Quick real estate news summary for the week

Hiroshima welcomes the region’s tallest apartment tower, housing starts drop in July, and a new flight route in Tokyo upsets tenants. Below is a quick weekly summary of some of the recent goings-on in the Japanese real estate market.

Hiroshima high-rise reaches completion

The tallest apartment building based on floor count in the Chugoku, Shikoku, and Kyushu regions has reached completion. The 178-meter tall, 53-story ‘hitoto Hiroshima The Tower’ is located in downtown Hiroshima and 1.8-kilometers south of the Peace Memorial. Sales of the 665 apartments began in April 2018, with 80% of the units sold as of August 2020.

Housing starts drop 11.4% in July

In July, nationwide housing starts dropped 11.4% from the previous year to 70,232 units. This is the 13th month in a row to see a year-on-year decline. According to the Ministry of Land, Infrastructure, Transport and Tourism, owner-occupier builds dropped by 13.6% to 22,708 units, while condominiums and developer-built detached homes dropped by 11.8% to 19,359 units. Rental housing starts fell for the 29th month in a row with an 8.9% drop to 27,684 units in July as banks continue to tighten lending on whole-building investments. The average house size was 78 sqm, 5% smaller than last year. Housing starts in the Tokyo metropolitan area were down only 0.5% from last year. Okinawa saw the biggest year-on-year drop with housing starts falling 36.8%. 

New flight route upsets tenants

Haneda’s expanded flight routes began this March, with aircraft flying over central Tokyo during the afternoons depending on wind and air traffic congestion. But even with noticeably fewer planes in the air due to the pandemic, some residents under the flight paths are finding the noise higher than expected. According to Harbor Business Online, a realtor near Oimachi Station reported two tenants moved out of their apartments in April due to noise, while some prospective tenants walk away after checking the noise levels for themselves. The area around Oimachi Station now sees aircraft flying as low as 300 meters on their descent to nearby Haneda Airport. One analyst suggests the new flight route has already curtailed any property value increases in the Shinagawa area and noted that one high-rise apartment tower has seen units on the highest floor, which are just 150 meters below overhead aircraft, drop in price by around 5%.

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