The number of condominiums offered for sale in Tokyo and surrounding areas in September had the biggest increase in 17 months as developers accelerated sales before a planned consumption tax increase in April.
Developers introduced 5,968 units to the market in September, 77 percent more than the 3,366 units a year earlier, the Real Estate Economic Research Institute Co. said in a report released in Tokyo today. The last time the monthly data had a bigger gain was in April 2012, when it rose 82 percent.
More apartments are being offered to capture last-minute buying demand before the government increases the rate of sales tax to 8 percent in April 2014 to tackle the nation’s swelling debt. The supply of new apartments in Tokyo this year will rise to as many as 55,000 units, the highest level since 2007, after five straight months of increase in supply, according to an estimate by the institute.
“The consumption tax rise is one of the reasons for the increase in supply,” Akio Fukuda, a manager at the Real Estate Economic Research Institute, said at a press conference in Tokyo today. “Homebuyers are also expecting that prices will start to gain.”
Among the developers that offered units last month was Mitsubishi Estate Co., Japan’s second-largest developer. It introduced the 49-story Parkhouse Harumi Towers, where units are priced from 49.8 million yen ($496,000) to 83.9 million yen, according to the company’s website.
The Tokyo-based industry researcher increased its forecast for new supply for the year by 10 percent to 55,000 units from 50,000 units, Fukuda said.
Homebuyers’ tax exemptions will be increased to as much as 4 million yen per transaction for residents who are moving in from April 1, according to the National Tax Agency. That compares with a tax break of 2 million yen for residents who are moving in from Jan. 1 this year till March 31, 2014 according to the tax agency’s website.
“We expect the favorable market condition to continue because of the government’s tax exemption plan,” said Mikio Namiki, an analyst at Mizuho Securities Co. in Tokyo.
The Topix Real Estate Index, a measure of 44 property-related stocks, gained 0.3 percent at the close of trading in Tokyo.