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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