Summary of Research Findings

Many real estate developers increased their sales in FY2024 due to strong condominium sales, favorable office building rents, and high hotel room occupancy rates.

Specifically, the robust demand for residences in urban areas primarily from dual-income households drove strong condo sales. Favorable office building rents are due to a rebound from the pandemic-induced shrinking office supply, causing an accelerated return to commuting. High hotel occupancy rates are due to the recovery of inbound tourism demand. Other factors have also boosted real estate developer sales, such as the robust real estate market causing increased gains from asset sales.

Noteworthy Topics

Soaring Construction Costs Are Affecting Real Estate Development in Various Ways

In recent years, rising material and labor costs are boosting construction costs. This has affected real estate developers and their projects in various ways. For example, developers have reevaluated existing projects and altered their criteria for selecting new ones. They have begun to focus on more profitable asset types.

Consequently, some unprofitable or uncertain projects have been postponed or suspended.
Conversely, developers have begun concentrating on assets that have the potential to generate relatively high profits. Specifically, they are eager to develop high-grade offices and luxury condominiums. 

Research Outline