http://www.c21-smica.com/blog_century21_yusuke/ English Real Estate Blog en Copyright 2008 Fri, 28 Nov 2008 10:20:40 +0900 http://www.sixapart.com/movabletype/ http://blogs.law.harvard.edu/tech/rss GOOD NEWS! Borrowing money in Japan just got cheaper! In late October, Bank of Japan reduced interest rates from 0.5% to 0.3% (-0.2%). The main four banks Mitsubishi, Mitsui-Sumitomo, Mizuho and Resona had already set their interest rates for November (before BoJ's cut) so the newly reduced rates have filtered down and will take effect starting December. Bank of Japan acts swiftly but it takes a little more time as the lending banks reduce rates more gradually. Here is a quick list of interest rate changes from November to December for Mizuho Bank. Floating: 2.875% -----> 2.675% (- 0.2%) 2-year fixed: 3.25% -----> 3.15% (- 0.1%) 3-year fixed: 3.50% -----> 3.40% (- 0.1%) 5-year fixed: 3.65% -----> 3.55% (- 0.1%) 7-year fixed: 3.75% -----> 3.65% (- 0.1%) 10-year fixed: 3.80% -----> 3.70% (- 0.1%) 15-year fixed: 4.20% -----> 4.10% (- 0.1%) 20-year fixed: 4.50% -----> 4.45% (- 0.05%) *** These interest rates listed above aren't the actual applicable rates, please deduct an additional 1.0 to 1.5%. (FOR EX. the floating rate would be from 1.675% to as low as 1.175%) *** I am thinking Bank of Japan will make another cut in interest rates in the future and the interest rates will continue to drop. One thing is for sure: It is a lot cheaper to purchase and borrow money now than it was over the last several years. Please inquire for more information on home loans and interest rates. - Jason ]]> http://www.c21-smica.com/blog_century21_yusuke/2008/11/bank_of_japan_drops_interest_r.html http://www.c21-smica.com/blog_century21_yusuke/2008/11/bank_of_japan_drops_interest_r.html Fri, 28 Nov 2008 10:20:40 +0900 Friday, November 28th, 2008 Property developer MORIMOTO filed for bankruptcy protection taking out yet another local and pretty large real estate company. For rental properties, one of their series' names they are known for developing IPSE (イプセ) and for condominiums / flats for sale a couple of their series' names they are known for developing Diana Court (ディアナ・コート) and Crescent (クレッセント). 1615億2000万, 161.52 billion yen in liabilities makes this a pretty big one. Tuesday, August 26, 2008 Condo Developer Sebon Files For Bankruptcy TOKYO (Nikkei)--Saddled with 62.1 billion yen in liabilities in the face of a slumping condominium market, Sebon Corp. filed for bankruptcy protection on Monday. UPDATE: Tuesday, August 26, 2008 19:18:42 I did not think I would answer the question in the title of this post in just a few hours but developer SOHKEN HOMES is in the same boat as Sebon. Like others that fell before it, Sebon succumbed to a sluggish housing market, rising material costs and tighter lending by banks wary of increasing their exposure to real estate projects amid jitters about the global credit crisis. Real estate firms have been selling off buildings and land to bolster their finances, but that in turn has resulted in a glut in the market and lower prices. They're saddled with about 33.1 billion yen in liabilities. Sebon and Sohken join a growing list which includes Urban Corp, Zephyr and NANBU. UPDATE: Friday, August 29, 2008 Rinkai Nissan Kensetsu- 70.5 billion yen]]> http://www.c21-smica.com/blog_century21_yusuke/2008/08/whos_next.html http://www.c21-smica.com/blog_century21_yusuke/2008/08/whos_next.html Tue, 26 Aug 2008 14:47:42 +0900 Well it is obviously very difficult to make this short but I will attempt to do so. I'll attempt to convey how I see things from my company and just as a section (or sliver) of what I see and hear. May was a great month and so was June. July is looking to close well. August is traditionally a tad slow because it is so hot and humid and I know, if I was looking to buy a property I wouldn't be thrilled to go look at non air conditioned properties on my weekend off. Of course, I love to because this is my job. And without showing properties, I really can't get anywhere. But since August is usually a slumping month, this in return works in the buyer's favor. You get eager sellers, eager to make a sale even if it's discounted, eager to make their goals for the month. -- The big news recently is Zephyr going bust... and a lot of small to medium sized developers going with them. Properties aren't selling as much as they would like and not for as much either. Without selling, they can't pay off their loans they have. Without paying off their loans, it is very difficult getting additional financing. Without additional financing for investment for new properties that sell combined with a slumping market, rising costs for building materials, tougher building regulations and a new lag for building approval, all add up to give heat to a lot of developers. ** Well, builders / developers without "Mitsui", "Sumitomo" or "Mitsubishi" in their names. ** While the mass media continue to report terrible results for real estate, those are results for things that have already unfolded and happened. The way that I am seeing real estate, people are buying. http://www.c21-smica.com/blog_century21_yusuke/2008/07/current_residential_real_estat.html http://www.c21-smica.com/blog_century21_yusuke/2008/07/current_residential_real_estat.html Sun, 27 Jul 2008 22:45:02 +0900 http://www.century21-tokyo.com Finally, the major portions of Part I of the construction of the site is complete and now just mostly waiting and seeing if there are any visitors, readers and