the main factor in lowering the overall average price. In contrast, outer areas such as Chiba (up 19.9%), other Kanagawa regions (up 14.2%), Saitama (up 6.3%), Yokohama and Kawasaki (up 6%) are witnessing higher volumes due to their lower prices. As the proportion of high-priced central transactions decreases, and low-priced outer area transactions increase, the weighted average naturally falls, even though every region’s price remains increasing year-over-year.

The reasons for this are twofold: one is that rising prices have pushed buyers in central Tokyo towards a ceiling; with interest rates on the rise, fewer people can afford to buy centrally, driving demand outwards. The second reason is seller behavior—inventory numbers increased by 3.4% year-over-year and for three consecutive months, sellers are listing more properties at higher prices, but transaction prices have already started weakening. This month’s data shows that the average transaction price per square meter has decreased to ¥50,670,000 yen, while inventory prices remain high, indicating no panic selling from sellers as long as central Tokyo remains scarce.

Zooming in on 'price,' the gap is even clearer. The average transaction price dropped by 4.6% year-over-year to ¥50,670,000 yen in May, marking the first decrease since October 2024; however, inventory prices were still up by 30.3% and new listing prices by 22.1%. There is a gap of nearly ¥157,600 yen or about 30%, which has been widening for several months. The market is now in a stalemate where sellers are sticking to their high asking prices, while buyers are only purchasing in areas they can afford due to rising interest rates and higher total costs.

It’s important to clarify the opposing views: first, this is monthly data with significant month-to-month fluctuations; the 6.0% drop from May to April included seasonal and volume structure factors, so it cannot be seen as a trend yet. Secondly, while central Tokyo prices are still up by 2.0%, inventory and listing prices remain high, indicating no panic selling. As long as central supply remains scarce, core areas have a floor support.

The path forward has three possibilities: one is 'structural continuity with core support'; the other is 'reducing price gaps,' and the third is 'core reversal.'