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Tag Archive for Tokyo

Now, the real truth about the real estate investment in Japan : Kabocha no Basha and Suruga Bank scandal

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In today’s uncertain economy, dynamic growth potential with low risk is tempting.
Real estate companies are constantly manufacturing the opportunities to captivate the naive investors.
Kabocha no Basha was one of them.

Suruga Bank Scandal background
Japan’s Financial Services Agency has launched an emergency inspection into Suruga Bank over investment irregularities involving women-only shared houses.
Suruga Bank extended over 100 billion yen ($915 million) in loans to about 700 people, mainly middle-aged salaried workers, to invest in Kabocha no Basha — or “Pumpkin Carriage” ; women-only shared houses operated by Smart Days.
Tokyo-based Smart Days also worked as a middle man between Suruga and investors and solicited investment from salaried workers, pledging to pay them rents for 30 years.
But Smart Days struggled with low occupancy rates and stopped paying the rents to owners they promised in January 2018.
Smart Days filed for bankruptcy in April 2018.

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Where is the most attractive city to invest in Asia ? : CBRE institutional investors reports 2018

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(Kamogawa city in Chiba)                       (Kominka-tradtional Japanese folk house-)
Are you curious about where the most attractive city in Asia to invest is ?
CBRE, renowned global real estate company, recently published a report on Japanese investment market called “CBRE Investors Survey 2018” According to the report while domestic investors’ willingness to invest remains high but the marker can see a somewhat prudent attitude and a move to seek an alternative investment.
Foreign investors targeting the Asia-Pacific region ranks Tokyo as the most attractive city and  local cities (7 cities in the region such as Osaka, Fukuoka as one category) in Japan as the seventh place.
In 2018, the interest from overseas investors to Japan is expected to further grow.
Here are key points from the report
While Japanese investors have increased willingness to sell, the intention to acquire is somewhat lower.
According to the report, 63% of investors in Japan said they would acquire the same volume as in 2017, an increase of 5 points from 58% in the previous year.
Meanwhile, 29% of investors responded that they will increase from the 2017 acquisition, a 9 point decrease from 38% in the previous year.
The overall result is that more than 90% of investors are still assuming investment trajectory                shall be equal to or higher than the previous year. Nonetheless, the trajectory also decreased by 5 points from 96% in the previous year. The willingness to acquire assets seems to be somewhat declining.
On the other hand, the willingness to sell is somewhat increasing.Investors who said they would sell the similar volume as the previous year, is 62%, decreased by 7 points from the previous year,34% of total said they would increase sales from the previous year, an increase of 14 points from 20% in the previous year.Overall, 96% of the total is  projecting plan to sell equal to or greater than last year.

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You want to flip akiya (unused house, 空き家) into a rental property in Japan ? : Please do the math first

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(Flipped house in Chiba city, east of Tokyo. Before and After)

* Foreigners can buy a property in Japan without having special qualification.
Who can put a price on akiya (abandoned houses,空き家) in Japan ?  You can.
There are more than 8 million distressed or abandoned houses in Japan.If you want to flip these akiya (abandoned house) into a rental property, there are quite a few opportunities out there. Akiya in Japan is a big social issue as akiya can generate serious security issues like fire, weeds, pests and burglars. Investing in akiya in a sense solves social these issues.You can find the possibilities of getting a great deal very quickly at relatively small risk exposure. But you have to find a right property in a right location.
Here is how it works
In real estate business, you probably make your money when you buy a property not when you sell it. If you don’t buy the property at the right price and/or terms, then there won’t be any good profit when you sell it.The same phrase can be applied to your home.Even if your initial plan was to live in a property (your home that is) for a long time, life is full of unexpected ventures and you may have to sell it in the future.The real estate is contained in the relatively low liquidity dimensions compared with other financial assets such as stocks, bonds and the transaction costs are high.Thus you want to be very careful when you buy a property.This is true for investors to flip a property.
Usually house flipping in the US is referred as a short-term strategy i.e. buying and renovating a house and sell it at higher value in the short term. A flipper usually needs to get out in less than six months.However, in Japan, it is not a very common style.Today I am illustrating a Japanese style house flipping; flipping akiya (abandoned house, 空き家）into a rental property.You don’t have to stick to akiya for flipping but they are naturally very affordable to come by.One of our business partners is actively investing in akiya (abandoned house).Here’s a simple strategy we usually recommend for flipping akiya into a rental property.
Location
We usually locate a property in suburban areas of Tokyo where you can find a decent one for flipping.
You should be able to find an appropriate property in Kansai (western Japan) areas but we don’t cover those areas simply because it is too far to visit the sites.Read more

