Using property-level inquiry volume to quantify demand–supply balance for existing houses: the case of the resale condominium market in Tokyo

Purpose - Houses are durable, so an imbalance between demand and supply occurs after time has passed since initial construction. The purpose of this study is to quantify the extent of this imbalance for existing houses, focusing on the heterogeneity across property segments. Design/methodology/approach - This study uses a unique data set on the “inquiry volume” that each property received from an online real estate portal to measure the volume of demand in relation to supply. Simple regressions are conducted in the resale condominium market across the Tokyo metropolitan area. Findings - The inquiry volume successfully tracked a recent expected trend in which demand relative to supply is stronger for condominiums in reasonably priced areas, condominiums in convenient, accessible locations, condominiums built within the last 20 years and compact and spacious units. This study also confirms that these trends cannot be captured through heterogeneity in price levels, which has been widely used in previous studies on measuring housing preferences. Practical implications - As an indicator of conditions in the housing market, the property-level inquiry volume has strong potential to provide useful information for supply strategies and for the sustainable use of existing housing stocks. Originality/value - The originality of this paper is the use of information on the buyer side, which is typically unobservable.