Tokyo average residential rents up 5.2% in Q1

It is the second consecutive quarter of rental growth.

According to a recent Savills report, sound rental growth in Tokyo continued for a second consecutive quarter among average mid-market units in the Tokyo 23 wards (23W) in Q1/2024, and Tokyo appears to have attained a new high. 

Average asking rents in the 23W increased by 4.1% QoQ and 5.2% YoY to JPY4,237 per sq metre.

Here’s more from Savills: 

Notably, the central five wards’ (C5W) premium over the 23W average has fallen moderately to 18.6%, which demonstrates the strength of broader growth in the 23W over the quarter. This may also imply price sensitivity of residents in each submarket. 

The city has been experiencing healthy demographic growth in the post-pandemic setting, with a total influx of almost 100,000 new residents to the 23W recorded in 2023. This trend has been driven in large part by increments in the foreign population, with foreign nationals comprising 55,000 of these new residents. 

Furthermore, over 7,000 foreign nationals moved to the 23W in Q1/2024, and this strong growth in demand has probably resulted in many affordable units being taken off the market. 

Looking ahead, a slurry of urban renewal projects taking place throughout the city should increase its appeal among potential residents, while higher rates of in-office participation should build on this momentum, and support further rental growth going forward in the Tokyo 23W market. Certainly, the market might experience some temporary corrections, especially after the recent strong growth.