prospective clients. Ultimately, I would like to add many more functions to the site such as a mortgage calculator, monthly interest rate changes for each of the banks for each of their products, useful links, and a search tool for properties once I've registered more. Slowly.. Of course, if someone contacts me through my site and makes a property purchase, my bosses will see it is worth it, and be more inclined to spend some more money on it. Please help me help all the other expats and foreigners by referring my site to people you know or simple give me an e-mail. Many Thanks, Jason]]> http://www.c21-smica.com/blog_century21_yusuke/2008/06/english_real_estate_site_opera.html http://www.c21-smica.com/blog_century21_yusuke/2008/06/english_real_estate_site_opera.html Tue, 24 Jun 2008 20:32:42 +0900 ]]> http://www.c21-smica.com/blog_century21_yusuke/2008/03/linked_in.html http://www.c21-smica.com/blog_century21_yusuke/2008/03/linked_in.html Sun, 23 Mar 2008 15:27:00 +0900 The roots of Japan's unusual housing market go back centuries. Buildings were often razed by earthquakes or fire, so durable houses were rare. Earthquake insurance largely did not exist until the 1990s (and even today is little used). In post-war Japan land has value but buildings do not. The law separates the ownership of the land and the structure, so the two are distinct in Japanese minds. After the war, the government sought to foster private home-ownership by offering tax incentives for new buildings. The policy was a great success. Arguably too great: by 1968 there were more homes than households to occupy them. At the same time, tax burdens abound for selling land with old buildings. After around 30 years homes are demolished for new ones to spring up. Because the lifetime of houses is short, cheap construction materials are used and the buildings are not maintained. There is no tradition of do-it-yourself home upkeep. Just as there is little interest in secondhand furniture or clothes among the sanitation-obsessed Japanese, so too home-owners prefer to build anew rather than refurbish the old. There is also a dearth of institutions and expertise that might oil the gears of a market in old houses, from surveyors to judge the quality of a property to banks that assess its value and provide a mortgage. As a result, where 89% of British homes have had more than one owner, and 78% of homes in America and 66% in France, only 13% of Japanese homes have ever been resold. But attitudes today are changing. The constant rebuilding places an unnecessary drain on people's financial resources, says Koichi Teramoto of the Ministry of Land. A couple easing into retirement may demolish their house to sell the land in order to move into a smaller abode that they must then build from scratch. Although better-built homes cost more up front, they cost far less over time—as much as one-third less after a few generations, according to Mr Teramoto. The ministry also worries that the constant demolition is terrible for the environment. The costs to the wider economy are also great. A home is more than a man's castle: it is typically his most important financial asset. Not in Japan. For most of the post-war period land prices soared, so the lack of a housing resale market was not a problem. But since the bursting of the property bubble in the early 1990s, most land prices have fallen: some are as much as 80% off their peak. That houses also depreciate in value constrains consumption and adds to deflationary pressures; which in turn pushes people to be particularly cautious savers (more than 50% of Japan's household wealth is kept as cash in bank accounts) and helps to keep interest rates barely above zero. To remedy the problem, the prime minister, Yasuo Fukuda, this month plans to introduce new tax rules to encourage the construction of more durable buildings. Under a draft of the “200-year homes” policy, national, regional and municipal property taxes may be reduced by between 25% and 75% for up to seven years for houses that adhere to robust building standards. Mortgages for such homes can be longer (50 years as opposed to the traditional maximum of 35 years) and building approvals will be simpler. Property experts think these measures are too timid, however. They argue that a true market for used homes needs standardised methods of construction, as well as more transparency about the quality and value of houses. Far more generous tax incentives are vital too. Until then, homes in Japan will continue to fare like the country's ubiquitous electronic gadgets: be treated as disposable. ]]> http://www.c21-smica.com/blog_century21_yusuke/2008/03/200year_homes_1.html http://www.c21-smica.com/blog_century21_yusuke/2008/03/200year_homes_1.html Sun, 02 Mar 2008 13:44:27 +0900 I recently went to California on a business trip to study real estate there. We saw several foreclosure properties in Orange County and went around Los Angeles County as well. One thing came to mind while I was there: Boy, do I really miss it at home! There is nothing like Christmas wearing just a short sleeve shirt and some jeans. It was really warm, great weather. But then I starting eating the food and noticed that I miss Japan too. The taste of food in Tokyo is far superior in my opinion. Just 1 flaw. A lack of Mexican food! Well there are some here in Tokyo but none of them are any good. I've been spoiled living close to Santa Ana with some real authentic food with authentic ingredients and then going to University in San Diego