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. Read More
A self-contained community in the town of Nisshin in Aichi Prefecture is taking one of its residents to court, along with his father-in-law, who owns the land, and Sumitomo Real Estate. When the neighborhood was established in 1974, the developer stipulated that no structure would be more than two stories, and everyone who moved in had to sign a pledge to that effect. The defendant in the suit wants to build a three-story house on land owned by his father-in-law, who signed a similar pledge some years ago, after it was incorporated into the neighborhood’s own rules. The community wants to stop him. Read More
When you buy a condo in Japan, you have to pay two monthly management fees for as long as you live there. The first is a normal maintenance fee for things like cleaning in and around the common areas and keeping the elevators running properly, ranging anywhere from ¥15,000 to ¥40,000 a month. The second is a “repair” fee, for when more extensive maintenance work, such as painting and remodeling, of common areas are required–normally, ¥6,000 to ¥20,000 a month. Usually, the developer of the condominium selects a building management company at the time of construction, which means the eventual buyers have no say in who looks after these payments and orders up the work. It’s not like a coop in the US. After all the homeowners move in they form an association and appoint one of their members as the representative to deal with the management company. The potential for abuse is ripe, as shown by a recent news item. Read More
Last night on the TV Tokyo news show Business Satellite, there was a report about used condos. The report said that during the first five months of the year 12,000 new condos went on sale of which 70 percent were actually sold. More importantly, 13,000 used condos were sold during this period. Real estate and housing industry people see this as a “trend” toward better sales of used condos. Read More
The Asahi Shimbun ran an article about a 62-year-old widow who abandoned her house in Saitama prefecture, where she and her late husband raised two children, and moved to a smaller house in Fukushima prefecture that her husband bought just before he died. The house has a garden and the woman says she is quite comfortable. The thing is, she did not sell her Saitama house. This unusual arrangement is made possible for a new sort of organization that helps older people “change homes.” Read More
The government’s household spending survey for 2008 was released the other day. The average balance of savings for each household was ¥16.8 million, a 2.3% decrease from 2007 and the third year the average balance has gone down. The main reason for the decline was, again, lower interest rates as well as fewer people taking out life insurance annuities. The portion of savings devoted to stocks and securities was about ¥2.7 million per household, which is a slight increase over 2007, and the fifth year in a row that showed an increase. Average total debt per household was ¥4.98 million, a 1.4% decrease, meaning fewer families are borrowing money.
Back on Mar. 15, we posted an entry about the government’s new Flat 35 plan to stimulate property sales. The main new feature of the plan is that people who want to buy homes can borrow 100% of the money needed, meaning that they don’t have to make a down payment. A recent article in the Tokyo Shimbun talked about the inherent dangers of this plan, outlining what a typical family could expect to pay for the next 35 years if they buy a typical property usisng the plan. Though the interest rate is fixed, the writer of the article, one of Japan’s most noted housing experts, compared the situation it sets up to the situation caused by the spread of subprime loans in the U.S. Basically, he says that the purpose of the loan is to draw people into the housing market who don’t really make enough money to buy homes. Once they get into the market, they find they will have less money to pay for other things, like their children’s education. The government tried something similar in the 1990s with so-called “relaxed loans” and a lot people went bankrupt. He thinks Flat 35 will lead to even more.
It’s that time of year again–bonus time, when electrical appliance stores push air conditioners to people who probably already have them. According to government statistics, 90% of Japanese households already have air conditioners installed in their homes, so why do people keep buying new ones? One reason right now is that the government, in order to stimulate consumption, is offering “eco points”–credits that can be used to purchase other things later–for digital TVs, energy-saving refrigerators, and energy-saving air conditioners. The ostensible idea is to promote energy conservation, but it’s difficult to believe that is what is going to happen if everyone buys a new appliance and thus throws their old one away. This seems especially problematic when it comes to aircons, which are heavy and difficult to install and remove. After the jump, an article I wrote for the Asahi Shimbun about air conditioners that still applies. Read More
One of the more insidious economic practices in Japan is the bonus system. Bonuses are regularly handed out to workers and management twice a year, whether you work in the private or the public sector. Traditionally, they are almost never considered merit-based or, for that matter, even performance-based (performance in terms of company profits, that is). The bonus amount depends on seniority and position, and in practical terms is looked upon not as a “bonus” in the Western sense, but simply as an integral part of the annual salary. However, calling it a bonus gives the employer a lot of leeway and a kind of safety valve when times are tough. It can also be disastrous for people with mortgages. Read More
After the jump, the results of a recent Ministry of Health Labor and Welfare survey about household income. Read More
Cat Foreheads & Rabbit Hutches 