home buying

[james]

so my wife and i are tentatively in the market to buy a house. i'm hoping within the next year to 18 months depending how a business venture i'm working on goes. would like to get opinions and advice from others who have made a home purchase here.

we have started looking at model homes and have seen a total of three by two different companies - sekisui and eyeful. we'll be looking at more by two other companies on sunday.

my background - i've been living in a less than modern house with my wife's parents out in inaka. it's spacious but it's quite old, 70 years or so. it predates the bubble-era crap so structurally it's fine and will likely last a while longer. simple fact of the matter is though, that it's full of mother-in-law's junk, cold as fark in the winter and just a pita at times. especially the kitchen. for various reasons i want our own place and space. something modestly sized but not too small, modern and comfortable.

overall i think a lot of progress has been made since the crap that was being built 20 and 30 years ago. having never lived in a modern house here, i'm so far impressed with what they are doing. things like insulation, toilets upstairs, double-paned glass etc. not having to go down a flight of stairs at 3 a.m to take a piss in a frigid (4c) house in februrary will be quite nice.

i was impressed with sekisui. steel framing for one. other construction details such as how the exterior is done, how the supports are anchored, insulation and other energy efficiency improving implementations and wall cutaways etc are all shown. rep took the time to explain these. after guiding us through the house, the rep sat with us and showed us different styles, things that can be customized etc etc. all very professional. filled out a little survey which was focused on helping them determine the style and type / layout of house you want. the focus seems to be on quality and they were not at all pushy. we were told the model house we looked at is about 4000 man, pretty much what i expected it to cost. no financial questions at all.

eyeful (awful?) on the other hand.. i have to admit their two model homes *looked* nice but there just didn't seem to be any attempt to show craftsmanship or what lay behind the wallpaper. the rep we talked to was nice enough and the houses we looked at were as nicely done as the sekisui houses, on the surface at least. no idea what was underneath. where things really went downhill was afterwards in the sales office. i was completely turned off by the tenchou there. older guy, maybe early 50s (younger rep also sat in). seemed very focused on the financials and was a little pushy for my liking. like a used car salesman. *no* questions about likes and dislikes, styles etc. first thing we were given was a form asking various financial questions. he seemed disappointed that despite being an fg, i'd be able to arrange my own financing. even the younger rep seemed uneasy with him. i don't know if all their sales offices are like that, but i'm listening to my instincts and staying away from them.

anyway, would be curious to hear about others' experiences and advice. companies that are recommended, places to watch out for, any underhanded practises i should be made aware of etc etc.

[Mulboyne]

There are a few thoughts in the FG Thread is buying a house such a bad thing? including a link to Tokyo Property Purchase.

[james]

for redirecting me to that link. much appreciated.

[Jack]

I'm also looking at buying a house in Japan, Central Tokyo area by the Keio Line. Looked at a few model homes but I noticed that unlike model homes here, the one's in Tokyo, at least the ones we looked at, were not actual model homes but sample homes to showcase the builders capabilities. They all want you to have a lot and call them up to design a house specially for your lot. Anyway, we are now shopping for a lot in a narrow area that we have selected. This place is 10 minutes to Shibuya or Shinjuku and is in high demand so not much land is available. Plus we want something at least 20 meters wide. I know good luck...

In my opinion, it's a great time to buy real estate in Tokyo area. I am not sure about other regions of Japan but in Tokyo you can't go wrong after prices have come down so much. The population decrease that is widely expected should have a negative impact on real estate prices in outlying regions first but should hold up 20 to 40 years after the decline has started in the major centers and even longer in Tokyo because of the influx of domestic migrants to Tokyo. Capital cities where land is scarce always hold up well in adverse demographic conditions. Having said that, a 1,000 square feet lot is still over US$700,000 in central Tokyo.

[Greji]

Having said that, a 1,000 square feet lot is still over US$700,000 in central Tokyo.

