According to most business media, now is the time to act if you are thinking about buying a home. Though the Liberal Democratic Party has yet to confirm that it will go ahead with the consumption tax increases the Democratic Party of Japan passed last year, it seems likely that the first hike to 8 percent will go through as planned in April 2014. The prediction is that people will try to buy homes before the consumption tax goes into effect and interest rates rise as a response to Prime Minister Shinzo Abe's effort to boost inflation. Because the consumption tax — which applies to new homes but not to land — is levied when the buyer takes possession of the property, experts are expecting a rush on new homes by the end of the summer.
Japanese real estate analysts chart trends in the housing market by looking at condominiums, since they tend to keep their value longer than single-family houses do. According to one research company, which was quoted in a recent issue of Shukan Asahi, last December, the average price of condos in the Tokyo metropolitan area rose by 0.2 percent over the previous month, even though the actual number sold went down. Prices of condos had continually dropped since 2010, but in the latter half of 2012 the opinion was that the market had "bottomed out." And the closer you get to the center of Tokyo, the bigger the subsequent increase.
The average December price of condos in the 23 wards of Tokyo was 1.2 percent higher than it was in November. However, almost all the real estate agents we have talked to since the beginning of the year told us properties aren't moving as much as this trend would seem to indicate. Because April is the start of the new fiscal and school years, realtors do the bulk of their business between January and March, and everyone said sales and new rental contracts are at about the same levels as they usually are this time of year.