Kyoto to demolish 1 billion Yen EXPO 92 relic

The Danish Pavilion built for EXPO 92 in Seville and relocated to Japan in 1993 may be demolished early this year.

The pavilion was designed by Knud Holscher of KHR Architects AS and Erik Reitzel and debuted in Spain in 1992.  The town of Tanba (now part of Kyotamba town) purchased the building for approximately 1 billion Yen (about 9 million USD at the time) as a symbol for cultural exchange between the two countries. It was shifted to Tanba to a site that the then-mayor was planning to convert into the Kyoto Denmark Park. The ambitious project was considered ground-breaking but quickly turned into a white elephant.  The plans never eventuated after the mayor was caught up in a corruption scandal. The following economic malaise of the 1990s sealed the project’s fate. 

Kyoto property prices pushing younger buyers out of town

Recent population data provided by Kyoto City is showing a growing trend of younger residents moving out of the city to surrounding districts. If this trend continues, the city could see a net outflow of residents in the 30-year old age bracket.

The average price of an apartment in the city in 2016 was about 20 ~ 50% higher than the top 10 cities that these younger residents are moving to, leading some to say that Kyoto has become unaffordable for the younger generation. With surging hotel development creating a shortage of residential development sites, the average apartment price in central Kyoto has reached around 1,000,000 Yen/sqm (approx. 835 USD / sq ft), close to double the price in other districts. In 2016, Kyoto City was the second most expensive district in Japan, second to Tokyo, for new apartments with an average price of 52,960,000 Yen.

Supply of new apartments in greater Tokyo to increase in 2018

According to a forecast by the Real Estate Economic Institute, a total of 38,000 brand new apartments are expected to be released for sale across greater Tokyo in 2018, up 4.4% from 2017 and the second year in a row to see an increase. Depending on demand for buyers eager to purchase before the consumption tax rate increase in October 2019, supply could reach as high as 40,000 units.

Kyoto to see 12,000 new hotel rooms by 2020

A survey by the Kyoto Shimbun has estimated that there will be approximately 12,000 new hotel rooms supplied in the city by 2020, a 40% increase from 2015. This is 20% more than the 10,000 rooms required to eliminate the current room shortage.

The city had a total of 33,887 rooms as at the end of 2016, a 4,000 room increase from 2015. By 2020 there will be a total of 42,000 rooms. The data measured by the city does not include small-scale accommodation facilities like guest houses, which means the total could be much higher.

Kyoto’s proposed short-term letting rules to be strictest in country

On November 30 Kyoto City announced their proposed regulations for Airbnb-style short-term rentals. To provide support for complaints and emergency situations, hosts may be required to have a full-time manager stationed in an office within an 800 meter radius of the property. Hosts may also be required to submit a written oath to the city stating that they have not been operating an unlicensed BnB within the past 3 months.

These regulations will over-ride the new nationwide law set to go into effect from June 2018 that will allow overnight stays in non-hotels for up to 180 nights per year.

Real estate company reported to prosecutors for illegal BnB in Kyoto

Kyoto’s Economic Crime Investigation Division and the Ukyo Police Department have sent papers to prosecutors on a Nagoya-based real estate company under suspicion of illegally renting out a house in Kyoto City to tourists. A total of five people from the company, including the company president, are accused of acting as an intermediary for the property owner, by advertising the house as short-term accommodation on booking sites. This is a rare case where an intermediary or management company has been caught up in potential charges.

The 3-storey house was reportedly rented to foreign tourists on an overnight basis for around 50,000 Yen per night, without having any of the required hotel licenses or permissions. The house is in an exclusive residential zone, which currently prohibits any sort of hotel operations.

Kyoto City might limit some Airbnb-type rentals to just January and February months

Kyoto City has started official discussions that may see Airbnb-type short-term rentals in certain residential zones limited to just the January and February months and for no more than 60 nights in total.

Hosts looking to rent out places in primarily residential neighbourhoods in central Kyoto, including areas around Kinkaku-ji temple and Nanzen-ji temple, may find themselves limited to the off-season winter months. Under the proposal, properties located in exclusive residential zones (Category I and II Exclusively Low-Rise Residential Zones, and Category I and II Mid/High-Rise Oriented Residential Zones) may only be rented to tourists for the months of January and February, with a maximum limit of 60 nights over those two months. There may be some relaxation of the rules for hosts who live in the properties or live nearby.

Dubious development site in Kyoto finds buyer

An offshore buyer may have been found for a large block of land with an interesting history in central Kyoto.

The land is located in one of Kyoto’s leading tourist areas.  Amidst a booming tourism industry and improving real estate market, a property such as this should have buyers lining out the door to bid on it. Despite the best efforts of the seller, however, no local buyers dared come forward. The problem, as claimed by the Shukan Post tabloid, was due to the seller’s alleged ties to the North Korean regime. 

Japan’s supply of new office space hits lowest level since 1980

According to the Japan Real Estate Institute, 1.35 million square meters (approx. 14.5 million sq ft) of new office space was supplied across the country in 2016, down 25% from 2016 and the lowest level seen since 1980. 84% of the new supply was centered in Tokyo’s 23 wards.

Sapporo, Sendai, Saitama, Kyoto and Kobe saw no new office buildings supplied last year, although there are several new buildings planned for completion over the next two years. Kyoto City, however, has no new office supply planned for the near future. Kyoto is reportedly suffering from a severe shortage of office space with office brokerage Miki Shoji reporting a current office vacancy rate around 2%, down from 12% seen in 2010.