TOKYO, 20 September 2003 — Gone are the days when stressed Japanese salarymen dreamed of a house with a garden in the suburbs, no matter what the commuting time to work.
Suddenly everyone wants to live closer to their office in central Tokyo — and the trendy new shops and restaurants that have sprung up there despite a decade-long economic slump — and deflation has made it more affordable for the average Tokyoite.
The figures tell the story.
Despite the sluggish economy, the number of new apartments that went on sale in the Tokyo metropolitan area jumped by a third to 88,516 in 2002 from 66,308 in 1998, according to Real Estate Economic Institute, a private think tank.
During that same period, close to 80 percent of newly built apartments were sold within one month of going on sale.
In contrast, nationwide new housing starts fell to 1.17 million in 2002 from 1.19 million in 1998.
“We would never buy a house if it’s in the suburbs,” said 27-year-old company employee Mayumi Ishibashi, who recently bought an apartment with her husband in Suginami ward, just a short train ride from Tokyo’s big Shibuya shopping district.
“We want to live in a convenient area, even if it costs more. So we would move closer to the central area but not further out.”
“In the past everybody wanted to live in more fashionable and convenient downtown areas but it was too expensive,” said Takaya Endo, executive director of the residential development division at Mitsubishi Estate Co. Ltd., a major real estate firm.
Deflation has changed all that — and for the better, in contrast to the ills it is blamed for elsewhere in the economy, from depressed consumer sentiment to the huge losses run up by the banks.
Land prices in Japan have fallen to a third of what they were at their peak in 1992.
A government report this week said that, on average, residential land prices fell 4.8 percent in the year to July — the 12th consecutive annual fall — after a 4.3 percent fall the previous year.
In central Tokyo, however, the decline in residential areas slowed to 1.8 percent from 2.4 percent.
“Behind the slowing decline in central Tokyo residential land prices is continued demand for condominiums and other dwellings in the city center, with prices now at more affordable levels and convenience increased by redevelopment projects,” the Ministry of Land, Infrastructure and Transport said.
The average price of new apartments in the Tokyo metropolitan area has fallen by almost 50 percent to 1.69 million yen ($14,660) per tsubo — a traditional measurement equivalent to about 3.3 square meters — from a peak of 3.08 million yen in 1990, according to the Real Estate Economic Institute survey.
Developers say cheaper prices, plus competition among builders to offer better quality housing, have led to greater demand from those who in the past may have been happy to rent — single females and double-income couples, for example — and also from parents whose children have left home.
Park House Shiba Tower, a 32-story apartment block located in Tokyo’s Shiba office district close to the head office of computer giant NEC Corp., has almost sold out despite its narrow target buyers of double-income couples and empty-nesters.
The biggest unit in Park House Shiba Tower has a total floor area of 130 square meters (1,400 sq ft), even though it only has three bedrooms. The average unit for family use in Tokyo has three to four bedrooms in a tight 80-to-90 square meters.
The new-style apartments, aimed at relatively affluent couples without children, are likely to become more common.
The country’s fertility rate is at a record low 1.32 child per woman and Japan’s population, currently around 127 million, is expected to start shrinking soon, perhaps as early as 2005.
Masato Kawamura, a 38-year-old employee, lives with his wife in a high-rise apartment in central Tokyo overlooking city landmarks such as Tokyo Tower and has no desire to find a bigger house in the suburbs, as long as they have no children, at least.
“I really can’t think about moving somewhere far from the office to buy a house,” he said.
Competition in Japan’s hard-pressed building sector means that the home-buyer is getting a far better deal all round.
“The competition among developers heated up, pushing down prices but at the same time raising the quality of urban apartments,” said Mitsubishi’s Endo.
Popular new features include separate elevators for those with pets, bathrooms with bigger washbasins and open-plan living areas that allow people to use the kitchen appliances while talking to those in the lounge.
Young people with steady jobs are now more inclined to buy than rent when they decide to put down roots in the center of town, attracted by such features and comparatively low prices.
“There wasn’t much difference in price between buying and renting an apartment,” said 28-year-old Kei Matsumoto, who lives with his wife and son in a Tokyo apartment bought two years ago.
“To us, the time we spent on trains commuting to work was the biggest waste,” he added, working out that it now took him about 30 minutes to get to his workplace by train, about half the time spent commuting by the average Tokyo salaryman.