In Japan's housing market, there has always been one verity: Certain parts of Tokyo will always be popular and, therefore, profitable for developers. However, according to various media reports, that verity may have collapsed, at least when it comes to new condominiums.

In its Sept. 17 issue, the weekly magazine Shukan Gendai ran a long report on real estate in Setagaya, which is probably the most desirable of all the city's 23 wards. According to the article, the common wisdom is that "whatever is built in Setagaya can be easily sold," and that in the past, new condominium complexes would sell out as soon as they went on sale, well before construction even started. Developers, in fact, count on selling out since it gives them a financial guarantee to proceed with construction.

But in the last year there have been a number of new condominium buildings that have not sold out immediately. Even worse, there are unsold units even after people had started moving in. Of the 35 condominium complexes in Setagaya that opened to owners in July, 23 still have unsold units. One real estate journalist told the magazine that in his 30 years of covering the housing market, it is the first time this has ever happened. He estimated that about 10 percent of all the new units in these buildings remain vacant. Consequently, the developer is desperately trying to sell these units while keeping a low profile, since other homeowners in the building could become angry if they discover the apartments are being sold at prices lower than what they paid.