with more of the same. Of course Mexico itself was only about a 15 minute drive from there for a brief dinner on the weekend, but don't ever drive your car across the border!! Your insurance is not covered there; well mine wasn't. Okay I am way off track now. Maybe because I didn't have a chance for a lunch break today =( Anyhow, seeing the status of real estate in Southern California was depressing at best. I saw some beautiful homes that were built in 2006 that have been foreclosed on for over 6 months. That means the former owner didn't even get to live there for a year. It seemed like they bought the place, moved in, lived there for a couple of months, and then defaulted on their payments. I mean what the heck happened? The difficult part of this whole thing is that they owed more money on the house than it's presently worth on the market. Prices have dropped 20% already. I am not trying to write a horror story here but it looks like that was/is the trend. I also don't want to get involved with who was at fault. A lot of businesses have been affected. Touring around Orange and LA counties, I saw a lot of "For Rent" signs that used to be filled with real estate companies, escrow companies, banks... too many! It was really terrible seeing all the great houses with the yards yellowed from the dying grass in the lawn. I believe it is still a little too early to hunt for these bank owned properties just yet. 2008 is projected with down arrows for real estate. I think in the latter part of this year though, it will be a great opportunity to pick up some bargain properties then. I hope! This whole mess has to end sometime and the sooner the better. Maybe that is some wishful thinking and I won't be able to return to California in a couple years to do real estate there. But I want to. I hope this ends as quickly as it began. PS - Please don't tell the realtors back in California that I said not to buy properties yet! http://www.c21-smica.com/blog_century21_yusuke/2008/01/business_trip_to_california.html http://www.c21-smica.com/blog_century21_yusuke/2008/01/business_trip_to_california.html Thu, 17 Jan 2008 20:27:39 +0900 RED. ENJOY, I hope this helps out for you all! ------------------------------------------------------------------------------------------------- After living in Japan for six years, I decided to buy a house because I just got fedup with renting. Why I decided to buy? Apartments for rent are generally of poor quality - the walls are thin and materials used in general are dirt cheap - this is so that the landlord can make as much money profit as possible. The most rent I have payed is 220,000 yen per month and the walls in that place were so thin, you could hear the people next door sneeze. This is the main reason why I decided to buy - I just cant stand other people making noise for me to listen too - especially when its people running, jumping and sneezing! ------True, many of the rental properties are generally not of great quality. I did work a brief stint on the rental team in my company and did see quite a large amount of properties and with this came a wide variety of quality. I would never recommend an apartment unless you would only want to pay 60,000 yen a month for it and you cannot be picky! For many of the newer "Mansion" properties, they are RC (reinforced concrete) and the walls are concrete. These ones are of much better quality and the only noise I've heard in them is when a woman with high heels walks in the common areas outside of my front door.------ We tried different types of rented apartments - mansions, apartments and terrace houses - all literally made of paper and noisy as hell. ------ I have never seen a "Mansion" made of wood and plaster. Rental houses or "bunjo mansion"s being rented out are of much better quality.----- As long as you continue to rent, you will eventually have to move to another place whether its for work reasons or whatever. Looking for somewhere to rent in Japan as a foreigner is an unpleasant experience. Many landlords dont want to rent out to foreigners. When you go into an estate agent, you will be given a book of property leaflets to go through and occasionally see the "No Foreigners" checkbox ticked off. Some leaflets may have "No foreigners or pets"... The worst experiences are the ones where you are taken to look at a place and after you decide that you like it, the estate agent will call up the landlord in front of you and ask whether they are keen on renting to a foreigner. Some landlords just dont know how to say "no" and say "oh, if they want the place, they have to pay an extra 25,000 yen per month for a parking space" and they say this after being told that you dont have a car. Once, I said that I'll take the parking space to see what the reaction of the landlord would be and surprise surprise, they said no in the end. This is one of the most humiliating experiences you will have living in Japan and it sucks. After going through this experience a few times, what I did was to make the estate agent call the landlord *before* we went to look at the apartments - this will save you a lot of time - but you still get the humiliation as the estate agent calls the landlord in front of you. ------Sad but true =(. I've been through this experience first hand and can really relate. It is hard to deny that there is definately, still some blatant racism or prejudice in Japan. Well it is their loss, those landlords don't deserve our money!