The Nikkei Shimbun newspaper ran a recent article going over all of the issues with the government’s attempt to create more transparency and accessibility with real estate data. Anyone who has worked in Japan’s real estate industry or attempted to conduct market research will be well aware of just how little data is available, paid or otherwise.

Despite the efforts of the government to create more openness with the data, there is a lot of heavy pushback from the real estate industry who benefits more from having this data off-limits to the general public. 

In Japan, licensed agencies have access to the REINS database to add listings and see past recorded sales. Agencies with exclusive listing agreements only are obligated to upload those listings within 5 ~ 7 days of signing the brokerage agreement (although not all agencies choose to do so), so that all other agencies can see the listing info and share it with their potential buyers. Exclusive listing agents are also obligated to report the eventual sale price, although very few agencies do so. As a result, there is very little data being recorded. Unless the sale is reported to this database, there is no legal way to find out how much a property sold for.

In 2008, a national research group put forward the idea of creating a real estate ID, but the idea never gained any traction due to concerns over its impact on privacy laws. It’s important to know that all real estate already has its own unique ID, although it is not tied to sales data or repair history. 

In 2009, the Democratic Party of Japan proposed making it illegal for a single real estate agency to collect brokerage fees from both parties in a transaction. They were met with absolute outrage from the real estate industry and abandoned their proposal.

Between 2015 and 2016 the national government started a trial run of a comprehensive real estate database but gave up due to a lack of cooperation from the real estate industry.

In September 2021 the national government established the real estate ID investigative commission. The goal is for the ID system to create more liquidity in the secondhand real estate market by having all sorts of information on a property tied to its ID number, such as past sales, repairs by contractors, and so on. With 13 years of false starts, it remains to be seen whether the latest attempt will be enough to strike a balance between creating an open and fair market for consumers and appeasing real estate brokerages. 

It is no wonder that JLL ranked Japan 38th worldwide in terms of transparency for real estate transactions – the bottom of the list for developed nations. 

Source: The Nikkei Shimbun, November 29, 2021.

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