The following is an article I wrote in 2004 for an occasional column that I and several other non-Japanese wrote for the Asahi Evening News about the “expat” experience in Japan. In a way it explains our skittishness about buying property today.
In the early 90s, my partner and I discussed the possibility of buying a condominium or a house. Both of us had recently become self-employed and our financial situation wasn’t assured, so we talked about buying property as if it would occur sometime in the middle-distant future, meaning not soon enough that we needed to start looking right away.
Our friends knew of this vague plan, and once, while visiting a couple we knew in Nagano prefecture, they told us of a housing scheme being promoted by a nearby local government. The city was developing a large piece of land on the top of a hill and offering plots by lottery at below-market prices. The stated aim was to attract new people to the city, which had been losing population over the past decade.
We went to the lottery drawing not thinking that we would participate, but our friends talked my partner into picking a number out of the hamper just for fun. The odds against actually winning were almost ten-to-one. But she did.
Everything suddenly changed. The prospect of buying property had so far been theoretical, but now we had to face the decision head on because we had been given an opportunity.
We returned home and agonized over whether or not we should buy the land. On the plus side, it was very cheap and the lot we had “won” was located on a corner of the hill with an unblocked view of a green valley. On the minus side, we would have to move to Nagano and we would have to build a house, but as we talked these negatives slowly moved over into the positive column. Because of the nature of our work (mostly writing and translating) we didn’t need to live near Tokyo, and having to build our own house meant that we could build the house we wanted.
The land came with conditions. Construction of a house on the plot had to commence within three years of signing the contract, and the land could not be sold for a profit, since it was already being sold to us at less than its market value.
Caught up in the momentum of chance and thrilled at actually having “won” something (we looked upon our luck as a kind of sign), we decided to buy and went about securing a loan, which was to be arranged through the local bank in Nagano.
Many things can happen in three years, and the fact that we didn’t start right in on planning our house was an indication of how little confidence we had in going through with it. Neither of us had ever done something this big before. As with the original idea of buying property, the idea of actually building a house could only be contemplated seriously if it seemed a long time into the future.
After a year of making monthly payments on the loan, the buzz of excitement had dissipated into a nagging doubt. The payments weren’t breaking us, but the house would cost more, which meant we would have to take out another loan eventually. Occasionally, we would sit down and make rough sketches of our “dream house,” but I, at least, tried to avoid thinking about it.
It’s tempting to say that the decision was made for us, but the problems that eventually arose shouldn’t have been surprises. They were simply realities that we had to address but didn’t want to.
Nevertheless, they were problems. Though our ideas of a dream house were sketchy, we soon came to realize that there were no construction companies in the area who would build such a house. There were “standards” imposed by the city, and in order to secure a house mortgage with the local bank, we would have to submit a design that the bank approved of, and apparently they only approved standard designs that local construction companies could build.
The nature of these obstacles made us realize that the city, the contruction companies, and the bank were all in this together. Though the ostensible purpose of the land scheme was to reinvigorate the tax base, the more immediate aim was profit for everyone concerned. As the deadline to start building approached, we would occasionally visit our land and what once seemed like a beautiful hill-top location was slowly turning into the usual Japanese housing development–boxy nondescript structures all jammed up against one another.
After two years we opted out. According to the contract, we would simply get back the money we paid, but first we had to pay off the loan completely. This involved some financial sleight-of-hand that incurred lots of “handling fees” and penalties. In the end, we paid a million yen for the privilege of owning a vacant lot for two years and going through a crash course in Japanese real estate practices.