Tokyo rental condo proﬁtability sinks to new low
Nikkei Asian Review
01 November 2016
TOKYO -- Recouping investment in a Tokyo-area rental condominium takes
the longest since condo profitability surveys began in 2002, according
to new figures compiled by real estate research company Tokyo Kantei.
The 2016 condo price-earnings ratio comes to 28.66. The ratio is
essentially a calculation of how many years rent would need to be
collected at the current rate to cover the cost of purchasing a condo
in the same area.
Lease rates are not rising as fast as condo prices. The price of a
70-sq.-meter condo averages 59.98 million yen ($571,000), up 10.3% on
the year. But the average rent for a similarly sized unit has gone up
5.3% to 175,551 yen a month.
Condos are considered expensive when the ratio exceeds 20, since their
yield is less than 5%. Nine sites had ratios below 20 in the new survey.
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