TOKYO — Amid the deep gloom that surrounds the Japanese economy and the generally depressed property market, strong sales in the residential luxury segment of central Tokyo seem almost counter-intuitive. But this odd mini-boom is rooted in the distinctive financial and demographic profiles of the nation’s wealthy, analysts say, which is helping to keep the top-end market abuzz.
According to the Real Estate Economic Institute in Tokyo, 18 of the 22 most costly condominium units that went on the market in the city center in December 2010 were sold within the month for ¥200 million, or $2.4 million, or more. That velocity, an 81 percent sales rate, is considered high, especially for the top end of the real estate market.
Overall, brisk sales were reported in December for the whole sector in Tokyo, with 73.9 percent of the 3,233 condos that went on the market in December selling within a month, a high rate considering that sales grew markedly from just 1,932 in November.
“Prices had become bloated for the inner-city area in Tokyo, and buyers had retreated to the suburbs” over the past few years, said Tadashi Matsuda, a researcher at the institute. “But buying activity regained strength.”
Real estate observers are particularly paying attention to the success of luxury apartment projects like the Roppongi Tokyo Club Residence, built by Mitsui Fudosan; Futakotamagawa Rise Tower & Residence, developed by Tokyu Group; and City Tower Azabu Juban. All three projects are in the city’s popular mid- to downtown districts.
These projects also highlight the resurgence of traditional developers like Mitsui Fudosan, Tokyu Land and Mitsubishi Estate, which had been somewhat eclipsed by new companies in the years before the global downturn.
“Many midsized companies and upstart firms went bust in the last few years,” Mr. Matsuda said, shifting the momentum back to the old players “who are generally more connected and good at procuring land in the centrally located areas.”
Meanwhile, buyers have emerged from the wealthy class, many belonging to the baby boomer generation and looking for comfortable retirement homes. Their choice destination: the center of Tokyo, including the Minato, Shibuya and Setagaya areas.
Japan’s aging population has had an impact on several segments of the economy — not just real estate. In 2010, 22.5 percent of the population was 65 or older, a group that owns roughly 60 percent of the ¥1,450 trillion in total individual financial assets.
“Generally there is a preference among the retiring generation to seek a more convenient lifestyle in the center of town, where a whole range of services are available in the vicinity,” said Takashi Ishizawa, a senior real estate analyst with Mizuho Securities in Tokyo.
And that is one reason Rise Tower & Residence, near Futakotamagawa station in the Setagaya neighborhood, has been especially popular with older buyers, said Hideyuki Kayashima, project leader at Tokyu Land, which developed the project.
“There are many people who are keen to give up their car-centric lifestyle” in the suburbs and move to a self-contained apartment, with shopping malls, restaurants and hospitals in the immediate vicinity, he said. Also, the urban areas of Tokyo have extensive subway and rail systems, and cars are generally considered unnecessary except for recreational outings, another appealing feature for older residents.
The 1,033-unit Rise development consists of two 6-story buildings, two 28-story buildings and one 42-story structure. It is adjacent to shopping and restaurants, most of which can be reached through enclosed alleys and tunnels, and the Futakotamagawa station — all operated by Tokyu Group companies, like Tokyo Railways and Tokyu Malls.
The giant complex began sales last year and now has just a few dozen apartments left, as buyer reaction “has been extremely good,” Mr. Kayashima said.
About 180 of its units were priced at more than ¥100 million, 24 of them at more than ¥200 million. The most expensive: a three-bedroom unit on the 42nd floor with 218 square meters, or 2,350 square feet, of floor space, including a Jacuzzi with a view of the scenic Tamagawa River — and a ¥439 million price tag.
Sales of Roppongi Tokyo Club Residence, in the thick of Tokyo’s vibrant Roppongi night life, began last summer and drew a resounding buyer reaction, said Tetsuo Kondo, project leader with Mitsui Fudosan Residential, the developer. Most of the 345 available units have found buyers, he said, adding that the seven luxury units on the highest floors, priced from ¥270 million to ¥480 million, were sold immediately. “That was more than we had anticipated,” he said.
