Housing/Real Estate Industry Data: July 2026 Release

First-page research excerpt

Not for redistribution without written consent of Morgan Stanley

M

Update

July 31, 2026 04:00 PM GMT

Real Estate | Japan

Morgan Stanley MUFG Securities Co., Ltd.+

Toshiyuki Anegawa

Equity Analyst

Housing/Real Estate Industry

Data: July 2026 Release

Office market conditions continue to improve, and fundamentals

remain solid across leasing, development, and property sales. If

results from major developers confirm resilience of the business

environment, we expect concerns about rising interest rates to

ease and real estate stocks to be re-evaluated.

Real Estate

Japan

Industry View

Housing

Japan

Industry View

In-Line

Key Takeaways

Office vacancy rate in Tokyo’s 5 central wards declined to 1.99% in June; average

asking rent rose to ¥22,993 per tsubo per month (+0.6% MoM, +10.1% YoY).

Average price of new condo in Tokyo metro area was ¥101.37mn (+10.6% YoY);

average price in Tokyo’s 23 wards was ¥130.13mn (-1.5% YoY).

Tokyo Kantei data show used condo prices (Tokyo’s 23 wards) dipping to

¥127.41mn (-0.8% MoM). Slowdown in speculative resale demand is now clearer.

Share price performance: In July, real estate stocks (TOPIX Real Estate) slightly

outperformed TOPIX, while the Nikkei Average underperformed TOPIX, meaning

real estate stocks significantly outperformed the Nikkei Average on a relative basis.

J-REITs performed even more strongly, supported by preference for defensive

characteristics and dividend yields, and outperformed both TOPIX Real Estate and

TOPIX ( Exhibit 9 ). We believe the main drivers were moderation in the pace of

long-term interest rate increases and growing correction in high-tech stocks such as

electrical devices, which had led the market. This encouraged a rotation of funds

into real estate stocks and J-REITs, where valuation looks attractive.

Outlook: April–June earnings announcements have started, and so far, results from

Hulic and Nomura Real Estate Holdings have contained no particular surprises and

were generally neutral, in our view. In real estate, quarterly profit progress can

fluctuate depending on the timing of property sales and deliveries, but we believe

fundamentals remain solid across leasing, development, and property sales.…