And that in the more reasonable (or if you will) cheaper areas! That's why I live in the mountains!

[Jack]

And that in the more reasonable (or if you will) cheaper areas! That's why I live in the mountains!

Actually gboothe, it's in a very desirable area and 3 minutes walk to the station. I would tell you where it is but it would give too much away about me and you can appreciate the sensitivity of doing so here

Needless to say though, you can't build much on that pice of property and you need at least double that size and what I have been told is that land in Tokyo is like diamonds, 2 carats is more than double the price of one carat. So a 3,000 square feet lot would be more than 3 times the price of a 1,000 square feet lots because it's so rare and in demand.

[Mulboyne]

I have been told is that land in Tokyo is like diamonds, 2 carats is more than double the price of one carat. So a 3,000 square feet lot would be more than 3 times the price of a 1,000 square feet lots because it's so rare and in demand.

That is what sellers believe now but that is just a function of the market. They certainly didn't believe that as little as five years ago. In general 3,000 square feet should always be worth more than three separate plots of the same area but it was possible to do better than that as a buyer which made Tokyo attractive for real estate investors. It all depends on the condition of the seller. Also, if it is empty land then it will generally be worth more than a land with a structure because most buyers will want to demolish and build anew. A bigger plot can still be hamstrung by local building regulations which should always be a factor in your calculations.

[Greji]

Actually gboothe, it's in a very desirable area and 3 minutes walk to the station. I would tell you where it is but it would give too much away about me and you can appreciate the sensitivity of doing so here

Good points! My whole family and I are perverts, so you wouldn't want us showing up and hot breathing on your windows!

[GomiGirl]

To the original poster, James. I too am dismayed by the poor level of craftmanship in modern Tokyo houses. It seems they are only built to last as long as your 20 year mortgage and by then they will have no value other than the land. I have been watching a few new places being built in my neighbourhood recently and there is no insulation and little attention to detail.

If you are wanting something that will last, have you considered talking to an architect? I do have a contact here if you are interested. Get something built that fits your family and lifestyle and you can oversee all of the important details. The pre-fab Seikusi houses etc seem to be the McHousing that is just popping up everywhere.

Where I come from, houses are supposed to appreciate in value rather than depreciate like a car. Plus if you get a house made from wood, then there are some tax advantages for you with the "wooden house" loophole.

[GomiGirl]

Actually gboothe, it's in a very desirable area and 3 minutes walk to the station. I would tell you where it is but it would give too much away about me and you can appreciate the sensitivity of doing so here

You actually think people care where you live??? Delusions of grandeur again.

[canman]

I knew Tokyo was pricey but not that bad. We have 4600 square feet, and our house is 2600 square feet, but it sure didn't cost the sums that you people are talking about. But we live up in Aomori-ken, where the land is plenty, and cheap and the women are the best. Right AK!!
Jack, what did you do fall on your ass and sue some poor bastard to get all this money? I haven't heard of a lot of FG buying land and building houses in the middle of Tokyo. Like GBoothe said, most head for the hills.

[Jack]

You actually think people care where you live??? Delusions of grandeur again.

I sort of don't need your approval on my life because I'm doing just fine as it is but I live in Canada so that is not an issue. But telling the area where we are looking for property could narrow someone's attention who might be able to identify me. That's all. Go back to your garbage collecting job GG.

[Jack]

I knew Tokyo was pricey but not that bad. We have 4600 square feet, and our house is 2600 square feet, but it sure didn't cost the sums that you people are talking about. But we live up in Aomori-ken, where the land is plenty, and cheap and the women are the best. Right AK!!
Jack, what did you do fall on your ass and sue some poor bastard to get all this money? I haven't heard of a lot of FG buying land and building houses in the middle of Tokyo. Like GBoothe said, most head for the hills.

