© Reuters. FILE PHOTO: High-rise buildings under construction are seen at dusk in Tokyo, Japan November 30, 2023. REUTERS/Issei Kato/File Photo

TOKYO (Reuters) -The price of new apartments in Tokyo during 2023 averaged more than 100 million yen annually for the first time ever, pushed up by rising labour and construction costs as well as an influx of foreign investors on the yen’s slide to a multi-decade low.

The average price of newly built apartments in Japan’s capital rose 39.4% from the previous year to a record 114.8 million yen ($778,041) in 2023, the Real Estate Economic Institute said on Thursday.

After weathering decades of deflation and stagnant growth, Japan is seeing an investment boom both in property and stock markets.

On top of Japan’s low interest rates, the apartment price surge is being driven by foreign buyers taking advantage of the weak yen, now near a 33-year low, and those looking to shift funds out of China, where a real estate crisis and geopolitical concerns are putting a chill on investment.

The 114.8 million yen price tag means an apartment in Tokyo now costs about 25 times the country’s nationwide salary average of 4.6 million yen ($31,175.87).

In 2023 alone, the Tokyo metropolitan area saw over 4,000 units of over 100-million-yen luxury apartments being offered, including Mita Garden Hills in central Tokyo, where a 376.50 square-metre (4,052 square feet) unit sold for 4.5 billion yen.

As buyers have begun looking for apartments outside red hot central Tokyo, prices also rose in the greater Tokyo area, where the average apartment price climbed 28.8% to 81 million yen, also a record, the report said.

($1 = 147.5500 yen)

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