Rising construction costs causing suburban projects to be cancelled
- Apartment developments cancelled.
- Station-front redevelopment projects on hold.
- Slowdown in retail expansion.
Japan’s construction industry is facing an impending crisis as the construction boom brought about by the 2020 Summer Olympics and Tohoku reconstruction is causing construction costs to rise dramatically.
The rising costs and severe labour shortage is having a direct impact on apartment development in the greater Tokyo area.
In April, the Odakyu Electric Railway Company announced that they were cancelling their plans to develop a high-end residential neighbourhood on the site of the former Mukogaoka Amusement Park in Tama-ku, Kawasaki due to rising construction costs which no longer make the project profitable.
Other apartment developers are also taking a restrained approach. Some that have already acquired development sites are either holding off on construction, leaving the sites empty, or are changing their plans.Read more
More borrowers choosing full-term fixed rate home loans
According to the latest survey by the Japan Housing Finance Agency, the percentage of borrowers choosing a fixed interest rate for the entire duration of their home loan was 31.7% between November 2013 and February 2014, up 6.4 points from the previous period and up 8.6 points from the same period last year. The percentage of borrowers electing for a floating interest rate dropped 4.2 points from the previous period to 37.1%. Read more
Vacancy rates by apartment building in Tokyo - July
The following is a list of popular apartment buildings in Tokyo and their estimated vacancy rates in July:
About the data:
- Vacancy rate = The number of apartments currently advertised for rent in that building as a percentage of the total number of apartments in the building.
- These figures are estimates only and Japan Property Central does not guarantee that they are 100% accurate. The data may include apartments that have already been leased but are still being advertised, and may not include apartments that are available for rent but not advertised publicly.
- In recently completed buildings you may see a large number of apartments up for rent in the first few months after completion. This indicates that a lot of the apartment buyers were investors, or that a large number of apartments were given to a landowner/s as part of the redevelopment. It may take a few months before these apartments are rented out.
Secondhand apartment prices in June - Tokyo Kantei
According to Tokyo Kantei, the average asking price of a 70 sqm (753 sqft) second-hand apartment in Tokyo’s 23 wards was 41,630,000 Yen in June, down 0.3% from the previous month but up 4.8% from last year. This is the first time in 7 months that prices have fallen from the previous month, although they continue to remain above 2013 levels. The average apartment age was 22.0 years.
In central Tokyo’s six wards (Chiyoda, Chuo, Minato, Shinjuku, Bunkyo and Shibuya), the average apartment asking price was 57,570,000 Yen, down 0.1% from the previous month but up 7.7% from last year. The average apartment age was 22.0 years.
The average price across greater Tokyo was 28,310,000 Yen, down 0.4% from the previous month but up 2.2% from last year.Read more
Tottori's 2nd largest city cannot afford to maintain its public buildings
Yonago City in Tottori Prefecture is facing a looming crisis as the city’s finances cannot cover the growing maintenance bill required for its ageing public buildings.
It was estimated that the maintenance and reconstruction costs for its 1,282 city-owned buildings would amount to 215.4 billion Yen (2.1 billion USD) over the next 40 years.
No progress made in faulty building in Yokohama
It has been a month since news came out about a 11-year old apartment building in Yokohama that was starting to tilt due to a construction mistake.
The building’s owners association have been fighting with developer, Sumitomo Realty & Development, for several years over the issue. Last month it was announced that Sumitomo had asked the residents to move out and are in the process of arranging temporary accommodation.
Built in 2003, Park Square Mitsuzawa Koen is a five-building complex containing 262 apartments. Three years after completion, residents noticed that the guardrails in the hallway connecting one building to the other were out of alignment and cracks had formed where the rails were joined together. Sumitomo insisted that this was just a result of absorbing shocks caused by earthquakes. The owners association only found out that one of the buildings was leaning after carrying out an investigation during large-scale maintenance and repair work in 2013. Sumitomo again insisted that the building was safe and that there was no problem. They also said that any repair costs should be borne by the apartment owners. Read more