You are talking Aomori and we are talking central Tokyo. Different animals. Canman, you are Canadian right? Well bud, this is all my money. When we got married I promised the "Warden" that we would move to Tokyo permanently so we are basically following on that plan. I know most FG in Japan are English teachers living hand to mouth. We are planning that when we move to Tokyo I will not work anymore. Our move is planned for the next 3 years.

[Iraira]

We are planning that when we move to Tokyo I will not work anymore. Our move is planned for the next 3 years.

That means I have to wait another 3 years before I can start stalking you. Damn! Hayaku! Schnell!

[(1VB)freels]

I am really wanting to buyin J-pan after I Retire from the navy. Anyone have any VA info for a home loan would be much appreciated. Thanks aheat of time. I love Nipon.(i is drunk)

[Iraira]

I am really wanting to buyin J-pan after I Retire from the navy. Anyone have any VA info for a home loan would be much appreciated. Thanks aheat of time. I love Nipon.(i is drunk)

at 1:50pm on a Wednesday....gotcha...warming up the liver for the weekend!

[(1VB)freels]

at 1:50pm on a Wednesday....gotcha...warming up the liver for the weekend!

It was Tuesday night for me.... Look at my Location.

[Iraira]

It was Tuesday night for me.... Look at my Location.

Like I said, Tuesday night....warming up the liver for the weekend!

[Buraku]

And that in the more reasonable (or if you will) cheaper areas! That's why I live in the mountains!

I still think the property market in Japan is a load of shit, they mostly sell over-priced dog kennels that are unfit for humans to live.

If you are investing you should invest in land although it can be more tricky to get your hands on it, with 130 million Japanese living in an area smaller than Texas or France/Alaska you can see why the demand is high,
plus good land can always be sold off as something else, company construction site, throw a little mo' J-concrete on a field and you got a top class Japanese cark park, a bit of paper work gets you to sell it as a housing area, an the J-farmers are heavily subsidized and old J-grannies love growing stuff in their tiny little fields.

[Jack]

I still think the property market in Japan is a load of shit, they mostly sell over-priced dog kennels that are unfit for humans to live.

Are you okay Buraku sama? You sound rather constipated today.

I don't know what kind of a shithole you live or lived in or have seen, but the J-houses that I stayed in are fantastic. Cleverly designed, very clean and pleasant. Mind you, damn cold in winters but heck, like you say, when you live in a country as dense as Japan, you can't have everything.

In Japan you are never buying a house, you are buying land. The house is meant to be demolished by a new buyer to build a new house.

[Mulboyne]

If you are investing you should invest in land although it can be more tricky to get your hands on it, with 130 million Japanese living in an area smaller than Texas or France/Alaska you can see why the demand is high

No, I can't see how that explains anything. Land prices fell for over a decade and, since I don't recall the size of Japan increasing in that period, I tend to think that demand couldn't have been high.

[dimwit]

Spectulation was the reason land prices were so high and lack of speculation is why the prices have been dropping in most parts of the country. Where I live, housing is affordible but cramped, both in terms of space and zoning.

[Greji]

Are you okay Buraku sama? You sound rather constipated today.

He does have the dog, but I'm not sure about the kennels. Also, I don't know what is "tricky". You got the money, or the bank behind you and you can buy anything you can afford. Same as anywhere.Depending how long you have done business with the bank, the visa may not even be a question.

At any rate, you are right on about the houses. If you have a house built or are buying a new one, they are depreciated like a car and damn near as fast. The rule of thumb is ten years equals 0 yen for the house, even if brand new when you bought the property. If it is a solid concrete block house, they might give you 15, 20 at the most, before they declare it zilch.

I've played around with real estate in Hokkaido and Tokyo and the difference in location prices as you say, can be mind boggling! Everything from price per tsubo, rent, or parking fees are so far a part its hard to calculate. You can rent a parking space for a car in the suburbs of Sapporo for around 5,000 yen a month for a good place. My office in Tokyo charges 60,000 per car for a month. Bit of a diff!

[Mulboyne]

Speculation was the reason land prices were so high and lack of speculation is why the prices have been dropping in most parts of the country.

