Will 2014 be a seller's market for Tokyo real estate?

The Tokyo apartment market is showing all the signs of shifting towards a seller’s market in 2014.

What defines a seller’s market will vary depending on who you talk to, but many suggest it is when there is 3 ~ 9 months of inventory remaining on the market. Other conditions include:

  • More buyers than properties for sale? Yes
  • Prices are rising? Yes
  • Inventory is falling? Yes
  • Discounts are shrinking? YesRead more

by Zoe Ward

Japanese insurance companies strengthening real estate investment

With Japanese government bond yields on a downwards trend, major insurers have been turning their focus towards investment in real estate and infrastructure projects.

The Dai-Ichi Life Insurance Company has joined forces with Goldman Sachs Asset Management to acquire a number of rental apartment buildings across Tokyo. They recently purchased six buildings for 12 billion Yen (118 million USD) and plan to spend as much as 100 billion Yen over the next few years on additional acquisitions.Read more

by Zoe Ward

How Japan's current property market differs from the 2007-2008 mini-bubble

In 2013, Japan’s real estate market began to awaken after a long slumber. This was later confirmed in March 2014, when the latest data on assessed land values (chika-koji) showed that commercial and land values in Tokyo, Osaka and Nagoya rose for the first time in six years.

Many real estate experts are suggesting that the real test, however, will be whether Lone Star Funds can offload the Meguro Gajoen banquet facility in Tokyo for the minimum asking price of around 110 billion Yen. Recent reports suggest that the Government of Singapore Investment Corporation are close to acquiring the property for 134 billion Yen.

Tokyo’s leading indicator of a market recovery can be seen in the Ginza district. With an assessed land value of 29,600,000 Yen per square meter, the land underneath the Yamano Music Ginza Store is the most expensive commercial land in Japan. It increased in value by 9.6% from the year before. Five of the ten commercial land survey sites with the highest gain in land values were located in Ginza.Read more

by Zoe Ward

Govt wants cheaper accommodation for foreign tourists

The Japanese Government is working towards making it easier for vacant apartments in urban areas to be let out as cheap short-term rentals to foreign tourists. The target areas lie within the recently announced National Strategic Special Zones. 

The goal is to provide cheaper accommodation options for foreign visitors which will encourage them to stay longer.Read more

by Zoe Ward

Earthquake insurance premiums set to rise by as much as 30%

From July 2014, earthquake insurance premiums are set to rise by an average of 15.5% across Japan, with some areas seeing a price hike of as much as 30%.

The reason for the increase is due to expectations of another major earthquake that could affect the country in the future. Following the 2011 Tohoku disaster, insurers were left with nearly 1.2 trillion Yen  in claims. This has severely drained the reserve fund. Read more

by Zoe Ward

Can the Olympics facilities withstand an earthquake?

Toyosu tsunami hazard sign
A tsunami hazard sign in Toyosu

A recent estimate by a  government panel in late 2013 reported that a magnitude-7 earthquake directly under Tokyo could destroy as many as 610,000 buildings in Tokyo and the neighbouring three prefectures. 70% of the affected buildings could be destroyed by fires that quickly spread through densely packed neighbourhoods.

Many of the Olympic events are centred around the islands in Tokyo Bay. While they may be spared from the risk of fire due to the open space, these man-made islands can suffer damage from liquefaction and are even at risk of being submerged by a tsunami. A working group from the Cabinet Office's Disaster Management Group are requesting that urgent measures be taken to reduce the risk of any damage and to make sure that the Olympics can be held without disruption.Read more

by Zoe Ward

March rental data - Tokyo Kantei

According to Tokyo Kantei, the average monthly rent of a condominium apartment in greater Tokyo was 2,601 Yen/sqm in March, up 1.5% from the previous month and up 2.4% from March 2013. The average apartment size was 59.50 sqm and the average building age was 18.5 years.

The average rent in Tokyo’s 23-ku was 3,191 Yen/sqm, up 1.3% from the previous month and up 3.6% from last year. This is the fifth month in a row where the average rent has increased from the previous month. The average apartment size was 56.40 sqm and the average building age was 16.7 years.Read more

by Zoe Ward