Tokyo residential occupancy rates nearing pre-pandemic norms

Occupancy was at 96.8% in Q3.

Residential occupancy rates in Tokyo’s 23 wards (23W) increased slightly by 0.2ppts QoQ to 96.8% in Q3/2023, and are 0.7ppts higher than during the same period of 2022, data from Savills revealed. Similarly, occupancy in the central five wards (C5W) increased by 0.1ppts QoQ and 0.5ppts YoY to 96.4%. 

“Overall, occupancy rates appear to be inching closer to pre-pandemic norms as society progresses further toward normalcy territory. Indeed, the demand for units closer to business districts should steadily improve as more employees return to working at the office, further bolstered by strong wage growth this year, especially amongst younger professionals,” the analyst said.

Here’s more from Savills:

Looking ahead, the population growth of the 23W is expected to continue, and the foreign national population will likely continue to comprise a sizable proportion of this, meaning that wards that have traditionally been popular with foreign nationals are likely to fare comparatively well. 

Overall, population growth should lead to increased demand for residential properties within the 23W, consequently pushing occupancy rates higher. That said, it is also worth noting that inflation may force many average households to seek more affordable housing alternatives.