Tokyo – Q1/2024
MARKETINMINUTES

Residential Leasing

Savills Research

Savills team
Please contact
us for further
information
JAPAN
Christian Mancini
CEO, Asia Paciﬁc(Ex Greater China)+81 3 4330 3611
cmancini@savills.co.jp

RESEARCH
Tetsuya Kaneko
Managing Director,
Head of Research &Consultancy, Japan+81 3 4330 3103
tkaneko@savills.co.jp
Bryan Kuek
Manager, Research &Consultancy, Japan+81 3 4330 3104
bkuek@savills.co.jp

Further improvements moving into 2024
Strong growth experienced in the Tokyo 23W, with further improvements
likely in 2024.
• Average rents in the Tokyo 23 wards (23W) increased notably
by 4.1% quarter-on-quarter (QoQ) and 5.2% year-on-year(YoY) to JPY4,237 per sq m.
• Rents in the central ﬁve wards (C5W) increased in tandem
by 2.2% QoQ and 4.4% YoY to JPY5,027 per sq m.
• The C5W rental premium over the 23W average decreased
moderately to 18.6%.
• In the C5W, Chuo and Shinjuku saw the most signiﬁcantquarterly increases of 3.8% QoQ and 2.8% QoQ,
respectively. Overall, yearly growth among all wards in the
C5W has been strong.
• Average rents for smaller units in the C5W in the 15-30 sq
m size band increased at the largest rate, by 2.3% QoQ.
• Average occupancy rates in the 23W increased by
0.2 percentage points (ppts) QoQ to 97.2%, and rose
marginally by 0.1ppts on an annual basis. Meanwhile,
occupancy in the C5W remained unchanged QoQ at 96.9%.
• In Greater Tokyo, record-high condominium prices haveforced many residents to seek more aﬀordable options in
the rental market. This has also likely contributed to thestrong rental increments seen over the quarter.

savills.co.jp/insight-and-opinion/“The 23W market kept postingstrong quarterly rental
growth in Q1/2024. This was
supported by positive quarterly
net migration, particularly
by the foreign population,
which continues to increase
unabated. Domestic migrationis also likely to fare well during
this spring moving season.
Meanwhile, demand for rental
units will continue to bebolstered by those priced outof buying condominiums.”
SAVILLS RESEARCH & CONSULTANCY

1

Simon Smith
Regional Head of
Research & Consultancy,
Asia Paciﬁc+852 2842 4573
ssmith@savills.asia
Savills plc
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Residential Leasing

MAP 1: Tokyo’s 23 Wards by Survey Area

Adachi

Itabashi
Kita
NerimaKatsushika
Arakawa

ToshimaNakanoBunkyoTaito

SumidaShinjuku

Suginami

Edogawa

ChiyodaShibuya

Chuo

Koto

MinatoSetagaya
MeguroShinagawaTokyo 23 Wards
Central (C5W)
South

Ota

West
North (Inner)
North (Outer)
East (Inner)
East (Outer)inched up, and a majority of Tokyo residents
have resumed normal outdoor routines likeduring the pre-pandemic state. Migration
to the 23W remained strong in Q1/2024,
and the market welcomed a net-total of
6,800 new residents. All-in-all, Tokyo will
likely continue to attract migration, which
will strengthen demand and rental growth
moving forward.
Meanwhile, price increments in thefor-sale condominium market, due to a
combination of supply constraints and sounddemand, has left many residents priced outof buying and forced to resort to renting,which has contributed to further competition
for reasonable units. Considerable rental
increments should provide an adequate buﬀer
for landlords against elevated construction
and maintenance costs, in addition to
upcoming interest rate hikes, albeit likely
moderate, and higher reﬁnancing costs.
Overall, we anticipate few changes tothis status quo for the meantime. Althoughsome observers hold justiﬁed concerns overfuture movements in the Japanese national
population, this has been compensated for by
ﬁrm growth in the foreign population. The
sound fundamentals of the 23W market, in
addition to the various urban regenerationand improvement projects taking place acrossthe city hint at the positive trajectory of therental residential market moving forward.

Source Savills Research & Consultancy

SURVEY GEOGRAPHY
In order to illustrate trends in the central
Tokyo residential market, Savills has
segmented Tokyo’s 23 wards (23W) into
seven distinct geographical areas: Central(or “central ﬁve wards”), South, West, North(Inner and Outer) and East (Inner andOuter).

