Archive for the ‘Housing & Real Estate’ Category

What’s in a name when it comes to real estate?

Monday, October 4th, 2010

Are you hip enough?

Are you hip enough?

Eight of Japan’s biggest real estate companies have joined forces to run a website called Major 7 (why 7 and not 8 I have no idea), which features articles about condominiums. Last summer the group conducted its annual survey to find which urban location is the one where people would most like to buy a condo if they could. For the sixth year in a row the number one answer in the Kansai region was Ashiya, which isn’t surprising. Ashiya, in Hyogo Prefecture, has always had a high-class reputation owing to the simple fact that rich people tend to live there and most of the city is located on a hill.

The most popular place in the Tokyo Metro area was Kichijoji, for the third year in a row. (For the record, the next nine preferences in descending order are Jiyugaoka, Yokohama, Futago Tamagawa, Ebisu, Hiroo, Kamakura, Meguro, Kagurazaka and Naka-Meguro) The website doesn’t explain why Kichijoji is popular, but it isn’t difficult to guess. Tokyoites see it as a youth haven filled with trendy retailers. It is also close to a famous park.

The preference is purely aspirational, especially if you look at what’s available. Most units for sale near Kichijoji Station are small, cramped and expensive. You have to go at least 18 minutes from the station before you find something that might be habitable for a family: ¥31 million for a 60 sq. meter 2LDK built in 1976 is a representative property. If you want something new, you’ll pay through the teeth. A new 70 sq. meter apartment will put you back a whopping ¥75 million. The prices are, on average, much higher than comparable units in areas closer to the center of Tokyo.

It’s completely a name thing, and realtors know that. Kichijoji is in Musashino City, and when advertising condos or even rental apartments, many real estate agents list the nearest station to a Musashino property as being Kichijoji, even if it’s much closer to, say, Mitaka. Of course, if you live in Mitaka you can always get off at Kichijoji station and take a bus home. That way you can tell your friends you live in Kichijoji, but sooner or later they’re going to catch on.

Last resorts: Vacation condos dirt cheap

Tuesday, August 24th, 2010

Yuzawa: A nice place to live but I wouldn't want to visit there

Yuzawa: A nice place to live but I wouldn't want to visit there

In 1987, the Law for the Development of Comprehensive Resort Areas was passed by the Diet. It was the height of the so-called bubble economy, when land and stock prices were skyrocketing with no end in sight. The idea was to make the development of leisure facilities a national project. Developers and local governments were given financial incentives, and property laws were relaxed so that more holiday-oriented projects could be carried out. One of the outcomes of the law was the invention of the “resort mansion,” condominium complexes that were built in areas where city folk could spend their vacations.

Many of these complexes were built near ski resorts because the late 1980s also saw a huge increase in winter sports activities. According to a recent report on TBS News, 18.6 million Japanese people took up skiing as a hobby in the late ’80s. Today, the ski demographic has dwindled to an estimated 7 million enthusiasts, and there are a lot of condominiums vacant as a result.

To illustrate the situation, TBS visited the town of Yuzawa, which is next to the Naeba ski resort in Niigata prefecture, about 1 hour and 15 minutes from Tokyo by Shinkansen. (Naeba also happens to be the host of the annual Fuji Rock Festival in the summer.) Under the Resort Law, 58 condo buildings were constructed comprising 15,000 units. TBS doesn’t say how many of these units are unoccupied year-round, but the prices have dropped so far in recent years that, as one resident said, “You can get one for less money than you’d pay for a car.”

The bulk of these residences are very small – less than 30 square meters – which means they probably hold little interest to anyone who doesn’t ski. Still, the drop in value is quite dramatic. One 28-sq.-meter unit that was built in 1989 and originally sold for ¥14 million was recently auctioned for a mere ¥40,000. In fact, that particular apartment was bought by the tenants association of the building that contained it. The association was worried that, at that price, anybody could buy it, and thus there was the possibility that the person who bought it would not be able to keep up with the monthly management fees (kanrihi) and pay the annual property taxes. The association plans to try and sell it at a higher price.

Good luck with that. The reason prices have dropped so far is that the people who own the condos no longer really use them any more. Besides being cramped, the condos are of generally poor quality, and, for whatever reason, the owners just got tired of making the trip. Most of the foreclosures have nothing to do with mortgages. Instead, the properties have been siezed because of non-payment of contract management fees and property taxes. Another 28-square-meter condo that originally sold in 1989 for ¥14 million is going for ¥310,000, but the buyer will also have to assume ¥17,000-a-month payments for management and pay ¥38,500 a year in property taxes. For a 50-sq.-meter apartment that originally sold for ¥40 million and is now worth ¥400,000, the management fee is ¥27,000 a month and the property tax ¥97,000. In some cases, people who buy used resort condos are required to cover the management fees that the previous owners didn’t pay before they can move in, thus making them that much more difficult to sell.

