Last month a model room opened for a new condominium complex in Osaka with the revealing name Owner’s Tower. Part of the new Grand Front development project situated in the huge tract of land near Osaka Station that once was home to the Japan National Railways Umeda North Yard cargo terminal, the new residence is a forthrightly upscale facility that targets high-income buyers, in particular foreigners who are looking for a second home in Japan’s second biggest city. The building is 48 stories comprising 525 units, the smallest of which is 90 sq. meters. Prices start at ¥3 million per tsubo (3.3 sq. meters). In the first sales phase, apartments on floors 40 through 48 will be made available at prices ranging from ¥83.5 million to ¥415 million. The projection is that residents will be able to start moving in in August 2013.
The developer Sekisui House emphasizes that Owners Tower is very different from the “family-type” condos that tend to dominate the urban housing market, but in fact central Osaka will soon see a lot of new family-type tower condos going on sale in the coming months. Several buildings are now going up in Kita Ward offering a total of 400 units, and in Tennoji Ward, which is considered the heart of Osaka’s business district, about 260 units are under construction. The average prices are slightly less than ¥2 million per tsubo, or about 30 percent higher than prices in areas outside the city center.
Why are families moving to the center of the city? The main reason seems to be that while these condos are expensive, they are still much cheaper than they were, say, four years ago. Ever since the so-called Lehman shock of 2008, real estate in all the major cities has dropped in value as large companies unloaded properties to raise cash. Those developers that managed to stay in business cut back on new projects, but now they’re taking advantage of the lower land prices and building again.