Condominium sales, which plummeted after the Great East Japan Earthquake, have started to recover in the Tokyo metropolitan area as new buildings are better equipped to withstand and function during natural disasters.
Condominium sales, which plummeted after the Great East Japan Earthquake, have started to recover in the Tokyo metropolitan area as new buildings are better equipped to withstand and function during natural disasters.
In September, sales in the Tokyo metropolitan area increased 17 percent from the same month last year, largely because developers started selling homes in buildings with greater quake-resistance capabilities.
From April, after the March 11 quake and tsunami destroyed large parts of the Tohoku region, to September this year, 19,765 condominiums were sold in the Tokyo area, down 8.9 percent from the corresponding period last year.
The decline was partly attributable to disruptions in construction work caused by the March 11 disaster. But other developers delayed sales of their condominiums for disaster-related renovations and sales pitches that could include the quake-resistance strength of the buildings.
According to the financial statements of five major developers, four--Mitsui Fudosan Co., Mitsubishi Estate Co., Sumitomo Realty and Development Co. and Tokyu Land Corp.--reported declining revenues and decreasing operating profits in the six-month period from April to September. They said condominium sales were hit particularly hard.
Only Nomura Real Estate Holdings Inc., the parent company of Nomura Real Estate Development Co., posted increases.
But the four companies have forecast a recovery in condominium sales in the second half of fiscal 2011 largely because of equipment to help their buildings withstand natural disasters.
Stunned by the scale of the March 11 disaster, consumers throughout the country are now putting importance on equipment at their homes for emergency situations.
"As for condominiums whose units will be put on sale from now, developers bought the land for many of those buildings when land prices dropped after the 2008 Lehman Shock," an executive of a developer said. "Since they purchased the land at lower prices, they will be able to sell the condominium units at cheaper prices."
In January, Mitsubishi Estate plans to put on sale 883 condominium units in a 49-story building in Tokyo's Harumi district. After the March 11 disaster, the company expanded the capacities of electric sources for emergency situations so that elevators can be operated 24 hours a day even during a blackout.
According to the website for the building, named the Parkhouse Harumi Towers Krono Residence, a system has been installed to make shakings smaller.
Each floor has a storage room for food, simple toilets and other equipment. In addition, the building has facilities that make it possible to hold soup-runs for a large number of people.
Mitsubishi Estate officials initially thought they would have a tough time selling the units because the building is located in a coastal area that could be hit by a tsunami. But the company has received more than 2,000 inquiries since it opened the website in September.
Nomura Real Estate Development put on sale 555 units in a building in Chiba's Mihama Ward after the March 11 disaster. The building, named Proud City Inage Kaigan, has storage rooms and wells for emergency situations.
About 300 of the 555 units were offered in several installments from May to August. They were all sold out within a day.
Real Estate Economic Institute Co., which surveys trends in condominium sales, said that after the Great East Japan Earthquake, homes with higher safety standards are meeting the needs of customers.
(This article was written by Keiko Nannichi and Eiji Zakoda.)