Newly built condo prices in Tokyo surged to a record in the first six months of 2023, adding fuel to a trend of growth stemming from factors including an influx of luxury units.

The average price of a new apartment in central Tokyo jumped 60% to ¥129.6 million ($930,000) in the January to June period — the highest since record-keeping began, according to the Real Estate Economic Institute, which has been tracking data on condo sales since 1973.

"The overall trend of increasing prices will continue, though they won’t become this extreme,” said Tadashi Matsuda, a senior researcher at the institute. He said the rise in values was due to a handful of expensive units in central Tokyo going on sale at the beginning of the year.

Real estate prices in Japan, historically depressed since a property bubble burst more than 30 years ago, have been rising due to higher labor and raw material costs. Supply has been falling, with the number of new units for sale down 9% in central Tokyo in the first half.

In 2021, new condo unit prices in the Tokyo metropolitan area, which includes prefectures around the capital, started to exceed levels unseen since the bubble era.

Matsuda also pointed to the high cost of land in central Tokyo and brisk sales of high-end apartments. Tokyo has seen an increase in luxury developments in the city center, as living habits among wealthy residents change and Asia’s rich flock to Japan to buy the properties.

The Tokyo metropolitan area also saw new condo prices rise to a historic high of ¥88.7 million on average in the first six months.