The time has come when only unique condominiums can survive. Amongst Japanese people, it is common for people to own their own houses, but recently the number of citizens who don’t mind renting is increasing, especially amongst young people.
But there are conditions. It would be difficult to attract tenants with an old-fashioned wooden apartment, as renters favour stylish condominiums.
To make real estate investments successful, investors need to offer unique properties that are popular amongst young people.
Three out of four Japanese people are homeowners.
Until a decade ago, the typical Japanese person lived in a rented apartment when they were young, before living in a Sōroku House and eventually buying a house with land when they got married and their income increased. Most Japanese people had ambitions to own a house, a basic trend which remains unchanged.
According to the Ministry of Land, Infrastructure, Transport and Tourism’s Public Opinion Survey on Land Issues in FY 2017, 75.7% of the respondents answered that they wanted to own both land and buildings. Only 4.1% of respondents said they didn’t mind if the land was leased as long as they own the building, and 16.3% said that owning versus renting didn’t matter to them.
At a glance, 75.7% seems to be high, but in 1996, the percentage of people who said they hoped for home-ownership was 88.1%. The tendency for people to wish to own a house is decreasing overall.
The number of young people and people living in rental houses is increasing.
And the younger the generation, the stronger the trend. The percentage of people who say that buying property isn’t important to them increases to 34.4%.
If we look at the current living situation of respondents, 42.3% of current renters want to own property some day. Meanwhile, the percentage of people who aren’t bothered about home-ownership is nearly half, 49.6%. Many young people and people living in rental housing are happy to live in rental housing, so it is expected that the demand for rental housing will increase.
Rental housing and exterior design
Even if the demand for rental housing is increasing, not all rental housing is equally desirable. In order to secure tenants and make a profit on your real estate investment, it must be a property that people with a stable income who want rental housing want to live in.
But what kind of rental houses are popular? According to the 2017 Residential Market Trend Survey by the Ministry of Land, Infrastructure, Transport and Tourism, people’s number one reason for choosing a house when moving into rental properties was price, with 50.3%. In second place was the location and environment of the house, with 42.8%, and in third place, the design, size and facilities of the house, with 32.9%.
Small and stylish condominiums
As for condominiums, the demand for relatively small and stylish ones is increasing. As more and more people rent for life, the number of high-priced, well-designed condominiums is on the up.
As a result, superior exterior designs are required. Rather, it should attract people who want to buy condominiums but would rather live freely, unrestricted by a mortgage. Compared with condominiums, those selecting rental houses as investments should consider the exterior design before investing.