It certainly played a part but factors like the decline in average take home pay also contributed. The main driver behind real estate pricing is the cost of finance, namely, the interest rate. If your income remains stable and mortgage interest rates halve then you can afford to pay twice as much for a property and maintain the same monthly repayment. The same works in reverse. If your income is declining then that will counterbalance a decline in rates, especially since it creates uncertainty about future income.

Some economists believe that the theory implications of Japan's lost decade have not been properly investigated and the reaction of asset markets is one area. The BoJ moved to a zero interest rate policy (mortgage rates were never zero but they were low) but there was no follow through in asset pricing. Some argue that there was a credit crunch which basically means they think the banks weren't making loans at low rates even though there was demand. Others believe there was no demand for loans.

In some metropolitan areas, real estate prices have been increasing but it is an interesting question what has tipped the balance. Some refer to international pricing and point out that real estate prices in London are on a par with Tokyo now. However, that isn't all down to Tokyo prices falling 60-80%: London housing has tripled in the last decade on the back of low interest rates, a strong economy and the largest influx of immigrants to the country since the revocation of the Edict of Nantes in 1685 so the comparison is with boom pricing. If housing markets elsewhere fell 20-30%, I'm not sure that Tokyo would follow them down.

Are the rises in Japan speculative? It doesn't feel that way but prices are undoubtedly high by any standard other than the bubble so it isn't just speculation that creates high property prices.

[MrUltimateGaijin]

wouldn prices in kanagwaw go down? (nicer than tokyo) because ive heard and read that along with declining population people are moving inwards(so tokyo prices may keep rising despite population drop.

[Jack]

wouldn prices in kanagwaw go down? (nicer than tokyo) because ive heard and read that along with declining population people are moving inwards(so tokyo prices may keep rising despite population drop.

Exactly why I said that Tokyo prices will hold for a very long time after population starts declining.

[GomiGirl]

In Japan you are never buying a house, you are buying land. The house is meant to be demolished by a new buyer to build a new house.

Sadly this is true. This just goes against the grain with me which is why I am not likely to buy a place in Tokyo. Perhaps in rural japan for a beach or country house but with all the properties I have bought and sold over the years I have always made a profit.

A house as a depreciating asset just makes no financial sense to me. But the houses that are just chucked up here are not very well built anyway. A good apartment that has land rights is a different spin on it though.

I was just brought up to think differently about bricks and morter investments. I shall stay with the stock market at present.

[Mulboyne]

wouldn prices in kanagawa go down? (nicer than tokyo) because ive heard and read that along with declining population people are moving inwards(so tokyo prices may keep rising despite population drop.

That has definitely been happening. Whether it continues to happen is not certain although there isn't any sign of any imminent change. It is difficult to remember the way that city centres were abandoned by the middle classes in parts of the West. People moved to the suburbs to escape crime, pollution and poor schools. Many also wanted to avoid immigrants or, in the US, black communities. Struggling artists and squatters were able to move into what are now fabulously expensive pieces of city centre real estate. That trend shifted into reverse about 25-30 years ago.

Japan has never set a higher value on the suburbs but its not impossible that rising crime or immigration could play a role in years to come to change that. Then, of course, earthquakes are another wild card. A serious Kanto earthquake might make people reconsider high density living and the safety of reclaimed land. Conversely, others think it might spark even more interest in the centre as zoning restrictions would probably be relaxed.

[MrUltimateGaijin]

despite the trend inwards, i still see many new appartments going up in kanagawa/outer tokyo. this will surely have to lower the price of older appartments, even if they are of equal qualiy

[Mulboyne]

despite the trend inwards, is till see many new appartments going up in kanagawa/outer tokyo. this will surely have to lower the price of older appartments, even if they are of equal quality

Proximity to the station is still the major factor determining rent. The quality gap has to get very large before it makes more economic sense to knock a condo down and rebuild it.