------ Another thing you cant do when renting is make any form of hole in the walls - you cant put up shelves and if you want to put up a satellite dish or install an optic fiber connection, you have to go and beg the landlord. ------I work in an office that has many departments of different fields in real estate. One of them is the Property Management Department as my company is a developer of many rental properties along with sale properties. Houses, Apartments, Mansions, Offices, Shop and Restaurant spaces, and Parking Lots are the several types of the properties that they manage. Well anyways I speak to them regading these kind of things, not any form of hole in the wall but many forms of holes in the walls will get your deposit effectively reduced. If you live in a property and want to hang or put things up, I recommend using a staples or something that will only create staple sized holes. A majority of the time they redo the wall paper when you move out anyways. If your walls are concrete like mine, I recommend using that clay stuff.------ The best thing (not) about renting in Japan is that you have to pay something called "key money" - in Japanese this is called "Reikin" (礼金(れいきん)) which means "gratuity money". This sum of money which can cost anything from twice to three times the monthly rent, is paid to the landlord as a form of gratuity thanking the bastard. And why should *I* pay the landlord - should it not be them paying me to stay in their place? GRRRRRR! Did I forget to mention that you dont get your key money back? ------I also believe this Reikin is ludicrous. I actually think it is offensive but that is the culture of Japan and I don't imagine it changing anytime soon. Expect to pay 6.5 months worth of your rent to move anywhere. Approximately 1 month of that will be refundable.------ Apart from the key money, you usually have to pay anywhere from two to three times the monthly rent as a deposit. This deposit is used to clean up the apartment after you leave and the landlord usually makes any excuse to keep a good amount of it. I had 60,000 yen charged for a small scratch on the wallpaper near the bathroom when I moved out an apartment once. Wankers! GRRRR, ARGGHHHH! Sorry, I can feel my blood start to boil as I write this. Oh, I nearly forgot to mention that you have to pay the parasite estate agent a months rent for introducing you to the apartment - in Japan, you have to thank the estate agent AND the landlord! Now to add insult to injury, you have to pay another one months rent in advance too! so when I moved into that lousy apartment where I was paying 220,000 yen per month, I had to pay 1,540,000 yen upfront! ------I am hurt he describes all us agents as parasites but many are. I work in the business and I do not trust most of them. 1 months rent for agent commission is standard. For higher end luxury rentals, it is standard to have 0 months key money and 4 to 6 months for deposit.------ Why not to buy? The average life span of a house in Japan is 25 years which is just one of the reasons why folks dont make these sort of purchases as an investment. Generally speaking, when people buy property in Japan, they usually plan to live there until their time is up. ------I've always been taught that the average life span of a wooden framed house is about 30 years. Very short compared to houses in the US. The building materials used and the severe humidity has a factor in this. If you have the budget I recommend building an RC house. You can expect the cost to be twice that of building a wooden framed house but they last over twice the life span, are much safer (especially in an earthquake) and the fire insurance is a fraction of what a wooden house would be!! When your time in Japan is up or you are transferred to a different country, speak to me. I will sell it for you or rent it out for you and manage it. I will get you more in rent than your monthly payments due for the mortgage.------ The price of land in Tokyo varies and you could find yourself paying 1,417,000 yen per square meter in Chiyoda-ku or as little as 291,000 yen in Edogawa-ku (Prices as of 2004. stats from Tokyo Metropolitan Government). Given the high price of land, its no wonder that most folks in Tokyo prefer to rent - most dont even think about buying a house. If you want a decent amount of land in decent area with good commuting routes, you are looking to dish out at least 45,000,000 yen for the land alone. ------The people in the real estate business here price land per tsubo. Thats the size of 2 tatami mats or 3.3 square meters; pretty old school. In Ginza I've seen land sold for 180,000,000 yen per tsubo. Thats over a cool 1.5 US million dollars for a surface area smaller than your car!! But that is commercial real estate. In Setagaya and Oota-ku I have seen 1,500,000 yen for nearly unusable land. Don't expect Capital Gains off this stuff.------ A "mansion" is a term used in Japan to refer to an apartment in a cement building. You can pick up a room in a mansion for cheap and I've seen prices starting at 15,000,000 yen. But be knowist that in general the value of the mansions drop by 10,000,000 yen the day you receive the keys! I do not recommend buying a mansion at all - once you have made the purchase thats it - the end. You cant do anything drastic in terms of layout (if you have your own land you can just knock down the house and rebuild) and you have to join the mansion committee where all owners of each apartment in the mansion have to get together to make decisions on common areas and crap. If you end up with a noisy neighbor then you are really finished. ------The value drop quoted here is bull. If we are talking about a newly built property and you move in the after you purchase and move out and sell the very next year, you can expect a 10% drop if the market stays the absolute same. Also remember that to break even you need to sell the property for what you purchased it for plus 10% to cover the closings cost involved when intially buying the property (7%) and then selling it (3%). Buy and flip only if you plan to do this after 3 or 5 years depending on the market or you get an extremely good deal when you purchased.