INTRODUCTION

Condominiums in Osaka City have seen prices increase, especially in recent years, on the back of rising construction costs and land prices, hitting a new high of JPY914,000 per sq m in 2022. Despite these increments, the contract rate for condominiums in Osaka has remained comfortably above 70%, with fundamental factors including a growing population and low interest rates supporting demand. Demand for housing in the city is likely to increase further in the current post-pandemic era, as higher levels of office attendance should entice more people to live closer to the main business districts of Osaka. This trend can be observed especially in central wards in Osaka City, where population growth has been the strongest, and residential land prices have skyrocketed.

DEMAND AND SUPPLY

One reason for the increment of for-sale condominium prices is the low supply of new units. According to the Real Estate Economic Institute (REEI), the number of condominium units constructed in 2022 was about 25% lower than the peak supply observed in 2017 (Graph 2). Construction volumes in Osaka City have thus seen a clear decline since the pandemic. However, even in the post-pandemic environment, supply is unlikely to see significant increments.