Retiring boomers make their last stand on the real estate market

February 9th, 2015 by Philip Brasor & Masako Tsubuku

Onward and upward: Diorama showing high-rise condos under construction on Tokyo's waterfront

Onward and upward: Diorama showing high-rise condos under construction on Tokyo’s waterfront

Following the 2011 Eastern Japan Earthquake, sales of high-rise condominiums in Tokyo saw a drop that reflected anxiety over living so far off the ground. Though no high-rises were damaged in the temblor (if anything, the disaster showed how well they’d been built to withstand earthquakes), matters such as stopped elevators and the possibility of losing water or other utilities even temporarily were made apparent to tower dwellers. More significantly, elderly people who lived high up realized how difficult it would be to evacuate in the case of a quake hitting the city more directly.

The sales decline was short-lived. High-rise condos, or “tower mansions,” are as popular as ever right now, and according to a recent article in Shukan Asahi, especially popular among retired and soon-to-be-retired people.

With the memory of the quake receding and developers promoting even safer high-rises, the aging baby boom generation is looking at the issue from a practical standpoint. The article profiles a 60-year-old woman named Midori Takahashi who bought her condo four years ago in Koto Ward on the Tokyo waterfront, in a new high-rise 10 minutes by foot from Kiyosumi Shirakawa Station on the Hanzomon Metro line. She and her 57-year-old husband bought the property after assessing the situation of her own parents, who lived in Shizuoka City. When her father retired, he bought a house in the countryside, near a river with a beautiful view, since he wanted to spend the rest of his life surrounded by nature. But as his health deteriorated he found it difficult to make regular visits to a hospital, so he moved back to the city.

Takahashi and her 57-year-old husband are childless. They have their own health concerns, and when both were forced to retire early they sold their Tokyo home and bought an ekichika (close to station) high-rise condo, also in Tokyo. They are close to hospitals and retail outlets, and with two train lines within easy walking distance they can get anywhere without having to drive. Moreover, they’ve found that most of the people in their building are the same age, and have thus joined a new community with relative ease.

This trend is revitalizing the residential real estate market, at least in major cities. Unlike in the U.S., retirees in Japan traditionally didn’t move out of their homes. They tended to live there until they died; or, if they were city folk, they might move to the countryside where they could do gardening or farming.

Boomers have a different outlook, though. Shukan Asahi interviewed Yoichi Ikemoto, the editor of the housing magazine Suumo, who says that people now in their 50s and 60s still “have their health,” but they imagine themselves turning 70 and their “physical power” starting to fail. And since more major hospitals are located in urban areas they think it’s better to live closer to city centers than away from them.

In a 2013 cabinet office survey more than 50 percent of people over the age of 60 said they preferred living in a city. This attitude is of concern to the government, which is trying to promote urban decentralization.

Predictably, the rush for high-rises has driven up prices, and not just on the Tokyo waterfront. One of the most popular locations is Tachikawa in western Tokyo. Recently, a 32-story condominium sold out all its units the day they went on sale. The prices for the apartments, which average about 70 sq. meters a piece, were ¥70 million-¥80 million, which is about the same as that for a unit in central Tokyo. Western Tokyo is popular because not only does it have all the amenities retired people are looking for, but it is considered relatively resilient to earthquakes due to its geology.

Also, because they are retired, the buyers don’t need to commute, so even if the high-rise is not so close to Tokyo that’s fine as long as it’s near a station that can get them anywhere. Outlying suburbs in Chiba and Saitama are also seeing a lot of high-rise construction near major train stations. Even regional capitals like Hiroshima are enjoying an influx of older people who prefer the convenience of central cities to the uncertainty of rural life. In Nagasaki, older people who live among the city’s famous hills are moving to condos down in the city center where it’s flat.

Boomers also don’t necessarily think they have to leave their property or other assets to their children, and would rather spend whatever capital they have on themselves. It was essentially the boomers’ buying of homes in the 70s and 80s that blew up the bubble economy, and in the meantime, unless their homes are in city centers they are not worth the same amount of money that they paid for them. In many cases, only the land may be worth something now.

In the past, it would have been difficult for such seniors to secure loans, but mortgage rates are rock bottom now and banks are desperate, so retired boomers, even ones on fixed incomes, can pay up for a condo.

Another trait presented by boomers is a desire, as Ikemoto says, “to live as they please,” meaning they are thinking more like Americans in that, free from the obligations of work and child-rearing, they want to enjoy themselves. This trait appears to be more pronounced among women than among men.

In the cabinet survey cited above, men were equally divided between those who desired rural living and those who desired urban living, but in the case of women, it was three-to-one in favor of city life.

The article profiles a 65-year-old Chiba woman who bought a condo near Funabashi station 15 years ago as an investment despite her husband’s objections. Eventually, the couple’s son lived there, but when he married he moved out. The woman was a full-time nurse and retired at the age of 62. Her husband soon retired, too, and wanted to move back to his hometown in rural Kyushu, but she wanted to stay and instead moved into the Funabashi condo, which is within a half hour of central Tokyo.

The couple live separately — he in Kyushu, she in Funabashi, where she enjoys shopping and hanging out with her friends in Tokyo. Shukan Asahi says this is a trend called sotsukon, or “graduating from marriage,” wherein a couple splits after many years without getting divorced simply so that they can live as they please on their own. Ikemoto says older people now want to change their lives while they are still healthy enough to do so, “and that’s why ekichika condos are so popular.”

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One Response

  1. Grrrrrreat, more movement from the inaka to the cities. (and raising the cost of living there) Just what this country needs…

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