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Japanese suburban single-family homes are experiencing a renaissance

With the release of the 2022 benchmark land price by the Japanese Ministry of Land, Infrastructure, Transport, and Tourism, the number of prefectures and prefectures with rising residential land doubled from the previous year, to 14. It is not just the Tokyo suburbs that have seen a rise in population; core cities like Fukuoka and Sapporo, as well as their surrounding areas, have seen a rise in population thanks to government incentives for redevelopment. Residential land in a desirable location and environment is in high demand, while the value of land in “polarizing” regions like Tohoku and Shikoku remains stagnant.

A woman in her thirties who works for a Tokyo start-up and her husband will put their single-family home in Kamakura, Kanagawa, up for sale in the summer of 2021. With its spacious courtyard and 4LDK (four bedrooms, two living areas, and one kitchen) layout, this home is ideal for weekend getaways to the coast or the mountains. On weekdays, if you work from home, it won’t take you more than an hour to get to the heart of Tokyo.

The new crown epidemic, changes in employment practices, and other factors have all contributed to a surge in home buying activity. She considered selling residential buildings in Tokyo, but ultimately decided that Kamakura, with its harmonious blend of urban and rural elements, better suited her preferences.

For the first time in 31 years, Japan’s average residential land price is on the rise, and the suburbs of cities with favorable locations have become the growth engines. Kamakura City (up 1.3%), Chigasaki City (up 2.5%), and the Shonan region (up significantly) all lie within Kanagawa Prefecture. Kawaguchi City (up 2.4%), in Saitama Prefecture, is a popular choice because of its proximity to Tokyo.

Growth is accelerating in and around central cities as redevelopment efforts progress. Near Sapporo, in Hokkaido, are some of the best places to buy residential land in the country. Kitahiroshima and Ebetsu are two of the top ten. And in Fukuoka Prefecture, the surrounding cities have benefited from the Hakata Station redevelopment project. The price of residential land in Saga Prefecture went up by 0.1%, marking the first annual increase since 1997.

Dadong Xiongren, an analyst with real estate services company JLL, remarked that “the options for buying homes have expanded to relatively inexpensive areas around the city center and in good suburban areas,” both of which have seen increased demand. Large, single-family homes with several bedrooms are a common housing choice.

New housing starts in Japan fell by 5.4% year-over-year in July 2022, but the number of detached single-family homes sold rose by 1.8%, marking 15 months of growth. According to Nakai Kaho, president of Sekisui House, “single-family house sales remain strong.” It is expected by Iida Group Holdings that sales of single-family homes will rise by 10% in fiscal 2022 (ending March 2023) compared to the previous year. There has been a lot of development in Hachioji City and West Tokyo City in the Tama area of Tokyo, and there is a large market segment of dual-income families buying homes for 30–40 million yen (approximately RMB 1.47 to 1.96 million).

Land prices for residential land have fallen severely in many prefectures across the Tohoku, Hokuriku, Shikoku, and Chugoku regions of Japan. According to LIFULL HOME’s chief analyst Toshiro Nakayama, “while watching the trend of the epidemic, the popularity of residential land will become increasingly polarized.”

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