Diversification of the condominium supply in central Tokyo: Supply strategies of "compact" condominiums

Abstract

This study aimed to clarify how the features of the supply strategies of condominium developers reflect the diversification of both household structure and housing demand in central Tokyo. As part of the study, representatives of the "major seven" developers were interviewed and data on condominium supply were analyzed. From the late 1990s, various types of condominiums have been available in central Tokyo. In particular, the supply of "compact" condominiums, which feature small living spaces like the studio type, has increased. The major seven developers have started to supply compact condominiums since 2002; the majority of these condominiums are occupied by single women. Since the beginning of the 2000s, households comprising singles in their 30s and 40s, when home ownership in Japan peaks, have begun moving into central Tokyo. The owner occupation of such small-sized households was thought to be accelerated by the supply of compact condominiums. From around 2005, however, the condominium market has witnessed a decline, and the average price of condominiums exceeds the budget of single women. In addition, during the same period, central Tokyo was reevaluated as a residential area, and thus its popularity among nuclear families, single men, and young and elderly couples increased. Therefore, some developers preferred to build super high-rise condominiums for single men or nuclear families. Each of these projects consist of more than 100 housing units; apart from compact housing units, these projects include units comprising various types of apartments. Under these circumstances, the major seven developers adopted different supply strategies for compact condominiums. First, a branding strategy was preferred by some developers who mainly sold luxurious condominiums in central Tokyo. These developers established brands that corresponded to the income, household size, and residential preferences of the residents. Second, some developers preferred to provide affordable compact condominiums in surrounding wards in Tokyo. They did not establish specific brands for compact condominiums, but originally preferred to build in surrounding wards in Tokyo. They then discovered housing needs for compact condominiums in their market areas and started selling compact condominiums. Due to the implementation of these supply strategies by the major seven developers, condominium supply in central Tokyo diversified. We plan to examine topics related to this study, such as choice of residence and residential segregation in central Tokyo, in the near future.