Know the basics before investing in real estate

September 15, 2014Buyer Beware!,Property Purchasing Guide,All

Lately there has been a surge in the number of real estate-related books and seminars encouraging ‘salarymen’ to invest in one-room apartments as a way of securing an extra source of income. These promotional seminars were also very popular during the bubble in the late 1980s.

As a result, real estate listing site Rakumachi, which specialises in investment-type properties, has seen the number of registered users increase by 60% to 36,672 users over the 12 months to July 2014.

Low interest rates, a reduction in inheritance tax deductions from 2015, and concerns about a stable income after retirement are causing people to turn their attention to the property market.

But before parting with several million Yen, first-time investors must make sure they are fully aware of the potential risks involved. Rather than expecting quick and easy returns,  investors also need to have a long-term outlook.Read more

by Zoe Ward

Secondhand apartment transactions down while prices continue to climb

September 12, 2014Tokyo apartment pricesReal Estate News,Market Information,All,Tokyo

According to REINS, 2,118 second-hand apartments were sold across greater Tokyo in August, down 16.4% from the previous month and down 5.9% from last year. This is the 5th month in a row to see a decline from one year prior.

The average apartment sale price across greater Tokyo was 28,190,000 Yen, up 7.4% from the previous month and up 10.2% from last year. The average price per square meter was 436,900 Yen, up 6.5% from the previous month and up 9.2% from last year. The average building age was 19.47 years.

1,003 apartments were sold in the Tokyo metropolitan area, down 18.3% from the previous month and down 9.2% from last year. This is the 5th month in a row to see a decline from one year prior. The average apartment sale price was 34,870,000 Yen, up 9.0% from the previous month and up 12.7% from last year. The average price per square meter was 587,500 Yen, up 7.8% from the previous month and up 13.1% from last year. The average building age was 18.26 years.

The average sale price in central Tokyo’s 3 wards (Chiyoda, Chuo and Minato) was 55,820,000 Yen, up 24.2% from the previous month and up 20.8% from last year. The average price per square meter was 920,200 Yen, up 0.8% from the previous month and up 11.7% from last year. The average building age was 15.38 years.

Average sale prices per square meter were up in a number of locations last month:Read more

by Zoe Ward

Development near Sengaku-ji Temple draws opposition

September 11, 2014Historic Properties,New Construction,Real Estate News,All,Tokyo

Sengakuji TokyoA proposal for an 8-storey apartment building next to the entrance to the historic Sengaku-ji Temple in Minato-ku has drawn criticism and opposition from residents due to the potential impact it will have on the landscape and character of the area.

The site in question is located next to the temple’s Chu-mon gate. A 3-storey house is being demolished to make way for a 23m tall 8-storey apartment building which will contain mostly studio apartments. The land had been purchased by a Minato-ku based developer and construction is scheduled to start in mid-September.

Read more

by Zoe Ward

Japan’s top developers by resale value in 2013

September 10, 2014Real Estate News,Market Information,All,Tokyo

Style Act Co., Ltd. (formerly Attractors Lab) published their ranking of Japan’s top developers by resale value. In top place for the fourth year in a row was Marubeni with an average resale price of 1.6% lower than new. The average resale value across all developers was -10.0%.

The data is based on the average difference in the advertised price of an apartment in 2013 vs. the average price of new apartments built from 2001 onwards. Over 38,000 apartments were used in compiling the data.

Top developers by resale values:Read more

by Zoe Ward

Residential yields and vacancy rates in Minato-ku - September 2014

September 9, 2014Rental yield in TokyoReal Estate News,Rental Market,Market Information,All,Tokyo

According to real estate listing site Homes, the average gross yield on an apartment in Minato-ku in September was 5.6%, up 0.3 points from the previous month but down 0.4 points from last year. The average gross yield across Tokyo was 7.0%, showing no change from the previous month and down 0.9 points from last year.

The vacancy rate was 9.9% in Minato-ku and 11.0% across Tokyo.

The average asking price of a secondhand apartment in Minato-ku was 804,386 Yen/sqm as of September 1, up 1.55% from last month. The average asking price for land was 1,279,090 Yen/sqm, up 0.17% from last month. Read more

by Zoe Ward

Shimbashi to lose one of its oldest buildings

September 8, 2014Historic properties in Japan,ShimbashiDemolition,Historic Properties,Real Estate News,Redevelopment & Reconstruction,All,Tokyo

Tsutsumi Daiichi Building Shimbashi 7

Shimbashi is about to lose one of its oldest buildings as the 94-year old Tsutsumi Daiichi Building is about to be torn down to make way for redevelopment.

Built in 1920, the five storey building was designed by Yunosuke Sakai and built by Toyo Concrete Kogyo. It is an early example of reinforced-concrete construction and possibly the oldest existing multi-tenant concrete building in Tokyo. Japan's first all-concrete building - the Yokohama Mitsui Bussan Building - was built just 9 years earlier in Yokohama. Sakai had assisted Oto Endo with the design of the Yokohama building.Read more

by Zoe Ward

Are the Olympics artificially pushing up property prices in Tokyo?

September 5, 2014Tokyo 2020 Summer OlympicsReal Estate News,Market Information,All,Tokyo,Tokyo 2020 Olympics

When it was announced that Tokyo would host the 2020 Summer Olympics, owners of high-rise apartments in Tokyo’s bayside area (an area will host the Athletes Village and several sporting events) were naturally excited by the news. Apartment sales offices saw a dramatic increase in demand from buyers who feel certain that the Olympics is going to push up real estate values in the area.

In an article in the Nikkei Business publication, Eugene Oki from Attractors Lab suggests that recent price rises in the bayside islands may lack the substance to continue at current rates, and urges buyers to take a careful look at the factors behind market trends.

The Olympics will bring much needed infrastructure such as sports facilities and a bus lane to the bayside area of Ariake, Harumi and Kachidoki, but the Olympic games alone are not going to be a strong enough reason for the extension of a subway or train line. Retail and other facilities that improve the quality of life will also take some time to create. As such, it is difficult to say whether the current increase in real estate prices can be maintained after the Olympics are over.

Price growth is heavily dependent on trains and subways, not buses

The biggest influence on price growth in a particular area is the development of train or subway lines. In Japan, a bus route or buss rapid transit (BRT) has rarely been shown to improve property values.

There are plans to introduce a BRT that would connect Harumi Island with the Ginza district. While access to Ginza may sound appealing, the majority of residents in the island areas need access to business areas such as Otemachi, Marunouchi, Shinagawa and Shinjuku. Rather than stopping at Ginza, a bus to Yurakucho Station on the JR Yamanote Loop Line would at least provide commuters with an easier switch to the train system.Read more

by Zoe Ward