Find your ideal property: Increase your asset value with smart choices

The importance of choosing a property

About a year ago, I started looking for a property with the aim of renovating a second-hand apartment. When I was about to give up a little because I couldn't find a property that met my desired conditions, I finally found the ideal property. It is a 28-year-old apartment located in a prime location in the city center. It is a 3LDK with an area of about 70m2, which is not large at all, but the price is affordable and has good access to the city center. Finding a rare property located on the upper floor facing south was worth not giving up and continuing to look for it.

What I particularly value is choosing an apartment that has asset value even in an old building. An apartment with asset value refers to a property that can be sold at a reasonable price even after purchase.

Newly built apartments are very expensive, and their value often drops from millions to tens of millions of yen immediately after purchase. On the other hand, the price of second-hand apartments has already dropped, so the price at the time of sale will not drop that much. However, when actually selling, if there are similar properties in the neighborhood, the competition will become intense and the price will often be lower than the market price. It can be said that such properties have low asset value.

What is an apartment with high asset value?

A specific example of a property with a low asset value is a property with a lot of supply with the same floor plan and specifications. This is a so-called apartment for the public. In addition, apartments in the suburbs far from the city center can keep the price down because the land is cheap, but it is often difficult to find a buyer when selling.

There are two types of condominiums: for the masses and for the wealthy. Condominiums for the public have a lot of supply and many of the same floor plans and specifications, so it is a reasonable and good choice when buying, but there are many similar properties when selling, and competition will be fierce.

On the other hand, the original absolute number of apartments for the wealthy is small, and the price is reasonable even if it is used. Therefore, the number of buyers is limited. Nevertheless, the price of apartments for the wealthy is generally lower than when they were newly built, and there are few people who want to buy them, so it can be said that they are likely to get properties with high asset value at a good price.

Looking back on the history of Japanese apartments

Looking back on the history of Japanese apartments, you can see the characteristics of properties with high asset value. The first apartment sold in Japan was the "Miyamasuzaka Building" built in Tokyo in 1953. This building is an 11-story commercial and residential complex, and since there was no mortgage at that time, the selling price of 1 million yen was mainly aimed at the wealthy in an era when the annual income was about 200,000 yen.

With the 1964 Tokyo Olympics, private companies began supplying luxury apartments for the wealthy. A typical property is "Co-op Olympia" located in front of Harajuku Station. In 1964, the selling price reached 100 million yen, and it is also famous as the first 1 billion yen apartment in Japan.

In the late 1960s, bank mortgages were also applied to condominiums, and in 1967, "Shuwa Gaien-mae Residence" was built as Japan's first mortgage-applied apartment. From this time, the selling price of condominiums began to drop, and the popularity of condominiums increased. After that, the housing finance treasury's loan system began, and there was a nationwide apartment sales boom.

In the late 1980s, more than 100 million yen of ultra-luxury properties were supplied to the city center due to the impact of the bubble economy. The apartment at this time was characterized by tiled exterior walls, luxurious common facilities, automatic locks, and large lobbies in pursuit of individuality and high quality. "Hiroo Garden Hills" can be said to be a representative example of a Japanese vintage apartment built in Shibuya Ward, Tokyo.

In the early 1990s, apartment prices began to fall due to the collapse of the bubble. Due to the collapse of the bubble, the construction of condominiums itself has drastically decreased, and properties with reduced exclusive area have appeared to lower selling prices. In 1995, in response to the Great Hanshin-Awaji Earthquake, interest in structure and basic performance increased, and new technologies such as earthquake-resistant structures and seismic isolation structures were developed.

In the late 1990s, the apartment boom returned, and the quality was greatly improved. The standard floor slab is about 15cm to 18cm thicker, and the floor finish has also evolved to "double floor", and the soundproofing performance has been improved. The "out-frame construction method" was adopted to keep the price down, and the effective area of the room was increased without expanding the exclusive area. In addition, "reverse beam high sash" was introduced to increase sunlight and a sense of openness, and equipment such as automatic locks and home delivery boxes, which are now common, has also become popular.

In the 2000s, the "Act on the Promotion of Quality Assurance of Housing, etc.", the so-called "Quality Assurance Act", was enforced in 2000, and third parties inspected and evaluated properties. This is an era in which trouble prevention of defective housing has been strengthened. In 2003, the revision of the Building Standards Act made the installation of ventilation equipment mandatory, and 24-hour ventilation and bathroom dryers were also popularized. "All flooring without Japanese-style rooms" became common, and building materials could be procured cheaply due to the appreciation of the yen, and high-quality apartments were built.

The 2008 Lehman shock caused a global recession. After the Lehman shock, the number of newly built condominiums was reduced to about half of the former mass supply era, and the supply attitude of the condominium industry changed from "quantity to quality". Against the background of high construction costs, labor shortages, and difficulties in securing land, we have shifted to high-priced and high-quality properties (tower apartments and brand properties) mainly in the city center and good locations, and the era of mass supply has come to an end.

Currently, in newly built apartments, there are many cases where the selling price is reduced by simplifying ancillary equipment, lowering the grade of components, and simplifying the floor plan in line with soaring land prices. Construction costs are unlikely to decrease in the future, and the supply of land is limited, so new construction prices are expected to remain high.

If you look back at the history of condominiums in this way, you can see that the grade, location, price, etc. of the building have their own characteristics depending on the era. Old interiors can be changed by renovation, but the most important points are the parts that cannot be replaced, such as location, building quality, sunlight, and view. Regardless of whether it is new or second-hand, these factors have a significant impact on asset value.

▶︎We will help you from finding a property to renovating an apartment. Please feel free to contact us.

IN THE LIGHT Interior Architecture

1-15-16 Musashigaoka, Kita-ku, Kumamoto City, Kumamoto Prefecture, 861-8001

Info@inthelightinteriors.com