Is there any hot UR apartment to rent ? : Tips for hunting nice UR property in Japan

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  (UR X IKEYA collaboration : IKEYA kitchen)

(UR X MUJI collaboration apartment in Kobe, Hyogo)

History and corporate structure of UR

It is worth knowing the background and character to deal with UR as they have started the operation as the government agency for housing.
Let me start with explaining the corporate structure and history of UR.

Their official name is ‘Urban Renaissance Agency’ (都市再生機構）and they are ’incorporated administrative agency’. （独立行政法人）
Officially speaking, they are not a part of the government organizations any more but still under the jurisdiction of
the Minister of Land, Infrastructure, Transport and Tourism (MLIT, 国土交通省）
All senior executives are amakudari from either cabinet office or MLIT.
Its capital is 107 billion yen and its number of employee is 3200.
Here is the brief history of UR.
Between 1975 and 1981
The organization provided housing and land through large-scale
development of new residential areas around major cities, which
were suffering from housing shortages due to high population and
industry concentration.
Representative projects include Chiba New
Town (Chiba Prefecture), Atsugi New Town (Kanagawa Prefecture)
and Izumi New Town (Osaka Prefecture).
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A solution to the hotel shortage ? New minpaku (民泊, private lodging) law in Japan : How does it work ? and how can you tap your property ?

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I have a friend who has enjoyed hosting international visitors in Tokyo in her
own condo.
She has been hosting international visitors in her spare two-bedroom apartment
but will have to stop it because her building association (管理組合）has decided to
ban the minpaku business ahead of the law’s
enactment in June 2018.
She was able to meet many different people she would have not met otherwise.
A lot of foreign friends have been asking me a question about minpaku (民泊、private lodging) in Japan.
Today I am going to discuss the basic knowledge about minpaku and minpaku law
set by the government in 2016.
How does the new minpaku law work ?
What is the implication on the real estate industry ?

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Are you interested in akiya 空き家（unused house) for free in Tokyo ?：How to find a house for almost nothing in Japan ?

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(Okutama lake in Okutama town, Tokyo)

You can find “abandoned houses”  all over Japan, due to the country’s shrinking population.
The ministry of land, infrastructure, Transport and Tourist（MLIT) reported in 2013
that about 8.2 million (about 13.5% of total) houses and apartments were empty.

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In fact, this 8 million number which often catches media attention is very misleading.
It includes the rooms and houses for letting.
Taking the fact into account, there are about 2.2 million akiya ‘real empty houses’ (abandoned houses)
in the market. Still daunting number in deed.

One report said vacant land and homes could by 2040 be as big as Japan’s northernmost island of Hokkaido—about 83,000 sq km (32,000 sq miles), or the size of Austria.
The area is currently about 41,000 sq km, slightly bigger than Japan’s southern island of Kyushu.
Many of Japan’s 8 million abandoned homes—or akiya(空き家）—are often left empty indefinitely.
Why do we have so may abandoned houses ?

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How do you eat ramen ? -Japanese multicultural management –