------ I didnt buy for an investment and just wanted a place of our own. The price of land in our area has been increasing steadily since we moved in though which is nice ^^. The current plan is to move out within 5 years to a bigger place - need more space for all the toys n figures ^^. My goal is to get to my destination within 5 years form now meaning that we would be able to afford a bigger place. Nothing wrong with this house but we kinda want more space... Where to buy? This really depends on what you are looking for - somewhere close to work, somewhere near a park, somewhere with good transportation connections, somewhere near a Gundam store, somewhere cheap etc. Lets say you have a budget of about 70,000,000 yen and you are looking for a new decent sized house and dont mind traveling up to 45 mins to work (1 hour is the acceptable norm ) - I would suggest the west side of Tokyo. During the time I have stayed in Japan, I have always lived in the west and find that it is generally cleaner and safer on this side. Its also easy to get about as its well connected. I did go looking in the east as the price of land is way cheaper but some areas in the east can be quite rough - a bit like the east end of London. If you know anything about Hackney you will know what I am talking about - its where I grew up and is in the book "Crap Towns: The 50 worst places to live in the UK" ! ------I've never worked with a client that has more than a 30 minute commute to work. If you travel 45 to 60 min, you are not in Tokyo anymore. I don't suggest purchasing anywhere outside of Tokyo, well outside of the 23 city wards if you want capital gains. I primarily work in the Jounan area (Minato, Shibuya, Shinagawa, Meguro, Setagaya, Oota city wards), Minato-ku (Shirogane, Azabu, Roppongi, Akasaka) and Shibuya-ku (Ebisu, Hiro, Shoto, Yoyogi-Uehara) are hands down the most popular with all my clients.------ Areas I personally recommend are Setagaya-ku and Meguro-ku - nice areas with good commutation. Price of land in these areas average from 488,000 yen to 600,000 yen per square meter. ------Nice areas for family-oriented, residential neighborhood clients. Toyoko (Tokyo-Yokohama, get it?) line runs right through them and it's a highly desirable line. Tsubo prices (his square meter prices) are much, much more expensive than his quoted averages. I do not know where he got these figures, what era he's from, or what he's smoking (pardon my unprofessionality here but thats how we say it back in the states), though land may rarely found at this price, it would not be very desirable or buildable.------ Where to look? You can also get yourself along to your local convenience store to find magazines filled with information on new properties. ------Free Magazines called Jutaku Jyoho Navi or Towns are everywhere.------ Alternatively, you can just get yourself along to an estate agent and tell them what you are looking for. If you arrived at a decent estate agent, they will have access to a national database called REINS (Real Estate Information Network System). Most properties for sale are registered in REINS and it is likely to have what you are looking for. The only people who can access REINS are evil estate agents so most people end up having to pay the estate agent fees - in our case it was bloody 3,000,000 yen. ------Yes, we all use REINS, not exactly user friendly though. I have never seen a real estate company that does not charge an agent fee. And this fee is always 3% of the property price + 60,000 yen + tax. [(3% + 60,000)*1.05]. Always. And yes, a lot of estate agents are evil but not all. You should definately find someone you can trust and will have no difficulty such as a language barrier.------ What to buy? Well I've mentioned a bit about buying a mansion - dont do it! So you basically have a few choices.... Buy a new house with some land attached. This is the quickest option if you are in a rush and want to start off with something new. This type of purchase is called Tateuri (建て売り(たてうり)) where you purchase a bit of land that comes with a new house built on top. The seller obviously wants to make as much of a profit as possible so you will find that some of the materials used for a Tateuri house can be a bit cheap. The seller will add useless features like floor heating (Yuka Danbou (床暖房(ゆかだんぼう)) - just like what we have in our house. My fart can warm up the room to a temperature higher than the the lousy floor heating. ------You can move in within a month if you select a house already built. Not all sellers use cheap materials though. The Yuka Danbou keeps the floor warm so your feet don't freeze walking around. It also does not emit any odors, is quiet and does not make your nose or throat dry out and hurt. It is not intended to warm up the room but for comfort. Japanese people do not wear shoes in the house and like to sit on the floor------ Buy a second hand house. When you are buying one of these - you are essentially paying for the land and getting the house for free as it will generally be worth next to nothing. Do your research to make sure that you are paying just for the land and a few yen on top for the house - the previous link to the Tokyo Metropolitan Government page is a good place to start. A few people I know buy second hand houses, live there for a while then knock down the old place and build a made to order house - Chumon Jutaku (see below). ------In most cases depending on the age, size, and quality of the house the land is worth a lot more than the house itself. 