In contrast to the luxury residential
market, advertised or “asking” rents for midmarket units ﬁtting the above criteria are
typically non-negotiable and are not subject
to incentives such as rent-free periods. Savills
mid-market rental indices are therefore
considered to closely reﬂect movements incontract rents for the Tokyo market.

RENTAL INDEX DATACHARACTERISTICS
Savills collates thousands of leasing
comparables each quarter in order to analysetrends aﬀecting “mid-market” rental
apartment units in Tokyo. Our benchmark
rental data is based on average advertisedmonthly rents for units which ﬁt thefollowing criteria:

OVERALL RESULTS
Average rents in the Tokyo 23W experienced
notable growth in Q1/2024, building on the
momentum from the previous quarter. Thisstrong performance was enjoyed universally
across the market, with all submarkets
experiencing moderate quarterly rental
growth, as well as posting strong growth
on an annual basis. The average occupancy
rate elevated moderately in the 23W overthe quarter, and further improvements
will likely be anticipated during this spring
moving season.
Looking back at 2023, the demographic
situation in the capital saw noticeable
improvements, and the large inﬂux of newresidents has driven notable rental demand
over the year. Indeed, since the pandemic
subsided, rates of oﬃce participation have1) studio and one- or two-bedroom rental
apartments of up to 100 sq m in size,2) reinforced concrete structures built
within the last ten years, and
3) properties located in Tokyo’s 23 wards
and situated within a ten-minute walk of thenearest station.
savills.co.jp/insight-and-opinion/

2

MID-MARKET RENTAL TRENDS BYSURVEY AREA
Sound rental growth continued for asecond consecutive quarter among average
mid-market units in the Tokyo 23W in
Q1/2024, and Tokyo appears to haveattained a new high. Average asking rents
in the 23W increased by 4.1% QoQ and
5.2% YoY to JPY4,237 per sq m. Notably,
the C5W premium over the 23W average
has fallen moderately to 18.6% (Graph 2),
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 growthin the post-pandemic setting, with a total
inﬂux of almost 100,000 new residents tothe 23W recorded in 2023. This trend has
been driven in large part by incrementsin the foreign population, with foreign
nationals comprising 55,000 of these newresidents. 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

Residential Leasing

rental growth going forward in the Tokyo
23W market. Certainly, the market mightexperience some temporary corrections,especially after the recent strong growth.
Tokyo 23 ward average
Central five wards
Average rents in the C5W increased by 2.2%
4 period Mov. Avg. (Tokyo 23 wards)
QoQ and 4.4% YoY to JPY5,027 per sq m in
4 period Mov. Avg. (Central five wards)
120
Q1/2024, and the demand for residences inTokyo’s central wards appears to go from115
strength to strength. Chuo and Shinjuku
110
were the stand-out performers among theconstituent central wards, posting quarterly105
rental growth of 3.8% and 2.8%, respectively.
Elsewhere, rental growth was moderate
100
among the other constituent wards, between
95
1.6% QoQ and 1.4% QoQ. Notably, thenumber of available units completed within
90
less than 12 months increased by 10% QoQ
85
to nearly 450 units in the C5W in Q1/2024,
likely in anticipation of the burgeoning
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
20232024 residential demand in central wards, withmore professionals returning to their oﬃces in
Source Savills Research & Consultancy
the post-pandemic. Indeed, living in the C5W
is considered a status symbol by many highGRAPH 2: Rental Premiums/Discounts* vs 23W
income young professionals, who likely prefer
Average, 2019 to Q1/2024
living within a short commute to their oﬃces
in central business districts, in addition to the
2019
2020
2021
2022
2023
2024
convenience of having various amenities and25%
entertainment options on their doorsteps.
20%
Average rents in the South submarket
15%
experienced the largest increase among10%
the surveyed submarkets, at 4.0% QoQ and
5.5% YoY to JPY4,376 per sq m. At the ward
5%
level, much of this growth was driven by Ota
0%
and Shinagawa wards, both of which saw-5%rents grow by 4.8% QoQ, while Meguro and-10%
Setagaya also witnessed strong quarterly
rental growth at 4.0% and 2.4%, respectively.
-15%
Despite the marginal net-outﬂow of residents-20%
over the quarter, the South submarket-25%
appears to be a popular ward for residents,-30%
having enjoyed among the largest population
C5W South North
East
West North
East
increments in the 23W in 2023. Indeed, the(Inner) (Inner)(Outer) (Outer)submarket provides convenient access to
Source Savills Research & Consultancy
central business districts due to its proximity*The above represents the average premium/discount over therespective year.
and public transport options, while being
renowned for many peaceful residential
areas. As such, some areas in the submarket
GRAPH 3: Mid-market Apartment Rents,
Q1/2016 to Q1/2024
possess a similar rental level to the C5W
market. With these factors in mind, theTokyo 23 Ward
Central 5 Wards
SouthSouth submarket will likely see strong
North (Inner)
East (Inner)Westdemand from many workers during thisNorth (Outer)
East (Outer)
5,250
spring moving season.
The Inner North submarket enjoyed
5,000
the largest rate of rental growth, at 4.3% on
4,750
both a quarterly and annual basis, rising to
4,500
JPY4,346 per sq m in Q1/2024. Rental growth4,250
was consistent at the constituent ward level,
4,000
with average rents increasing by 4.4% QoQ in
3,750
Toshima and 4.2% QoQ in the more expensive
3,500
Bunkyo. Similar to the South, the Inner North
3,250
has close proximity to multiple central business
3,000
districts, including the Tokyo station area
2,750
and Ikebukuro, while also boasting a liveable
2,500
atmosphere, with plentiful green space,amenities, and leading educational options. As
2016 2017 2018 2019 2020 2021 2022 2023
2023
2024
such, Toshima and Bunkyo wards will likely
Q1

