By Etsuko Morishita
In Japan, where the Bank of Japan’s monetary easing policy has been in place, real estate prices in the Tokyo Metropolitan Area have been rising since Tokyo’s hosting of the 2020 Olympic Games was announced. This is likely due to expectations of its positive economic effects. In November 2015, the average sales price of upscale condominiums topped 60 million yen, a high in 1991 during the bubble economy.
One of the contributing factors for this was the surge in foreign investment in recent years. Real estate in Tokyo has been popular, especially among wealthy investors in Chinese communities. The average real estate price per square meter in Beijing nearly tripled in the eight years leading up to 2008, due to the effect of the Beijing Olympics.
Of the 125 major cities in the world, Tokyo has been ranked fourth after New York, London and Paris in the Global City Index since the survey started in 2008. In terms of international business cities however, Japan lags behind Singapore, Hong Kong and other regions in terms of its business environment. In order for Tokyo to become a competitive international city, its immediate tasks are in areas such as tourism and international business, enhanced logistics, communications infrastructure and means of transportation to access city areas. The number of inbound foreign tourists surged after the Great East Japan Earthquake, rising to 19.73 million in 2015 from around 8 million in 2012. Shortages in accommodation facilities were a serious issue. Residences and land assets owned by households exceed 1,000 trillion yen with 50% owned by the elderly, aged 60 or over. As the population ages, their relocation to nursing-care facilities and smaller houses accelerated, therefore giving rise to a number of abandoned houses. Only a portion of business operators were able to work on the renewal of these abandoned homes and shops, therefore limiting its upkeep.
Since the holding of the Tokyo Olympics was decided, the Otemachi area, which is located in the center of Tokyo, has been rapidly changing. It is being transformed with shopping centers, entertainment facilities, and hotels and housing being built up, whilst still serving its original role as the center for business. In addition, comprehensive city redevelopment is being conducted in Shibuya on an unprecedented scale. In association with the renewal of the area around the station, large-scale city regeneration is underway by further developing the infrastructure of transportation networks. By installing underground rainwater tanks in preparation for emergencies and disasters, the city aims to be prepared for torrential rainfalls that have happened in recent years. In addition, Shibuya, which has been at the forefront of Japanese culture, is further enhanced as a trendsetting city that gives birth to next-generation industries and as a base for transmitting Japanese culture to the world. Redevelopment is also underway in other parts of the metropolitan area. P’s Corporation, in which I serve as the president, specializes in real estate renovations in the city center to provide properties that satisfy customers with enhanced value by accurately capturing the diversification and sophistication trends of the times.