Tokyo’s office vacancy rate hits 4%, cash bonus for anyone who moves near the Fukushima nuclear plant, and apartment rents drop in Tokyo and Yokohama. Below is a quick weekly summary of some of the recent goings-on in the Japanese real estate market.
International travel bans and a state of emergency have seen the highly tourist-reliant ski towns in Niseko and surrounding towns suffer from a steep fall in employment and a sharp uptick in vacant apartments.
A severe downturn in the retail, food, and beverage industry has led many struggling tenants to reach out to their landlords to request rent discounts. Although there are no government directives protecting tenants at this time, landlords are being encouraged to cooperate with tenant requests where possible. But, not all landlords are in a position to do so, with rental income often going towards loan repayments and property holding costs. Recently, some local cities have started offering financial support to those landlords.
The average monthly rent of a condo-style apartment in Tokyo’s 23 wards saw a slight month-on-month increase of 0.2% in April. The average rent has risen 5.8% from April 2019 to 3,855 Yen per square meter. Rents are now up approximately 29.4% from the bottom seen in late 2012.
On April 22, Daiwa House announced that they will be offering a three month rental-deferment plan to approximately 500,000 of their residential tenants. The company understands that tenants may be struggling with finances due to the economic impact of the global coronavirus pandemic and is offering this without the need for tenants to prove any proof of loss in income.
Short-term ‘minpaku’ accommodation hosts are starting to exit the short-term letting market. As of April 2020, the number of hosts that de-registered their properties topped 4,100 since the registration system was introduced in mid-2018. There are currently 25,000 registered minpaku properties across Japan.
The number of residential rental contracts signed across greater Tokyo has been on the decline for over a year now, with the effects being felt on real estate brokerages. Teikoku Databank reported 104 real estate brokerages filed for bankruptcy across greater Tokyo in 2019, up 6% from 2018.
The average monthly rent for a condominium-type apartment across greater Tokyo in 2019 was 2,886 Yen/sqm, up 4.5% from 2018. This was primarily due to an increase in rents within the Tokyo metropolitan area, while Yokohama City saw rents fall.