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I am a licensed property broker but occasionally offered the work for the trainer who teaches the multicultural management in large Japanese corporations.
I do enjoy working as a trainer because interaction with students (workers at large corporations) is always inspiring.
Today I am going to depart from the real estate and write a light note about one of my favorite TV shows in Japan and try to give you kind of funny way of multicultural management tactics in Japan.
First of all, I don’t usually watch TV.
Why ?
1. Don’t have time to watch.
2. don’t want to spend my precious time on silly programs.
3. Generally speaking, quality of TV programs in Japan has been deteriorating significantly over years and there is not many program worth watching. (Maybe I am just getting old ?)
And yet, I do like one documentary show called ‘Youは何しに日本へ？’　(Why did you come to Japan ?) broadcasted by TV Tokyo every Monday from 6:55 pm.
(Please check your local station which is affiliated with TV Tokyo if you live
outside Tokyo)
In this show, TV Tokyo crews interview foreigners at the airport where most visitors first arrive in Japan, with no appointments. Not just at the airport, sometimes at sea ports or events, everywhere crews go there are on-the-spot interviews with no appointments (so they say anyway)
And they often find a treasure trove of funny and interesting foreigners.
It is a new type of TV document variety show with many unexpected things.
They asked tourists for the interview on the spot. It could be half-staged but looks pretty real.
Dozens of foreign tourists are interviewed and eventually a couple of persons or group are picked up
for detailed interview.
Selected tourists for in depth interviews are usually Otaku (geeks) type of people and not usual tourists.
They come to Japan for variety and yet very intriguing reasons such as eating okonomiyaki (Japanese pizza), seeing host family in Japan, learning ‘No’ play (traditional masked dance-drama)
4-day training camp of “Kenbu Tenshin-Ryu” (traditional martial arts), kimono gigs, Japanese swords fan etc etc. One episode is about a woman from America and she’s a big fan “Sailormoon” and has come to Japan to become a voice actress.Read more

Is ‘minpaku’ (private lodging) finished in Japan ? : How is the new law affecting the real estate industry ?

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The new law will be effective from June 2018 to crack down on illegal lodging
Local governments across Japan have just begun accepting applications for operating private lodging (aka ‘minpaku’ in Japanese) rental businesses under a new law going into effect in June 2018.
The law is responding to a sharp growing need for affordable accommodation amid a rapid rise in foreign tourists, while cracking down on illegal lodging.

The law is to limit the number of days per year that rooms in private homes and apartments can be rented to maximum 180.
Operators will have first obtain the certificate from the local governments and then display signs indicating the presence of rental units and manage noise and other complaints from neighbors. No-compliant operators can expect to be fined.

In the meantime, Japan’s  condominium management company association recently released the nationwide survey results on the use for private lodging in condominiums in Japan.
It is the interesting development and I quickly share the summary of the report today.

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Where are the top destinations for people seeking real estate in greater Tokyo？ : Two locations in Saitama stand out

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(Picture: Yokohama)
Recruit Sumai Co., operator of the Suumo residential information website, recently released the ranking of locations
(and train stations) where people in the Kanto region want to reside in 2018.
(Kanto region in this report  covers Tokyo, Kanagawa, Chiba, Saitama and Ibaraki)
They released the same report for Kansai region (including Osaka, Kyoto and Kobe as well.
The survey began in 2010 and has been conducted every year.
7000 people in the Kanto area responded and they are in the
age between 20 and 49. People over 50 years old are not surveyed, which naturally distorts the statistics.
Here is the ranking for 2018 and data in 2017 and 2013 are also illustrated for a comparison purpose.

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Real estate investment : Is Tokyo’s property bubble finally ready to burst ? (if any)

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The RECRUIT company (major Japanese real estate advertisement company)  released its own survey on people from greater Tokyo area (Tokyo, Kanagawa, Saitama and Chiba) who have purchased the newly built condominiums in 2017.
Over 4700 people responded.
Here is the quick summary of the report.
1. Location of condo purchased
Tokyo’s 23 wards increased its share slightly from 2016 to 43% and
20% of  respondents bought condos in “Kanagawa prefecture”. (ranked 2nd next to Tokyo 23 wards)
2. Price
The average purchase price of condos is 54.52 million yen,
(U$500,000), the highest since the survey started in 2001.
3. Trend in each prefecture
The average price in Tokyo 23 wards exceeded 60 million yen (U$545,000) for the first time since the survey began
4. Age
The average age is 38.6 years old and the households with children account for 45%.
5. Income and household
Average households total annual income is 9.44 million yen(U$89,000), Married couples account for 65%
Households with annual income of 10 million yen or more gradually increase, to 36%.  65% of households generate dual income (both husbands and wives working), the highest since the survey began in 2001.
57% of single-person households buy the condominiums within Tokyo 23 wards which is significantly higher than other households.

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