New leases on life

According to the website of the housing newsletter Jutaku Shinpo, during FY 2008 88.5 percent of the rental properties in Japan were occupied. Moreover, during that time 91.6 percent of these properties decreased their rents. Perhaps this astonishing statistic should be taken with a grain of salt since the newsletter’s survey, which was conducted among rental property management companies, only had a 26 percent response rate. Nevertheless, it’s startling.

Other results of the survey said that 60 percent of the new renters during this period did not have to pay cleaning deposits or “key money” (basically a gift to the landlord) up front.

Jutaku Shinpo didn’t analyze these statistics, but in Japan rents are fairly tied to property values, which, of course, have dropped in the past year or so. And you don’t have to be a seer to predict that rents will probably drop even more since the number of potential tenants may be shrinking while the number of rental units is increasing. One extraneous payment that still seems in play is the rental agreement re-signing fee, usually equal to a month or a month-and-a-half’s rent. Some traditions are difficult to get rid of, regardless of the economic climate.

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