Hiramatsu to open new hotel in Karuizawa, 1 million Yen on offer if you relocate to the countryside, and real estate companies expect pandemic-related conditions to continue for next few years. Below is a quick weekly summary of some of the recent goings-on in the Japanese real estate market.

Hiramatsu to open hotel in Karuizawa

Restauranteur and wedding function company Hiramatsu will be opening a luxury hotel in Karuizawa in March 2021. The Hiramatsu Karuizawa Miyota sits on a private site of 15 acres on the foothills of Mt. Asama. There will be a 28-room hotel, along with 9 self-contained villas. Rooms range in size from 79 ~ 132 sqm (850 ~ 1,420 sq.ft). Nightly rates are expected to start from 58,000 Yen, including breakfast. In 2015, Hiramatsu announced plans to enter the luxury hotel business with the formation of Hiramatsu Hotels & Resorts. The Karuizawa hotel will be their sixth property.

Government offers ¥1 million in coupons to get Tokyo residents to move to the countryside

The national government is trying to incentivize residents of Tokyo’s 23 wards to make a permanent move to the countryside by offering up to 1 million Yen (approx. US$9,600) in various coupons and points that can be exchanged for home electronics and other goods. It doesn’t come without a few catches. It may only apply to those who buy a newly-constructed energy-efficient home, although there are discussions to extend the offering to older homes that don’t meet current energy conservation standards. The government may even extend the program to people who don’t relocate but instead renovate their existing home to make it more telework-friendly.

Apparently, the pandemic hasn’t been enough to sway Tokyo residents to leave for the greener pastures of Japan’s countryside. If anything, this program is said to be a last-ditch attempt to revitalize the rapidly aging and declining rural towns that miss out on urban economic prosperity. Between 2017 and 2018, 22 “LO-Katsu Project” (Local Job Hunting) seminars were carried out in Tokyo to help connect Tokyo residents looking to relocate and find jobs in rural areas. The Tokyo Shimbun newspaper reported on November 19, 2020, that as many as 70% of the attendees at these seminars were paid seat-fillers, over-inflating the true interest. In some seminars, 10 of the 11 attendees were paid to be there.

Two-thirds of real estate-related companies expect negative conditions to continue for 1 ~ 3 years

The Japan Real Estate Institute conducted a survey of 136 companies (asset managers, real estate developers, insurers, banks and rental managers) in early October to understand how they are being impacted by the prolonged pandemic. 37.5% of respondents indicated that they are currently negatively impacted and are expecting these conditions to continue for another year. 27.9% said they are negatively impacted and expected conditions to continue for the next 2 ~ 3 years. 10.3% reported no negative impact. In terms of when they expect the coronavirus to be under control, 33.1% predicted Autumn or Winter of 2021, while 33.8% expect that it will take 2 ~ 3 years. Note: This survey was carried out before the recent vaccine announcements.

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