Shizuoka’s hot spring resort city of Atami is seeing renewed interest from buyers looking for holiday homes they can telework from. Local agents have been seeing a rise in inquiries from potential buyers from the summertime onwards.
The Atami branch of the Mishima Shinkin bank noticed an uptick in inquiries about home loans from May from people living in the greater Tokyo area. A realtor in front of Atami Station reported that the majority of their customers up until now were in their 60s and older, but they are now seeing more customers in their 30s and 40s who began teleworking during the pandemic. They had 2.5 times as many inquires in October 2020 compared to October 2019, while properties are selling for 1.5 times what they would have sold for 4 or 5 years ago.
There are some limitations, with one agency remarking that the people buying due to the telework trend are looking for a place they can work from without distractions, rather than families looking for a family-sized home. Because it is a niche buyer, the trend is likely to continue for another six months or so, but is not expected to be a bubble that would last 3 or 4 years. Demand from families is not likely to arise due to the lack of schooling options. The city is primarily tourism driven and less suited for young families.
In October, the city had no change in population, but recorded a net inflow of 19 residents in November as 131 residents moved out and 150 residents moved in.
This is nothing new for the beachside locale with it’s Shinkansen station making it just a 38-minute direct trip from Tokyo. In the 1970s and 1980s it flourished as Tokyo residents bought resort apartments and holiday homes to use on weekends, with some even living full time while commuting into Tokyo. Having the existing transport infrastructure in place, while also being within an hour of Tokyo is key to the popularity of regional areas whether from a tourism perspective or a housing perspective. Even Atami has struggled in recent years as the town’s hotels and shopping arcades age and lose their luster.
Resort apartments come with all sorts of risks that buyers must be aware of before purchase. They were developed to compete with hotels, and often had extensive amenities not found in regular apartment buildings, such as hot spring baths that pump in piping-hot onsen water, which come with enormous maintenance costs which are passed onto the apartment owners in the form of some very high monthly building fees. The buildings are often 40 ~ 50 years old and, as a building ages, will require more costly repairs that the owners must pay for. They can also lack high-speed internet access. Absentee owners or owners who have fallen behind in building fees are more common, leaving the general operation and maintenance of these buildings in the red. For these reasons, they can be priced as low as 1.5 million Yen (approx. US$15,000), and even go for 10,000 Yen (US$100) at foreclosure auctions. More importantly, some resort apartments do not permit full-time occupancy.
Source: The Shizuoka Shimbun, January 5, 2021.
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