Quick real estate news summary for the week

There are numerous news reports and opinion pieces published every day discussing the impact that the pandemic is having on Japan’s real estate market. We thought we would share some summaries below to give an idea of what’s been happening recently.

Joint home loan borrowers at risk

On May 30, News Post Seven ran an opinion piece by a housing journalist who suggests many buyers of new high-rise apartments in Tokyo Bay who have purchased with combined home loans may be at a higher risk of default. Potential corporate restructuring or a reduction of wipeout of summer bonuses could see already-stretched borrowers struggle to make repayments. Japanese home loans are often structured to include a larger repayment during salary bonus season. 

Central Tokyo high-rise apartments to become a thing of the past

An article in Bunshun Online on May 19 suggested that with companies starting to accept the concept of remote work, having one’s home close to the office may become less of a priority. The author suggests that office workers renting apartments in expensive high-rise towers in central Tokyo might decide to move somewhere out of town where they can enjoy their hobbies, such as surfing, or places that provide better child-rearing and lifestyle options.

Four Seasons Kyoto Sold

On June 4, the New Straits Times reported that the Four Seasons Kyoto hotel was sold for 50.79 billion Yen (incl. consumption tax), or approx. US$460 million. This is lower than the original estimated sale price of US$700 ~ $800 mentioned in a December 2018 media conference.

77 days to find a tenant

Tokyu Housing Lease reported on May 29 that it took an average of 77 days to find a tenant for a vacant apartment in greater Tokyo in the first quarter of 2020. This is an increase of 10 days from the first quarter of 2019. The coronavirus pandemic is seeing little movement in the rental market as tenants stay put.

A switch to telecommuting cuts office overheads

ITmedia ran a piece on May 25 about companies that are getting rid of their office space altogether as they switch to remote work. A researcher suggested one of the leading reasons for this trend may be due to the significant cost benefits of having all staff work from home. The trendy, but expensive office rent, office equipment lease fees and other sundry expenses can be eliminated when no one needs to go to the office anymore.

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