80% of the price you pay is for the land may be a good rule of thumb for you.------ Buy some land then build a house to order. This is the best option if you are not rushed for time and is called Uri Tate (売り建て(うりたて)). What you do is to buy a bit of land then work with an architect to build your house to your needs. Chumon Jutaku (注文住宅(ちゅうもんじゅうたく)) is the word to describe a built to order house. The only "drawback" is that you are already repaying the loan while you wait for your house to be built - so every month, you will be paying rent at the place you are staying and the monthly loan installment. ------Well said------ The process of designing a house is fairly straight forward - tell your architect how much money you have to spend and she then goes away to come up with a plan which makes you go "Wooo!" But then you find out that she went above your budget and that its going to cost you an extra 5,000,000 yen which then makes you go "You crazy #$&$!" What happens next is that you start to remove bits from the plan like the glass walls or underground nuclear bunker to bring the costs within your original budget. Typically, houses are made of wood and for a 3 story house with 60 square meters on each floor, you are looking at anything from 10,000,000 yen upwards. ------Misinformed... There is no way you can build a 180 square meter house for 10,000,000 yen, this is unrealistic. The cheapest you can build a house for is around 500,000 per tsubo (3.3 square meters) 180 square meters = 54.45 tsubo. This would cost around 30,000,000 for the lowest possible quality house; the bare minimum with no upgrades. For a decent one expect 45,000,000 yen. A nice RC house will run you about 65,000,000. A top of the line house, about 100,000,000. If you intend to dig and include a basement floor, expect to pay more.------ Building regulations There are rules and regulations restricting you to the type of design you want. Here are some of them... Kitagawa Shasen (北側斜線(きたがわしゃせん)) - is a restriction put in place to prevent buildings blocking out the sun for smaller dwellings. This means that depending on the location of your house - you may be imposed to have a diagonal roof. This is one of the reasons why you may have noticed that many buildings in Japan look like they have had a diagonal slice taken out of them ------True------ Kenpei Ritsu (建ぺい率(けんぺいりつ)) - is a restriction to prevent one from using up 100% of their land to build something. Without this restriction, given the lack of space in Tokyo, folks would use up 100% of their land meaning that there wouldnt be any open space! (no spaces between houses). We actually own half of the road in front of our house - without this restriction in place, if I wanted to be a right wanker, I could use up my bit of the road so no traffic could pass. The Kenpei Ritsu for our property is 60% meaning that I can only use up 60 square meters of our 100 square meters to build something. Kenpei Ritsu varies by location - you learn this value when you are looking at land to purchase. ------Most Kenpei Ritsu in the areas I work in are 60%. From an aerial point of view, you can only take up 60% of the land you own. You cannot build on private roads and the area of private road you own cannot be calculated into this 60%. However I have seen Kenpei Ritsu ranging from 20% to 100% There are always exceptions. Remember the lower the Kenpei Ritsu it would be more residential. The higher, the more commercial, thus multiplying the value of the land.------ Youseki Ritsu (容積率(ようせきりつ)) - is a restriction to prevent you from building the tallest building in Tokyo or a Gundam shaped house. The Youseki Ritsu for our land is 200% meaning that we can build something that amounts to 120 square meters (we can only use 60% of our land because of the Kenpei Ritsu - amounting to 60 square meters. 60 X 200% = 120 square meters). We have 3 floors that roughly add up to 40 square meters each but we could build a 4 story house but the total floor space has to still amount to 120 square meters and given the Kitagawa Shasen (diagonal roof restriction), we'd end up with a pretty strange shaped impractical house. ------I have seen Youseki Ritsu range from 80 to 800%. The same as the above applies, the lower the more residential, the higher, definately commercial and really expensive. ***This gentleman's calculations are however incorrect. If his land is 100 square meters, he can build up to 200 square meter house. It is not the Kenpei Ritsu figure multiplied by the Youseki Ritsu percentage. *** ***Also it is very important to know that the max percentage in that residential zone is 200% but you may not necessarily be able to take advantage of this. Based on assumption, since he does own private road, meaning that his land was once larger but some was taken for roads because regulation has it that all roads should be at least 4 meters wide (eventually), his max is probably 160%. This is calculated by 4m (or less) X 0.4 = 160%. If the road was 4.5 meters, 4.5 X 0.4 = 180%. If the road was 5 meters or wider, only then could he take advatage of the 200% This is why along very large streets you find very large buildings flanked on both sides but you don't see large buildings inside neighborhoods with small 4 meter wide streets. He could potentially build 160 square meter house, but basement floors are not included in this so another 80 square meters may be underground. There is a 1/3 rule. Up to 1/3 of your house size may be underground. The max potential with 1 basement floor and 3 floors up is 240 square meters.