On the 21st, At Home Co., Ltd. announced the results of the 39th "Local Real Estate Brokerage Business Sentiment Survey" (July to September 2023), covering 13 prefectures and 14 areas in Hokkaido, Miyagi Prefecture, the Greater Tokyo Area (1 metropolis and 3 prefectures, including the 23 wards of Tokyo and its suburbs), Shizuoka Prefecture, Aichi Prefecture, the Kinki region (2 prefectures and 1 prefecture), Hiroshima Prefecture, and Fukuoka Prefecture. The survey assessed the business sentiment index (DI) compared to the same period of the previous year ("50" indicates the same level as the previous year). The survey targeted management-level personnel of real estate agencies with prefectural governor licenses who have been engaged in real estate brokerage for more than five years. The survey was conducted from September 14 to 26, 2023, with 1,839 valid responses. The analysis was conducted by At Home Labo Co., Ltd.
The current rental brokerage DI for the Greater Tokyo Area decreased by 3.5 points to 46.5 compared to the previous period, while the Kinki region also decreased by 4.5 points to 42.5. Despite this decline, both regions maintained a positive trend compared to the same period last year for the 10th and 6th consecutive periods, respectively. The market downturn, coupled with fewer transactions in the high-rent bracket, contributed to the decline in business conditions.
Nationwide, 12 out of 14 areas experienced a decrease compared to the previous period. Except for Saitama Prefecture, the Greater Tokyo Area witnessed a decline, and all three areas in the Kinki region also experienced decreases. Although Kyoto Prefecture's DI decreased from the previous period, it remained above 50 at 50.8, down by 5.5 points, indicating continued strong performance. In Miyagi Prefecture, the DI increased slightly to 45.9, up by 1.0 point. Comments from real estate agencies included observations such as "an increase in apartment searches by foreign nationals" (Kyoto City) and "an increase in corporate contracts for company housing and dormitories" (Kawaguchi City, Saitama Prefecture), indicating support from inbound and corporate demand in the market.
The sales brokerage DI for the Greater Tokyo Area decreased by 3.3 points to 43.9, while the Kinki region decreased by 2.5 points to 41.7. This marked the first decline in three periods for the Greater Tokyo Area and the first decline in six periods for the Kinki region. Although the Greater Tokyo Area has been relatively stable with a DI around 46 and the Kinki region around 44, there are signs of weakness emerging. By area, 12 out of 14 areas experienced a decline, with 10 areas showing a decrease compared to the same period last year. Comments from real estate agencies indicated that "consumers are hesitant due to high prices such as electricity bills" (Sakado City, Saitama Prefecture) and "fewer real estate investors are bidding aggressively" (Kashiwa City, Chiba Prefecture), suggesting that both users and businesses are being affected by the surge in real estate prices.
The outlook DI for the October to December 2023 period improved for rental brokerage, with the Greater Tokyo Area at 50.3 and the Kinki region at 45.6, among others, indicating a more optimistic outlook for this period. Thirteen out of 14 areas are expected to see an increase in DI, with Tokyo's 23 wards, Kyoto Prefecture, and Hokkaido expected to exceed 50 in outlook DI. For sales brokerage, the Greater Tokyo Area is predicted to remain stable at 43.8, while the Kinki region is forecasted to remain flat at 42.0. Despite the positive outlook for rental brokerage, only four areas out of 14 are expected to see an increase in DI.
Jun'ko Iwama, Executive Officer of Data Marketing Department at At Home Labo, analyzed, "In the rental market, an increase in contracts for low-rent units to control expenses has been observed, but the recovery trend from the COVID-19 pandemic continues. Regarding sales brokerage, a decrease in actual demand due to soaring prices has been noted, with many areas seeing decreases compared to the same period last year. However, demand from investors and wealthy individuals in the central areas of Tokyo remains robust."
Reprinted from: Real Estate Distribution Research Institute Co., Ltd. “R.E.port”
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