Real Estate Industry in Japan slowly improves

The Real Estate Economic Institute of Japan conducted a survey last April of 2019 which revealed that more than 60 high rise apartment buildings are already expected to be completed sometime within the year. This marks a welcome development in the real estate industry with the slow but constant increase in the construction of apartment blocks since the industry’s significant decline during the gap between 2009 and 2010.

 

Photo credit to: https://www.nippon.com

Based on the industry’s history through records of the Real Estate Economic Institute, only about five to ten tower blocks (about two to three thousand apartments) were constructed in Tokyo annually during the period in the 1980s and the 1990s. In 1997 however, relevant changes and amendments were made to Japan’s Building Standards Act which effectively loosened certain restrictions thereby paving the way for the industry’s boosted development. Tower blocks – residential buildings with at least 20 stories – became sought-after investments due to their value and marketable nature.

 

However, the market suffered a considerable hit due to the global financial crisis in 2008 and the Great East Japan Earthquake in 2011. These conditions deterred potential investors due to fears of losing their investment by natural factors.

 

Despite the market’s slump, records compiled by Nippon.com showed that more than 121 new tower blocks were completed across Japan in 2009 and only about half – more or less 65 – were constructed in 2010. Since the industry’s boom, it reached an all-time low in 2016 with only 32 newly constructed tower blocks.

 

From then on, the real estate industry of Japan experienced sustained developments with the construction of 40 new tower blocks in 2017 and 45 more buildings in 2018.

 

Through the completion of the apartment tower blocks scheduled for this year, Japan will have a total of 18,988 apartment buildings nationwide. Half of these tower blocks are set to be erected in Greater Tokyo.

 

Reference: Japan’s Residential Tower Block Boom

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