***------ Zettai Takasa no Seigen(絶対高さの制限(ぜったいたかさのせいげん)) - is a restriction in place to prevent one from building anything over 10 or 12 meters high. ------Some areas have this restriction and some areas do not. For residential purposes, assume that it is 10 meters high. Realistically like he posted above, it is very unlikely he could build a 4 story house like he posted above. There are exceptions though. There are always exceptions.------ Nichiei Kisei (日影規制(にちえいきせい)) - is a restriction to ensure that the surrounding buildings get a certain number of sunlight hours. For example, A building within X meters has to receive X number of sunlight hours per day during the winter season. This restriction also affects the height and shape of the sort of house you can build. ------Correct, for example 4 hours, 2.5 hours.------ How big/small? I've mentioned it a few times but the land of price is on the expensive side - 60,000,000 yen (for example ;-) for 60 square meters of land is not exactly a bargain. The building restrictions could mean that you end up with a property smaller than you initially hoped for. If you are willing to travel further out of Tokyo - you could obviously get a bigger place compared to Tokyo. I guess you will have to get used to the idea that the more land you want, the more limbs you are going to have to part with. ------Absolutely. This ultimately depends on the Kenpei Ritsu and Youseki Ritsu mentioned above. The higher the more expensive the land will be.------ Loan and stuff Applying for a loan and the zillion documents involved in the whole house buying process is just overwhelming. If you are a foreigner in Japan - on a working permit and don't have a Japanese spouse, then you will be glad to know that you can get a mortgage with Mitsubishi Tokyo UFJ Bank (MUFJ). At the time, Mitsubishi Bank was the only bank I knew of that loaned to foreigners in Japan who didnt have permanent residency. Mitsubishi UFJ do have some hefty conditions though - you can see all the documents you need to apply for a loan at MUFJ's site which include yearly income statement, seal registration certificate (this sort of seal), passport, health card etc. And you also need docs regarding the property you want to buy including certificate of purchase, schematic layout of property and a ton of other crap. ------There is a lot of documentation involved involving a home loan. In regards to being a foreigner in Japan, work permit visa, no Japanese spouse, this all depends on where you work and that you do not go over 100,000,000 yen for the mortgage. SMBC and Mizuho also offer loans to foreigners without PR (permanent residence status) but again, this all depends on where you work and how much you intend to borrow on the property. Expect to put down 20% and get a 80% loan. The loan does not cover the 5-7% involved in closing on the property. There are also other financial institutions that are not ran by Japanese people who offer loans to ex-pats. Though their interest rates are higher, you have a chance to get more loan though the interest rates are higher than prime Japanese banks. Interest rates are still cheaper than overseas though. For instance, Suruga Bank, GE Money, Shinsei Bank, New City Mortgage, Nihonbashi Jutaku Loan...etc ***There is also something this gentleman may fail to realize. Mitsubishi Tokyo UFJ will only loan up to 35% of your income (If your monthly income is 1,000,000 JPY, 12,000,000 JPY annually, your max monthly payments, assuming you have no other debt in Japan would be 350,000 yen)*** SMBC Mitsui Sumitomo bank will look at over 40% of your income. Using the same criteria, you can be loaned more and your max limits would be over 400,000 JPY. Same Guy, 2 different banks MUFJ Loan: 79,000,000 JPY SMBC Loan: 92,000,000 JPY <------------- I would choose SMBC if I am eligible. .------ Our estate agent offered to apply for the loan for us but we decided to apply ourselves - always better to try to go through these type of experiences yourself - no matter how painful. It doesn't cost extra to have the estate agent apply for you - they just probably get a kick back for introducing your application to the bank. ------I always recommend going through a real estate agent, only if he has good connections. There are multiple reasons for this. 1) They are much quicker. This can mean you get the loan in time before the property sells to someone else or you lose out becuase it took too long for the pre-approval. 