Q1

Q3

Q1

Q3

Q1

Q3

Q1

Q3

Q1

Q3

Q1

Q3

Q1

Q3

Q3

Q1

JPY / SQ M / MONTHPREMIUM / DISCOUNT TO 23W AVERAGE

Q1
Q3
Q1
Q3
Q1
Q3
Q1
Q3
Q1
Q3
Q1
Q3
Q1
Q3
Q1
Q3
Q1
Q3
Q1
Q3
Q1

RENTAL INDEX, Q3/2008 = 100

GRAPH 1: Mid-market Apartment Rental Index,
Q1/2014 to Q1/2024

Source Savills Research & Consultancy

savills.co.jp/insight-and-opinion/

3

continue to be popular among both families
and young workers, and demand for rental units
should remain strong moving forward.
The Inner East submarket has been a standout performer in the Tokyo 23W residential
market, exhibiting rental growth of 2.9%
QoQ and 3.9% YoY to JPY4,055 per sq m. In
contrast to the previous quarter, rents in Taito
increased at the largest rate, by 3.8% QoQ,
while rents in Koto and Sumida grew by 2.8%
QoQ and 1.9% QoQ, respectively. The Inner
East has been a winner in demographic terms,
recording 12 successive months of positive
net migration in 2023. Furthermore, unlike amajority of wards in the 23W, all constituent
wards in the Inner East enjoyed moderate
population inﬂuxes of nearly 2,000 residents
in Q1/2024, which is a positive sign for rental
demand this quarter. During this spring
moving season, many young workers will
likely be drawn to the Inner East, due to its
relative proximity to the Tokyo station area,
while remaining an aﬀordable alternative toliving in the C5W.
Average rents in the West submarket
experienced a relatively moderate incrementof 1.1% QoQ to JPY3,827 per sq m, translating
to a 2.6% yearly increase. Rental growthvaried slightly among the constituent wards- Nakano experienced the largest QoQ rental
growth at 1.6%, while Suginami and Nerima
were more modest at 0.9%. Yearly rental
growth in Nakano stood out at 4.7% in theward. As a popular residential area withvarious entertainment options, green space,and convenient public transport access topopular areas such as Shinjuku, Ikebukuro
and Shibuya, the West submarket experienced
moderately large net migration of 12,500
people in 2023. Although net migration was
relatively limited in Q1/2024, the West should
be in good standing over the coming year,
especially with the forthcoming inﬂux ofworkers in the next quarter.
Quarterly rental growth in the Outer Northsubmarket was sound at 3.1% in Q1/2024,
and increased on a yearly basis by 4.6% to
JPY3,642 per sq m. Rental growth acrossthe constituent wards Kita and Itabashi wasrelatively consistent at 3.3% QoQ and 2.8%
QoQ, respectively, in addition to incrementsof 4.9% YoY and 4.2% YoY, respectively. As
a proportion of the overall population, theOuter North enjoyed relatively large net
migration of 12,000 residents in 2023, a
trend that has continued in Q1/2024. Indeed,
the balance of aﬀordability, accessibility tocentral areas, and liveability likely makes theOuter North submarket a popular choice,which should contribute to the enduring
appeal of the submarket.
Lastly, the Outer East submarket enjoyeda similar trend, with overall average rents
increasing by 2.0% QoQ and 3.4% YoY to
JPY3,404 per sq m. Looking at the ward
level, Edogawa enjoyed the largest quarterly

