Interview with a Tokyo realtor
Hiroya Yoshizato is Creative Director and a founding partner of realtor/architectural firm Speac Inc., which runs a unique website -- realtokyoestate.co.jp -- dedicated to introducing Tokyo apartment hunters to a variety of alternative housing options.
We sat down with Mr. Yoshizato to learn more about how the Tokyo residential market really works.
CNNGo: So first, tell me a little about the housing market in Tokyo.
Hiroya Yoshizato: Right now in Tokyo I would say that over 90% of real estate listings are geared toward the mass market. That's like if 90% of Japanese people all drove the same model of Toyota, or 90% of people all wore clothing from Uniqlo. Most Tokyoites simply choose an apartment with mass-market appeal. Few options outside of the pre-defined box are available, and people rarely have an opinion. That just seems strange and sad to me. Compare that to Western countries, where people put a lot more thought into where they live.
CNNGo: Why do you Tokyo residents have such low standards?
Yoshizato: Most have been conditioned to have only five or so considerations when getting an apartment: a relatively new building, separate toilet and bath, proximity to train or subway, hardwood floors (as opposed to tatami) and a southern exposure. These are the bare minimum of what Tokyo residents are looking for. Any place that lacks in any of these areas is an "undesirable" apartment.
CNNGo: We take it you don’t buy in to that.
Yoshizato: Right. If you change your point of view, you start to see what else is out there. That’s where we come in. We deal exclusively in listings that provide additional value by not clinging to the stereotype of a "good" Tokyo apartment. For example, maybe the place is far from a station but it has a cherry blossom tree on the premises. And maybe it’s in an older building but it's one that has been lovingly designed and constructed, with a great atmosphere.
We want to show the people of Tokyo that there is comfort and fun to be found in a home that is outside the typical boundaries. We go out searching for the most attractive listings we can find and post them on our website.
CNNGo: I want to go back to what you said about the age of a building. I don’t want to paint in too broad of a stroke, but it seems to me that European and American cultures value their homes not just as physical buildings but places with sentimental value worthy of preservation. Is that not true in Japan?
Yoshizato: I think the Japanese real estate market is still immature. Appraisers don’t recognize the value of older buildings. It’s pretty common to tear down a building and rebuild after 50 years, even if there aren’t any actual deficiencies in the building itself.
Part of that reasoning might come from the latent Japanese psyche. We are a "wooden" culture, not a "stone" culture, and we have a penchant for rebuilding. Take the shrines at Ise for instance, which are ritualistically rebuilt every 20 years.
Honestly, though, it’s mostly about money. Developers profit by constructing new properties, and they’ve convinced consumers that houses are like appliances: they need to be traded in for the newest model. Houses in Tokyo are essentially manufactured products.
CNNGo: But how does that affect land values when people are constantly rebuilding? Aren’t the buildings worth something?
Yoshizato: No. Let’s say you have a plot of land in Tokyo worth ¥100 million and you build a house on it. Assuming land values are the same, in 50 years your asking price will be 80 million. Not only will house be worth nothing, but the buyer will ask you to deduct the 20 million it costs to demolish the house from the asking price of the land!
CNNGo: I have to ask about something that mystifies us all: what’s up with reikin "gift money"? I understand having a deposit, but why do we need to pay a fee just to get a lease?
Yoshizato: I think it’s a remnant of old Japanese culture. In the past, a few elite landowners would rent land out for farming and residential use, and they were always the most powerful families in each area. There was a custom to pay a large fee to these families in gratitude for the land, and I believe that has carried on in the form of reikin.
Here’s the thing though: in actuality, most reikin goes to us -- the brokers. The landlords pay us a finder’s fee for introducing a tenant, and they use the reikin so that they don’t have to pay anything out of pocket. That’s pretty common. So the fact of the matter is, even if reikin is abolished, that cost needs to be made up somewhere, so rents will just be increased. It’s as simple as that. Either it’s done as a lump sum or it’s done in installments in the form of rent.
CNNGo: Last question: where do you see the real estate market in Japan going in say, ten to 20 years’ time?
Yoshizato: I think, on the whole, you will see an overall decline in rent. That being said, I think there will be a definite widening of the gap between "desirable" apartments and others. The rent at the good ones will go up and "loser" listings will go down -- creating somewhat of an empty spot in the middle. This meshes with the overall earnings gap that has already become a problem in Japanese society.
CNNGo: I see. Thank you so much for your time. I should come see you when I need a new place!
Yoshizato: I’m sure we’ll have something interesting to show you. (laughs)