2) They know what they are doing, know what the necessary documents are, have the necessary documents already or have access to them. They also know what to show the bank and what not too. If you supply unnecessary information regarding the property or about yourself, this can complicate things and even sacrifice your chances. We know what to tell the loan agent and what we need to keep quiet about. And believe me, you do not want to be at the Public Affairs Bureau trying to retrieve these docs. 3) They can get a better discount off their interest rates. This guy may have lost out on 0.2% and that can add up big over 20, 35 years. It can make a difference on the amount of your monthly mortgage payments as well. 4) Can easily apply to multiple banks simultaneously. We know your scenario, we know which banks offer what and which will decline to give you a loan. No wasted time there. 5) I do not get a kick back from any of the banks or financing institutions I use. And I do charge 50,000 yen. You would end up spending your own money if you chose to find financing yourself and I could probably save you much more than that in the interest rates.------]]> http://www.c21-smica.com/blog_century21_yusuke/2007/12/tokyo_property_purchase_experi_1.html http://www.c21-smica.com/blog_century21_yusuke/2007/12/tokyo_property_purchase_experi_1.html Sun, 09 Dec 2007 21:41:14 +0900 I read the world news (BBC News International Version) and my former local (Orange County Register, Southern California) news pretty much on a daily basis. Every day I read the news I see a common theme, "US SUB-PRIME PROBLEMS", "US housing market crash", "Greenspan warns on credit crunch", "Fed warns of slowing US economy", "Carnage on Wall Street as loans go bad". hits, losses, leaks, slowing, resigns, troubling, crash, warns, chaos, sours, bad, carnage, squeeze, dampen, crisis, devastating, problems, wrong, departed, hidden, concealed, exposed, wiped out, lay off, cutting, limiting, distressed, dramatic, dwarfed, strike, refusing, plummeted, undisclosed, dry up, turmoil, expensive, difficult, worries, harder, tightening, hurt, restraint, slumping, crunch, frozen, uncertainty, lack, terrifying, fallen, foreclosure, liabilites, cost, worst-case scenario, against, sensitive, fall, recession, inflation, fear, dropped, lost, difficult, lower, impaired, fallout, severe, underestimated, off-balance, written off, exposed, risky, force, dried up, debt, lack of certainty, lack of information, predatory, wrong, broke, dangerous, complex, worse, abusive, fraudulent, stress, falling, supposedly, failed, careful, gone, disaggregated, less, trouble, collecting, collateral, poorly-regulated, exaggerate, deterioration, correct, broken, damage, painful, repossess, defaults, flawed. wow - I felt absolutely terrible after reading that. But I continue to read them articles every day. I've never seen so many words to negatively describe something. And to think I found all of them in just a single article. My first impression was I am so happy I am not in the States. I am so happy that I am not working in real estate in Southern California right now but in Tokyo. Then I started thinking. I am all for freedom of speech, and writing what you think and feel or writing what sells. These kind of things sell newspapers but it certainly doesn't help consumer confidence. Nor does it help the image of my fellow clients and friends, the investment bankers, mortgage brokers, the lenders, the real estate brokers and realtors. It does not help the the builders of homes, the construction workers, the moving companies, the advertisers, or the re-modelers, the re-financers, the investors and bond holders, shareholders, buyers, sellers, or the dollar. I understand the need to tell a story, the media assumes that as their responsibility, and we expect it from them. But does anyone else feel that the way they tell it is a little excessive? Sometimes I would like to read an article that shows some positive things. There must be something good coming out of this. As for me, what I see is that there is a great market for rent on the horizon. If people can't afford to buy with the interest rates where they are or because the lenders have become stricter with their lending standards, then that leaves a lot of people that were once "homeowners"or potential future buyers as renters. I can only see the rent market grow. What else I see is that if you have a lot of cash and do not need require financing for a home loan, over the next couple of years, prices will become much more affordable. Much more affordable than they were 2 years ago. An opportunity to get a property that isn't priced over what it's worth. The inflated prices in my hometown in Irvine was ridiculous; I told my parents to sell 2 years ago because I assumed the market was pretty much at it's peak. Their property tripled in selling price in 10 years. I believe in this next year or the year after, people will be able to get their houses without over-extending themselves. The median house prices in the OC have not been affordable to the median income folks for awhile now. That was never a great sign but I would love to see some real people, some real families, not speculators attain that "American Dream". At the end of the day though, real estate has always been a solid investment. It obviously has it's ups and downs but historically, if you look at property it always comes back. It always goes back up. ** I assumed no one ever read my blog but since a client of mine told me he read it, I will start to take this more seriously. Thank you for the people that do read my blog. - Jason, your native English speaking realtor in Tokyo]]> http://www.c21-smica.com/blog_century21_yusuke/2007/11/us_subprime_crisis.html http://www.c21-smica.com/blog_century21_yusuke/2007/11/us_subprime_crisis.html Sat, 17 Nov 2007 21:40:17 +0900