TOKYO (REUTERS) - Prices of newly-built apartments in the Tokyo area rose 1.7 per cent last year, approaching the record highs seen during Japan's asset-inflated bubble era that ended in the early 1990s, the country's Real Estate Economic Institute said.

Higher construction costs due to preparations for the Olympics and popularity of high-rise condominiums in formerly industrial waterfront areas helped drive the average apartment price up to 60.84 million yen (S$778,550), the highest since 1990 when it reached a record 61.23 million yen.

The most expensive unit was a 690 million yen (S$8.83 million) condominium in Daikanyama, the real estate data and consultancy firm said.

The number of sales fell 12.8 per cent from a year earlier to 27,228 units, however, down around 70 per cent from 1990 levels.

Real estate website Suumo said in a report last week that low interest rates and tax breaks helped sustain property demand amid the coronavirus outbreak.

Unlike people in other big cities such as New York which saw an exodus to the suburbs during the coronavirus pandemic, Tokyo residents appeared more interested in moving to new developments in central locations to reduce their commuting times, it said.

The Tokyo stock market's Nikkei 225 average rose around 16 per cent last year.