Tokyo Q2 residential occupancy rates fall to 96.2%

Occupancy rates in Central also fell to 96.1% during the quarter.

In a recent report, Savills said residential occupancy rates in the Tokyo 23W loosened moderately by 1.0ppts QoQ to 96.2% in Q2/2024, while decreasing by 0.4ppts on a yearly basis. 

Similarly, the occupancy rates in the C5W (Central Five Wards) submarket loosened by 0.8ppts QoQ to 96.1%, likewise translating to an annual decline of 0.2ppts. That said, these downticks in occupancy appear in line with the past annual cycle. 

Here’s more from Savills:

The Tokyo 23W market saw a net influx of over 65,000 new residents between March and May 2024, a notably larger figure than the previous year. Indeed, living closer to central areas has become more of a priority in the post-pandemic Tokyo market, given the phasing back of flexible work arrangements. Moreover, Japanese corporate performance has been strong over the past year, with many companies reporting record profits, leading to robust wage growth in 2024, which should boost interest in moving to the Tokyo 23W.

In addition, the foreign population continues to grow in earnest, with nearly a third of the total net population influx to the Tokyo 23W between March and May comprising non-Japanese nationals. This looks to continue unabated as Japan welcomes more foreign workers in order to deal with the labour crunch situation. 

Overall, while average occupancy rates in Q2/2024 are still slightly shy of the pre-pandemic level, the market has made consistent progress over the past year, and we predict that this positive momentum should continue in 2024 with some further improvements in occupancy rates a possibility.