According to the town government, 40 percent of the resort owners (condos and besso, or second homes) in Yuzawa haven’t paid property taxes for some years, and 80 percent of these scofflaws have their prime residence in Tokyo. The problem has become so serious that Yuzawa has set up a special section in its Tokyo representative office to track down these owners and make them cough up what they owe. Good luck with that, too.

The road to digital TV is not paved with enough antennas

Friday, July 30th, 2010

Which one is the UHF?

Which one is the UHF?

Two weeks ago, the various government and private groups promoting the spread of digital terrestiral TV organized a parade to remind people that analog TV broadcasts will end in a year, on July 24, 2011. That would seem to be plenty of time to make sure everyone will be with the program, but the statistics point to a less certain future. According to a survey conducted by the Ministry of Internal Affairs and Communications last March, 83.3 percent of Japanese households now receive digital TV signals. However, an NHK survey carried out two months earlier found this number to be only 63.7 percent, and a private research company quoted in the Yomiuri Shimbun said it was “less than 70 percent.”

Why the big discrepancy, and, more important, why don’t more people have digital capability despite the fact that digital broadcasts have been available for years and the government and broadcasters have been plugging the hell out of the changeover? NHK and the commercial stations have together spent ¥1.5 trillion to convert to digital, and the nation has contributed another ¥200 billion to the project. The important thing to remember is that once the changeover happens, you can’t go back. When analog is gone, it’s gone forever, and not just because it would be cost-prohibitive for stations to revert. Manufacturers have already stopped producing analog equipment.

And when analog is gone, it could mean that up to 30 percent of Japanese households will be without TV, which is a big problem for a democracy, not to mention a country as susceptible to natural disasters as Japan is. Though most of the media attention has been on the delivery systems, meaning the flatscreen, high-definition, digital sets that have been coming down in price over the past year, the real obstacle is antennas. Analog tuners use VHF antennas, while digital tuners need UHF. Most households no longer have UHF antennas, and even those who do may not have the proper kind. Moreover, UHF antennas for digital have to be properly positioned or else the signal is useless. With analog, even if the signal is weak, you can get something on your TV. With digital, if the signal drops below a certain level, you get nothing.

Continue reading about the road to digital TV →

Annals of cheap: UR apartments to die for

Thursday, June 10th, 2010

Who ya gonna call?

Who ya gonna call?

Not to keep dwelling on the morbid, but one of the inevitable consequences of a rapidly aging society is that people dying alone in their homes is becoming more of a conspicuous phenomenon. There’s a word for it in Japanese — kodokushi — and it carries a particularly depressing idea, since it’s usually used when someone dies and no one discovers the body right away.

As Japan became a more atomized society following the economic growth period of the ’60s and ’70s, more and more old people have been living in urban apartments by themselves, cut off from their communities and even from relatives. Isolated neighborhood groups often form patrols that keep an eye on elderly people living alone, checking up on them regularly to make sure they’re all right. One firm that works with UR, the nation’s public housing corporation, helps older tenants who find it difficult to move about. For ¥500 a month they take out their garbage for them, a service that doubles as a kind of patrol for obvious reasons.

UR, which reported 613 cases of kodokushi in its 750,000 nationwide units in 2008, has a stake in the issue because many of the people who moved into their residences decades ago are still living there, which means the number of kodukushi cases will only increase. The problem for UR is that Japanese people are very averse to living in places where people have died. In fact, there’s a law that says if you are selling your house and someone died there either by foul play or suicide, you have to mention it to perspective buyers. (If it was natural causes you’re off the hook.) UR, or at least the part of UR that covers Tokyo and the surrounding prefectures, has taken the bull by the horns, as it were, and is actually offering “special rental apartments” where the previous tenant died on the premises, called tokubetsu boshu jutaku, at half price for one or two years. So if you don’t believe in ghosts or aren’t otherwise superstitious, there are bargains to be had.

Most of these available units are older, less appealing places, but, for instance, a 2DK in Koto Ward in Tokyo, which would normally rent for ¥80,000 a month, is now available for ¥40,000 a month for at least a year. If you go further out to Machida, you can get a 2DK for as little as ¥30,450. And keep in mind that the security deposit (there is no key money or agent fees for UR), which is usually three months rent’s worth, is also based on this half-price. You can browse these units on the UR home page, but you have to apply for them in person at a UR sales office.

