An aging, large-scale rental housing complex in Sakai City, Osaka, has recently seen a surprisingly major recovery in occupancy. Built in 1971, Chayamadai Danchi was constructed during Japan’s high-growth era. It sported features such as private baths and flush toilets that made it highly desirable at the time, with apparently more than 50 applications for every available unit. In the modern day, though, these types of properties have largely aged out of popularity, and by 2016, around 20% of Chayamadai’s units were vacant.
From 2021 onward, however, occupancy bounced back to more than 90%. What’s behind this?
It’s no surprise to our readers that rents have been on the rise for a while. For family-sized apartments in Osaka City, average monthly rent reached approximately ¥170,000, the highest level in the Kansai region. Older housing complexes like Chayamadai have long carried a somewhat outdated image, but increased price pressure has made affordable suburban properties more attractive.
There are more interesting phenomena going on than just “prices are too high, so let’s find something cheaper,” though. Chayamadai also offers something called “nikoichi,” essentially combining two units into one. Basically, two separate apartments are rented together, then connected so residents can move between them through areas such as the entrance or balcony. For example, one of these properties came in at around 90 square meters and was priced at just ¥87,000 per month, well below what a similarly sized apartment would cost in central Osaka.
Lifestyle reasons have also contributed to the shift. Some have even gone as far as to sell their detached houses to live in Chayamadai, citing reasons such as the reputation of the local elementary school, the community environment, and opportunities for relationships between residents of different generations. In the, in my personal opinion, somewhat disconnected world of modern-day Japan, it’s nice to see interpersonal relationships be a real driving factor behind real estate for once. There are many newly built condominiums in Tokyo advertising with mottos such as, “Be part of a community!” But to be honest, it’s hard for me to believe that in Tokyo of all places.
Renovation freedom in older units was a factor too. Rentals in Japan generally require tenants to restore alterations when they move out. At Chayamadai, however, residents can customize eligible units according to their lifestyles without having to return the property to its previous condition when leaving. One tenant, for example, was renting a 45-square-meter unit for ¥41,900 a month and opted to replace the tatami flooring with wood flooring. The complex even has a free DIY workshop available to residents and non-residents alike, with tools and support for people working on their own projects.
And while younger people are becoming more interested in the complex, Chayamadai has also had to account for the needs of its longtime elderly residents. By adding everyday services, they’ve made the complex both more appealing and more usable for tenants of different ages. For example, a prepared-food shop was opened in part to help address elderly residents eating alone and having difficulty with everyday shopping. The complex has also introduced an electric cart service to help residents navigate its many slopes, while social-welfare staff are available through a twice-monthly outreach café.
For buyers, I think the real takeaway here is not necessarily that everyone should suddenly start looking for a 50-year-old housing complex. Rather, it’s a good reminder that “old” and “undesirable” are not always the same thing. Japan’s real estate market puts a heavy premium on newer construction, which can sometimes leave genuinely interesting value sitting in older properties, particularly if the location, size, management, and surrounding community are right.
Of course, buyers need to look carefully at things like earthquake standards, the condition of the building, major repair history, management, and repair reserves before jumping at a low price. But Chayamadai is a particularly interesting example of how much life can still be left in older Japanese housing when people are willing to rethink what makes a property desirable in the first place.
Source: https://news.yahoo.co.jp/articles/cadeb7c94453e322f558f95e5e494f90c55a798d?page=1