If buying a property in Tokyo for an investment – the city’s population trend/forecast and its relation to housing market are something that should be treated as a part of core interest for an investor. The gist – it seems Tokyo’s population projection, as well as the housing supply seems quite promising.

Sumitomo Mitsui Trust Research Institute, a think tank specialized in real estate market, released an analysis paper that examines the topic.

(On this article, Tokyo population is defined as inner Tokyo – Tokyo 23 wards ONLY.)

Findings are:

1. Tokyo’s population on consistent rise
Albeit Japan’s population peaked out in December 2008, Tokyo’s population has been increasing consistently from 1995. This is due to the fact that there is a greater influx of population from other parts of Japan to Tokyo.

Tokyo’s population once peaked out in 1968 (8.91 million) and it followed downward trend. But revamp from 1995 is now exceeding the 1968 figure – as of March 1, 2015, the population is 9.15 million.

2. Housing supply rate greater than population increase rate
“Increase” factor is not limited to population – so does the housing supply. In Tokyo, a rate of supply in housing unit is greater than the population. From 1968 to 2013, while Tokyo added  2% (140,000) of population, its housing supply surged from 2.51 million units to 5.25 million units units, or 109%.

Related: Tokyo Plans to Add 6,000 Residential Units After the Olympic Games

Image from Sumitomo Mitsui Trust Research Institute research paper

Related: Japan Apartment Rent Prices Index For 2014Q4

Main image: Sean Pavone / Shutterstock.com