Behind Tokyo’s brisk resale market for apartments
The second-hand apartment market in Tokyo continues to grow with the average asking price of a 70 square meter apartment in the Tokyo metropolitan area reaching 48,090,000 Yen in August 2016, up 10.5% from the previous year. In Tokyo’s 23 wards, the average price increased by 8.5% over 12 months to 52,790,000 Yen.
Ebisu Garden Terrace Ichibankan, a 32-storey, 290 unit tower south of Ebisu Station, is a prime example of capital appreciation. In late 2015, an apartment on a high floor sold for 2,194,000 Yen/sqm, making it the highest resale reported in this building in the past 27 years, and similar to the current price of brand new apartments. Sale prices slumped to a low of 1,300,000 Yen/sqm in 2013, but increased to 1,670,000 Yen/sqm in 2015 (up 48%). Recent prices have exceeded previous prices last seen in the mini-bubble in 2007. Despite having 290 apartments, there were just two listed for sale in October 2016, with asking prices ranging from 1,640,000 ~ 1,790,000 Yen/sqm.Read more
Investors finding success with Kyoto's traditional machiya
Kyoto’s traditional machiya townhouses are a popular commodity with domestic investors looking to profit from the booming tourist industry.
Machiya are appealing for their charm and character which cannot be easily replicated in new construction. The traditional architecture and relaxing interiors are also a major drawcard for tourists travelling in families or groups.
The age of these old properties also has tax benefits. Brand new construction may have a useful life for tax depreciation purposes of 20 years or more, but with an older property, the depreciation can be amortised over just 3 ~ 4 years in some cases. For an investor with a high annual income, this could allow them to reduce their tax burden.
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Faulty apartment building in Yokohama to be demolished next year
Last month, two years after the building was found to be tilting, the owners association of a condominium complex in Yokohama voted in favour of redevelopment.
In October 2015 it was announced that several of the foundation piles in one of the buildings were not sunk deep enough to reach bedrock and a 2 cm difference in height had developed between the buildings. Residents were assured by the developer that the building posed no immediate risk and still met earthquake-resistant standards. However, further inspections found that the building would not withstand an earthquake producing a seismic intensity of 5+ or higher. In August 2016, Yokohama City issued the developer with a correction order under the Building Standards Act.
The 12-storey condominium was built in 2007 and contains over 700 apartments.
Demolition of all four blocks in the complex, including the one that has already started to show signs of tilting, will start as early as April 2017. It will be replaced by new buildings which should be ready for residents to move into from late 2020. The developer will bear the 40 billion Yen (390 million USD) cost of redevelopment.
Under the Condominium Unit Ownership Act, 80% of owners must vote in favour in order to redevelop a condominium. In this particular case, 99% of owners were in favour of rebuilding. Those that were not in favour will be forced to sell their apartments to the owners association, as outlined under the Act.
It is likely that the redevelopment committee will select a different developer to carry out the reconstruction, rather than the original developer. Apartment owners who plan to move into the new building will be provided with temporary housing in the meantime. In addition to shouldering the cost of redevelopment and temporary accommodation, Mitsui is providing each household with 3 million Yen in compensation.
Sources:
The Nikkei Shimbun, September 19, 2016.
The Tokyo Shimbun, September 20, 2016.
Restauranteur planning big expansion into luxury hotel business
Hiramatsu, a famous French and Italian restauranteur, announced bold plans for their newly created hotel brand.
In July, they opened The Hiramatsu Hotels & Resorts Kashikojima in Mie Prefecture. The small-luxury resort has just 8 guest suites and is targeted towards wealthy individuals with a net worth of over 100 million Yen. Room rates, which include meals prepared by renowned chefs, range from 65,000 ~ 80,000 Yen/night (640 ~ 790 USD) per person. The hotel was fully booked for the months of July and August, and reservations for 2017 are already starting to fill up. Currently the restaurant in the resort is only open to hotel guests, although they are considering opening it up to non-guest bookings.Read more
Tokyo Apartment Sales in September 2016
The following is a selection of apartments that were sold in central Tokyo during the month of September 2016:Read more
Kyoto City trying to clear up ownership of its two biggest streets
Some of the land under Kyoto’s two biggest streets, Gojo Dori and Horikawa Dori, is said to still be privately owned by various individuals. According to the city, approximately 166 land titles covering a total area of 10,000 square meters underneath both Gojo and Horikawa streets are still in private names, representing about 1% of the total street size.