Residential Leasing

GRAPH 4: Average Occupancy for J-REIT Residential
Assets, Q1/2016 to Q1/2024*
23-ward average
South
East

Central 5 wards
North & West

100%

98%

96%

94%

2016

2017

2018

2020

2021

Q1

Q1

Q3

Q1

Q3

Q1

Q3

Q1

2019

Q3

Q1

Q3

Q1

Q3

Q1

Q3

Q1

Q3

92%

2022 2023
20232024
2024

Source Savills Research & Consultancy based on publicly disclosed
J-REIT property data
* Q1/2024 is as of February 2024

GRAPH 5: Rents by Unit Size, C5W, Q1/2016 to
Q1/2024
15-30 sq m

30-45 sq m

45-60 sq m

5,400

JPY / SQ M / MONTH

5,200
5,000
4,800
4,600
4,400
4,200
4,000

2016

2017

Q1

Q1

Q3

Q3

Q1

Q3

Q1

Q3

Q1

Q3

Q1

Q3

Q1

Q3

Q1

Q3

Q1

3,800

2024
2018 2019 2020 2021 2022 2023
20232024
Source Savills Research & Consultancy

GRAPH 6: Supply and Average Price of New
Condominiums in Greater Tokyo, 2011 to 2023
Supply (RHS)

Average price (LHS)
60,00090,00080,00050,00040,00060,00050,00030,00040,00020,00030,000NUMBER OF UNITS

JPY (THOUSANDS)

70,00020,00010,00010,00000Source REEI, Savills Research & Consultancy

savills.co.jp/insight-and-opinion/

rental increment at 3.9%, respectively, while
Adachi and Arakawa experienced moderatequarterly rental growth at 2.6% and 2.5%,
respectively. In Q1/2024, the Outer East
attracted the largest net migration amongthe 23W submarkets, with the bulk of newresidents moving to Adachi and Katsushika.
Demand for residences in these submarkets
is likely high among families seeking a more
residential atmosphere, and workers withmore modest real incomes who have been
impacted by inﬂation. In addition, with hybrid
work arrangements looking to persist for the
meantime, many workers will likely favour
the relative aﬀordability of larger units that
support home oﬃces in the Outer East. This
trend is reﬂected also in the narrowing rental
discount to the 23W average.
OCCUPANCY RATES
Occupancy rates in the Tokyo 23W rose by
0.2ppts QoQ to 97.2% in Q1/2024, while also
increasing marginally by 0.1ppt on an annual
basis. Although still slightly shy of the prepandemic peak level, average occupancy rates
exhibited a steady improvement overall in
2023, and look to maintain this momentum
moving into 2024. The situation in the C5W
mirrors this sentiment, with occupancy
remaining at a tight level of 96.9%, and isapproaching the pre-pandemic ﬁgure.
Growing rates of in-oﬃce participation
continue to proceed gradually but steadily.
Although hybrid work arrangements will
likely persist as a corporate perk, particularly
among large companies, most workers
commute to the oﬃce more often thanworking from home, which likely encourages
greater interest in residences within closer
proximity to oﬃces in central business
districts. This has been a major driver of net
migration to the Tokyo 23W in the postpandemic era. In addition, Japan has attracted
noticeable numbers of foreign residents
throughout 2023, which have compriseda majority of the population growth seen
over recent quarters, and this trend looks tocontinue unabated for the meantime.
All constituent wards of the 23W haveenjoyed positive net migration throughout
2023, which has supported the steady
improvement in occupancy rates. Central
wards will continue to attract high-income
residents who are less aﬀected by inﬂation,
and who seek proximity to oﬃces, amenities,
and entertainment options. Meanwhile,
peripheral areas will remain popularamong renters who continue to work fromhome more often, those who have notenjoyed meaningful wage growth, andfamilies seeking larger living spaces. Sound
population growth will likely continue in
2024, especially with this spring moving
season, and the prospects for further
improvements in occupancy across all
submarkets are bright.
4