Beyond belief: Graveyard business expands

Sunday, June 6th, 2010

Dying to get in: The new graveyard at Ishihama Shrine

People are dying to get into the new graveyard at Ishihama Shrine

Several years ago the Ishihama Shrine, located in Arakawa Ward along the Sumida River, announced it would expand its graveyard, prompting protests from local residents that reflects the usual cultural queasiness about anything associated with death. In this case it was manifested in a straightforward economic concern: The local homeowners and small businesses were afraid that the cemetery might bring down their property values.

It may be a valid complaint given that the expansion was carried out for economic purposes. According to the man in charge of selling plots, his company saw a business opportunity and suggested the expansion to the shrine. The company, Nichiryoku, would develop the small adjoining plot of land and sell squares of it along with monuments to people who needed family graveyards.

We asked if only people who followed the Shinto religion are allowed to buy plots, and he said that Buddhists and even Christians were welcome as well, meaning that, while the land was owned by a Shinto organization, the graveyard was, in effect, nondenominational. That might sound mercenary or even hypocritical, since Shinto burial practices (no incense, no memorial) are different from Buddhist practices, but religion has always been fluid in Japan. Spiritual activities have more to do with circumstances than with belief systems.

Public cemeteries in Japan are nonaffiliated, of course, but an increasing number of private and religion-associated ones are opening their graves, so to speak, to anyone with cash. In fact, terms of ownership seem to be based more on financial considerations than on spiritual ones. For instance, family graves, regardless of religion, are in principle reserved only for the immediate family, meaning the head of household, his wife and his eldest male heir, who “takes over” the grave. The heir’s wife and first-born male child then can have their ashes interred in the grave, but other children have to start family graves of their own. This lineage system guarantees that the grave is maintained.

The plot is “bought” for a sum, but it is more like a charge for usage in perpetuity (eidan shiyoryo). In addition, the heir pays a yearly fee to the shrine or temple or public/private organization administering the cemetery and takes care of it himself. If fees are not paid for a set number of years and the heir cannot be contacted, the cemetery can dismantle the memorial, remove the remains to a common grave and sell the plot to someone else. That’s why so many heirs move their family graves when they themselves move to a new city.

Prices for plots in Ishihama’s new graveyard range from ¥740,000 to ¥950,000, and sizes start at .55 sq. meters. The cost includes the memorial, which explains why the cemetery, half full at the moment, looks more like a storage area for memorials than a graveyard. The yearly kanri-hi (management fee) is ¥12,000, which seems to be the going price in central Tokyo. The annual charges at a private, nonaffiliated cemetery in Machida start at ¥3,600, but that cemetery also offers a wider variety of grave options, from the tiny (.425 sq. meters: ¥770,000) to the turf-embroidered (1.25 sq. meters: ¥1,290,000).

This stamp's for you

This stamp’s for you

Public graveyards can get expensive as well. As with residential and commercial properties it’s all about location. The famous Aoyama Cemetery charges between ¥4.8 and ¥10 million per plot and the average price of a spot at Yanaka Cemetery, where the dead include some of Japan’s most famous historical figures, is about ¥3 million. Unlike a lot of new graveyards, these two have trees and flowers and benches, which is probably why there’s a waiting list.

Most for-profit cemeteries make up for this lack of pastoral filigree by offering big parking lots and facilities where visitors can have lunch and take a rest. And, of course, the farther you get from the center of town, the cheaper it gets, but you have to keep in mind that since Japanese people are cremated, regardless of religion, postage-stamp graves are the norm. If you want something to accomodate a coffin you’ll pay accordingly and probably have to look around a bit.

Of course, Ishihama Shrine gets a substantial tax-free piece of the action when Nichiryoku sells a plot. And it isn’t just Shintoism that makes a killing from the grave business. When Buddhist remains are interred, the associated temple gives the deceased a special sacred name, and the more you pay, the “better” the name. So while you still can’t take it with you, at least you can show other souls in the afterlife that you once had it.

Tower of power: What’s a view worth?

Saturday, May 22nd, 2010

What you see is what you get

What you see is what you get

If you’ve lived in Japan for any length of time you know that any property you buy will likely not increase in value over time. Structures themselves, whether houses or condominiums, lose value as a matter of course because that’s the way the government and the housing industry planned it. And since the end of the bubble economy of the late ’80s, even land prices have dropped and continue to do so, thus contributing to the cycle of deflation that keeps the economy in the doldrums.

