Tokyo Used Condo Prices Fall for First Time in 28 Months as Mortgage Rates Rise

Used condominium prices in Tokyo declined in August for the first time in more than two years, as rising mortgage rates weighed on buyer sentiment, Tokyo Kantei Co. said. The average price of condos in Japan's capital fell 0.2% from the previous month to ¥112.74 million ($714,000), the first drop in 28 months, the research firm said in a report released Thursday. Prices in Tokyo's six central wards fell 0.7% month-over-month, the fourth consecutive decline, adjusted to represent 70-square-meter units. Mortgage costs are climbing as the Bank of Japan raises interest rates and signals further credit tightening. The Financial Services Agency has said it will strengthen oversight of real estate lending amid concerns that Tokyo property prices are overshooting, driven by domestic and international investors chasing capital gains. "Price adjustments for properties in central Tokyo are expected to continue toward the end of the year," said Masayuki Takahashi, senior principal researcher at Tokyo Kantei, adding that similar movements will spread to surrounding areas.