RENTS BY UNIT SIZETokyo’s rental market is principally made up
of compact single-occupier units, typicallyless than 45 sq m (13.6 tsubo) in size. Such
units can often make up as much as 75% ormore of the 23W area’s rental listings. Unlike
Western major global cities such as London
and New York, house or apartment sharing
does not form a major segment of the rental
market. As a result, there is a large, stable
market for small- to mid-sized units.
The most notable shift when looking at
size bands in the C5W in Q1/2024 occurredin the smaller 15-30 sq m category. Averagerents for smaller units increased by 2.3%
QoQ, which should correlate with the general
growing shift towards in-oﬃce participation.
Although many large companies, and more so
IT ﬁrms, keep hybrid work arrangements inplace, a large proportion of workers who can
aﬀord to live in the C5W are likely employedby companies that have been mandating
greater oﬃce attendance, such as ﬁnanceand consulting ﬁrms. Therefore, proximity
and access to oﬃces are likely a priority forthis demographic of renters, in addition toless emphasis on space for home oﬃces.
Moreover, a large proportion of this segmentof residents likely comprises younger singles,translating into a greater emphasis on smaller
and more reasonably priced units.
Meanwhile, the quarterly performance ofunits in the medium 30-45 sq m size band
was relatively moderate, increasing by 1.4%
QoQ, while rents among larger units of 45-60
sq m increased marginally by 0.7% QoQ,
with per sq m asking rents of the former
sitting marginally above those of units in thesmallest size band. Although the demand
for larger units that can accommodate homeoﬃces remains ﬁrm for the meantime, thescaling back of hybrid work arrangements
may gradually reduce the emphasis for suchspeciﬁcations, which may impact the demand
for larger units to some extent moving
forward. Also, the premium for large units
has become noticeable, possibly discouraging
some renters. Overall, the C5W remains a
popular residential destination due to its
proximity to the city centre, availability ofamenities, and status, with a recent slewof high-end residential developments thatshould raise the proﬁ le of the submarket.
GROWING DEMAND IN THE RENTAL
MARKET DUE TO LIMITED SUPPLYOF FOR-SALE UNITS
Social and economic trends since thepandemic have facilitated a growing shift byresidents towards the Tokyo 23W market,
particularly among those who are returning
to oﬃces in central business districts more
often. But the price increments of for-salecondominiums are proving prohibitive formany (Graph 6). This section will outline
both the causes and the development of thisResidential Leasing

trend in the 23W market, showing the impact of
this shift on the rental market.
For-sale condominium prices have seen
notable increments due to a combination ofstrong demand and supply constraints, and as ofJanuary 2024, the average price of a newly built
for-sale condominium in the Tokyo 23W reached
JPY115.6 million, with an average sq m price of
JPY1.8 million, according to a monthly survey
by the Real Estate Economic Institute (REEI). A
long-term contributor to these high prices has
been interest rates remaining at historic lows,which has eﬀectively lowered the actual cost ofpurchasing a condominium. Furthermore, theincreased number of dual-income households has
led to greater purchasing power and contributed
to stronger housing demand, especially forconveniently located units in central Tokyo.
Indeed, according to the Ministry of Internal
Aﬀ airs and Communications, the number of dualincome households has increased signiﬁcantly
over the past decade as more women have entered
the workforce, especially as professionals.
In conjunction with strong demand, a handfulof factors have led to a bottleneck in supply,with the number of for-sale condominiums
built since the onset of the pandemic (between
April 2020 and June 2023) dropping by over 22%
compared to the equivalent period prior to thepandemic (between January 2017 and March
2020), according to a study in November 2023 by
Urban Research Institute Corporation, aﬃ liatedwith Mizuho Financial Group. A primary reason
for this moderate level of supply lies in thediﬃculty in procuring plots of land suitable forthe construction of for-sale condominiums,
in conjunction with the increasing prices ofland in Tokyo. Consequently, the same study
reports that the average per-unit price of for-salecondominiums increased by 20% compared toprices in the pre-pandemic, which admittedly
appears to have also been inﬂuenced partially by
an uptick in more expensive luxury developments.
High construction costs are an additional
reason for rising condominium prices. The
construction industry suﬀers from chronic labour
shortages and has seen labour costs increase. In
addition, new labour regulations may deteriorate
the situation. Moreover, in conjunction with the
weak yen, the signiﬁcant increase in raw materials
prices, coupled with elevated energy prices, will