The only exception to this trend is Tokyo, and the media has lately been reporting on how healthy the condo market is in the capital, but according to AERA it’s only specific areas of Tokyo, and not necessarily the ones you might expect. For instance, the “3A area” of Aoyama, Azabu and Akasaka — expensive locations favored by well-to-do expats — has been losing value steadily since the so-called Lehman Shock because of decreasing demand for rental property.

But there are locations that AERA says offer “some hope” for the future, meaning that if you buy a condo in these locations the value won’t go down “that much.” These properties lie in a “golden triangle” whose points are Akihabara station, Toyosu station and Shinagawa station; in other words, parts of Minato, Chuo and Koto Wards, especially the waterfront district, which has become very popular among the boomer generation’s own progeny, who are now entering middle age.

There’s one exception, and that’s Sumida Ward, or, at least, parts of Sumida Ward. Earlier this year, a condo complex called Oacity near Kinshicho station opened model rooms and put on sale 850 units in three phases. All the units in each phase sold out on the first day, even though the complex won’t be completely finished for several years. Many units were so popular they had to be chosen by lot.

Why is a condo in the usually ignored Shitamachi district so popular? Three words: Tokyo Sky Tree. Apparently, any new building, and even quite a few old ones, with an unblocked view of the new TV tower is a hot property. Since there are very few tall buildings in that part of Tokyo right now, it’s relatively easy to find an unblocked view, especially given the fact that the completed tower will be more than 600 meters tall, but you can definitely expect more high rises to go up in the next few years.

In fact, there’s a good possibility that the folks in Oacity who purchased an apartment with a theoretical perfect view of the Tree might not have one by the time they move in if, in the meantime, some other developer builds a higher condo that blocks it. In that case their property value will plummet. The better the view, the more money you can get, and the fiercer the competition.

Communal living: It isn’t just for foreigners anymore

Monday, May 10th, 2010

About 8 minutes from Gotanno station on the Tobu Isezaki line

A place to share, about 8 minutes from Gotanno Station on the Tobu Isezaki line

Considering how expensive housing is in Japan, foreigners just off the boat tend to be surprised that there isn’t more communal living going on. Most Japanese apartments, even the larger ones, are not really adequate for communal living the way apartments in the West are, and in any case Japanese landlords tend to frown on renting out properties to multiple persons if those persons are not married or otherwise related. Consequently, there’s no vocabulary for shared dwellings, much less a market.

That is until now, and it appears to be a market-driven development. The explosion of vacant rental properties in the larger cities have prompted some real estate companies to take it upon themselves to offer what is being called “share houses,” meaning houses and apartment buildings with communal living rooms, kitchens and bathrooms. These companies rent out the bedrooms as they would apartments, and the practice has caught on so much so that the media is covering it as a trend, as seen on our comrade blog, Japan Pulse.

The main appeal is economic, but the real draw is social, especially among women who don’t feel safe living by themselves in one-room apartments in the city. Share houses offer privacy with the option of interpersonal interaction. The model for this kind of living is Share Place Gotanno in Adachi Ward, Tokyo. Formerly a company dormitory (most share rooms are), the building has been converted by the Tokyo Electric-affiliated housing renovation company ReBita into 45 rooms centered around a living and dining area that is the equivalent in size to three households’ worth. Consequently, the kitchen has three large refrigerators. Each bedroom is the size of about seven tatami mats and includes an air conditioner, a bed, a desk, and a storage unit. The monthly rent is from ¥58,000 to ¥63,000, there’s a “management fee” of ¥13,500, and a ¥50,000 deposit (¥30,000 refundable) is required. There’s also a ¥36,000 “processing fee” and a one-time insurance fee of ¥8,000. Foreigners are welcome.

Gotanno Share Place

Share Place Gotanno

At present about 60 percent of the residents are women, and while many room share facilities are coed, there is one network called Tokyo Girls Fudosan that caters exclusively to females. They run several communal houses in the metropolitan area, some of which contain only three rooms. TGF has the added value of offering “theme rooms,” meaning designs and colors that match the mood of the potential tenant. The whole idea of their rentals is that communal living is fun. One share house profiled on NHK involved a group of young professionals who share a love of gardening and got together to rent a huge house in Kanagawa Prefecture that had a large piece of land attached where they could grow flowers and food.

In the Japanese style, share rooms have no uncertainties; no possibility of two roommates having to cover a third because he doesn’t have the rent or his share of the phone bill or utilities. Phone bills are basically nonexistent because everybody has a cell phone now, and as for utilities, including internet connections, most take care of it in the management fee. Many share houses don’t take smokers, though some have isolated smoking areas.

RSS

Recent posts