Considering the post-Pandemic recess it may be hard to imagine, but the latest trend on Japanese real estate market shows that more and more luxury apartment houses, or "okushon", are being constructed in the provincial regions, attracting both investors and tenants.
"Okushon" can be literally translated as an apartment worth 100 million yen ($735,000) or more. In other words, it means a top class luxury property. Traditionally, apartment buildings storing such properties were associated with major cities like Tokyo, Osaka and Nagoya. Still, with the latest trend spreading accross Japan, okushon buildings appear all over the country, especially around bullet train lines main hubs.
Major factors to heat up the luxury condo sales are land value rising and surging construction costs. Another reason is that many wealthy provincial homeowners of an advancing age prefer to sell their properties in rural areas and move to the city with a better accessibility to all of the necessities. As a result, more and more investors, both Japanese and foreign, are being attracted to the luxury apartment segment of the real estate market. Judging from the 2022 year real estate sales data for Tokyo, Osaka and Nagoya almost 3,000 luxury apartments were purchased, which shows a 250% rise since year 2012.
One of the biggest news concerning this trend is the Fukui Tower Sky Residence okushon construction. The 28 floor building with 118 apartment units is the first okushon in the Fukui Prefecture (closest neighbour to Nagoya and Kanazawa). Since the sales started in October 2022 the 90% of the properties priced over 100 million yen have already found their new owners. The bullet train line extension to Fukui prefecture will start operation by Spring 2024, adding more value to the luxurious condo building located close by the JR Fukui station. The Kagawa prefecture capital city of Takamatsu, located on the Shikoku island, has 5 luxury apartment buildings constructed and almost completely sold out in the past couple of years. Many of the buyers were the locals, but there is still some space for the foreign investors willing to try their luck at this promising real estate market field.
Of course, Central Japan is not the only region undergoing an okushon boom. Japan's northest island of Hokkaido has an ambitious okushon construction project completed, too. Premist Asahikawa The Tower with 13 top class luxury apartment units has 90% of the properties sold since the sales start in December 2022. Interesting, that Asahikawa okushon has one of he highest foreign buyer rates from all of the above mentioned apartment buildings.
Would you consider investing into a trendy okushon property, too?
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