savills.co.jp/insight-and-opinion/

further raise construction costs. Overall, the rising
construction costs will likely further lift the pricesof newly constructed condominiums even further,at least in the near future.
Meanwhile, more companies in Tokyo aremandating a return to in-oﬃce participation.
A monthly survey on workstyle conditions
in Tokyo prefecture published by the Tokyo
Metropolitan Government reports that 41.6% ofcompanies are currently implementing remote
work arrangements in January 2024, which is asigniﬁcant drop from the peak level of 65.0%
in August 2020, and the lowest ﬁ gure since theonset of the pandemic. This shift appears to havetriggered a change in lifestyle preferences for
some, and a rebound in net migration to the 23W
has been observed since the winding down of thepandemic, reaching nearly 100,000 new residents
in 2023. This heightened demand has put further
upward pressure on for-sale condominium prices,and these barriers to purchasing, especially for
those with relatively modest incomes, have forced
increasing numbers of people to resort to therental market.
Given the factors above, and the subsequent
growth in demand for rental residences, averagerents in the 23W have been on an upward trend.
Looking ahead, the for-sale condominium market
will continue to face multiple headwinds that are
expected to keep prices elevated. Indeed, newlabour regulations that limit working hours in
the construction industry will likely put furtherpressure on the labour shortage and subsequently
construction costs, in addition to persistently
elevated raw materials and energy costs. On theother hand, net migration into the 23W looks tocontinue unabated, due to both declining rates
of remote work and increments in the foreign
population, which, against the background oflimited new supply of for-sale condominiums,
will fuel the growth in demand for rental units,
likely stimulating further growth in the rental
residential market.
OUTLOOKThe Tokyo 23W residential market appears to
be going from strength to strength in the postpandemic state, and observers should anticipate
moderate and consistent growth in rents moving
forward. This stable performance is underpinnedby Tokyo’s sound fundamentals, particularly

5strong net migration, a large proportion of which
can be attributed to sustained inﬂows of foreign
residents. Furthermore, the spring moving period
should provide further momentum to this trend,
and will likely elevate the rental residential market
to new highs.
A notable paradigm shift in the post-pandemic
has been the transition to greater levels of oﬃce
participation, which has encouraged the growing
net migration of residents to the 23W - a reversalof the trend observed during the pandemic. This
partly explains the notable growth in rents anddrop in the number of available units across all
submarkets in the 23W in Q1/2024, with highincome young singles likely comprising a large
proportion of the demand for units in central
wards, while the popularity of peripheral wards
has largely been sustained by families and thoseon more modest incomes.
With the inﬂux of residents into the 23W,
the demand for residential units has naturally
increased in tandem. The for-sale condominium
market has also experienced signiﬁcant priceincreases over recent years, due to a combinationof limited supply and strong demand. Thissituation has priced many residents out of buying,
forcing many to turn to the rental market. With
positive net migration into Tokyo set to continue
for the meantime, and workers increasingly
returning to their oﬃces, this trend will likely
continue, leading to further growth in the rental
residential market. Furthermore, the notablerental growth seen recently should insulate
landlords from the elevated maintenance andrepair costs, as well as greater reﬁ nancing costs
due to anticipated interest rate hikes.
Overall, the 23W residential market isrenowned for its stability, and the post-pandemic
setting has brought about a new era of growth in
the market. Japan has reached a stage of nominal
inﬂation, which implies at least consistentnominal rental growth going forward, and hopes
are also high that this year’s round of spring wage
negotiations will bring further salary increases
for a wider proportion of the working population.
Certainly, the market might experience some
temporary rental corrections, especially after
the recent strong growth. That said, the strong
momentum should herald further rental growthin the coming quarters, which raises the overall
prospects of the sector.