Tokyo Kantei released a report on the market values of ‘vintage’ apartment buildings and their retain or lose value over time. This year’s survey was a follow up to the last survey carried out in 2009.
Based on their findings, the vintage properties most likely to see values erode over time were:
1. In buildings over 40 years old;
2. With low earning potential; and
3. Located outside of the Yamanote Line.
40 year+ buildings have the highest risk of losing value
Of the surveyed properties that held their value over time, 91.8% were in buildings less than 40 years old.
Of the vintage apartments that saw a drop in value, 26.7% of them were in buildings over 40 years old. Older buildings, particularly those dating from the 1970s and earlier, may be built to older earthquake codes, tend to require costly maintenance and repairs since they may have ageing plumbing, will require elevators to be replaced and are generally getting towards the end of their useful service life. These factors are the main contributors to their declining value.