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Buyers of condos to be converted from Olympic village sue developers

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Surely, there is some provision in the purchase contract that spells out measures to be taken if handover is delayed, especially as these units were offered well before delivery date.

8 ( +11 / -3 )

Waste of money. Property in Japan doesn't hold its value.

1 ( +17 / -16 )

the condominiums hand over the properties by March 2023, as stipulated in their contracts, or pay them a total of 80 million yen in compensation

80 Millions? It's really small compared that to 12.7 Billions for total Olympic cost. None of that amount money use for payment people that can't move on time to that condo and need to rent property somewhere while waiting?

https://asia.nikkei.com/Spotlight/Tokyo-2020-Olympics/Tokyo-Olympics-cost-12.7bn-nearly-double-initial-estimate

2 ( +5 / -3 )

Just another depressing ugly grey block in Japan.

14 ( +21 / -7 )

Messy situation.

4 ( +6 / -2 )

Waste of money. Property in Japan doesn't hold its value.

Except when it does, right? With all due respect, have you bought and sold real estate in Tokyo? I bought a 10- year old condo and sold it 3 years later for a 5 million yen profit. Depends on where you buy. Best resale value now is in the Bakurocho area.

10 ( +15 / -5 )

Except when it does, right? With all due respect, have you bought and sold real estate in Tokyo? I bought a 10- year old condo and sold it 3 years later for a 5 million yen profit. Depends on where you buy. Best resale value now is in the Bakurocho area.

Good point. I've spoken to other building owners before and they have confirmed this too. But if you held it for less than five years, wasn't there a capital gains tax to be paid? At least that's what i heard.

8 ( +8 / -0 )

Waste of money. Property in Japan doesn't hold its value.

I understand your opinion however. Japan has great market potential especially in reforming a large home you can buy at a great price in the kansai or hokuriku areas, reform it, and sell it for a profit. My was bought at a price thats less than a car, reformed it which with a cost less than 500万、however I would never sell it.

6 ( +8 / -2 )

Except when it does, right? With all due respect, have you bought and sold real estate in Tokyo? I bought a 10- year old condo and sold it 3 years later for a 5 million yen profit. Depends on where you buy. Best resale value now is in the Bakurocho area.

Just because you made a profit doesn't mean it is a general trend nor does it mean the trend in the rest of the country is the same like in Tokyo and the environs.

2 ( +8 / -6 )

The delayed handover of the condominiums may be a blessing in disguise for the buyers. The government has just released damage estimates of a major earthquake hitting the Pacific coast. Their condos are built on reclaimed land just a few meters above sea level.

1 ( +4 / -3 )

80 Millions? It's really small compared that to 12.7 Billions for total Olympic cost.

The builders didn’t organize the Olympics, the government did.

And it’s only 29 buyers right now, imagine if everyone sued!!!

2 ( +3 / -1 )

"A delay would leave the purchasers liable for additional rent."

Now this is just ludicrous. On top of having to live somewhere else for a year or maybe more -- which means paying for THAT -- they have to pay rent on a place they cannot access? The companies should be sued just for the idea alone, and 10 times that for the reality. If they cannot get them at the promised time, due to Covid-19, then maybe it can't be helped. But they should be given compensation covering any costs they may incur in the wait in terms of rent, and DEFINITELY not charged rent for the condo spaces and land if they can't get it yet.

2 ( +8 / -6 )

Meant to add, because I guarantee if the shoe were on the other foot and the buyers couldn't move in for a year for personal reasons caused by Corona they would get no sympathy and the companies would be pointing to the contract and saying, "Look here! You hankoed right here on the margin of the two pages! You made a contract, and must honor it!"

6 ( +11 / -5 )

A check on Sumo shows a 2 LDK Condo priced around 50 million, pretty decent pricing considering the location.

Waste of money. Property in Japan doesn't hold its value.

Apparently you have never bought property in Japan. I could sell my condo today and make a decent profit!!!

-1 ( +2 / -3 )

smithinjapanToday  09:34 am JST

"A delay would leave the purchasers liable for additional rent."

Now this is just ludicrous. On top of having to live somewhere else for a year or maybe more -- which means paying for THAT -- they have to pay rent on a place they cannot access?

First line of the article: "A group of people who purchased condominiums....." What makes you think that they are paying rent on their purchases? Their complaint is about the costs they are incurring in renting their current accommodation whilst waiting to move into places they have purchased.

4 ( +5 / -1 )

Apparently you have never bought property in Japan. I could sell my condo today and make a decent profit!!!

Sorry, Tokyo and it's environs are not representative of the whole nation.

1 ( +3 / -2 )

Hi Harry_Gatto,

Depends on on what contractual form the property was purchased......

Freehold rights (Japanese: 所有権 / shoyuken) are the full ownership of the land and the structure(s) built on the land. In the case of apartment complexes and condominiums, each unit comes with the ownership of a portion of the land below the building.

*Leasehold rights* (Japanese: 借地権 / shakuchiken) allow the owner of a built structure (usually an apartment or condo, but in some cases a whole building) to rent the land on which the structure stands for a fixed term. So they own the building, but not the land on which it stands. The property is further subject to annual land rent.

The delay could incur additional liabilities. In this case ground or land rent.

The question is which party is responsible.

The plaintiffs deem otherwise and believe the developer is liable so have demanded compensation.

This could well open the floodgate to future claims.

3 ( +3 / -0 )

Many contracts will excuse performance for force majeure such as pandemics and war. I think this lawsuit may be futile.

7 ( +7 / -0 )

Hi itsonlyrocknroll.

Yes, fair point, I didn't think of that but I'm sure that the OP didn't either.

1 ( +1 / -0 )

Ah yes, Reckless, indeed dependent on the courts interpretation of liability. And possibly the timing pf the purchase.

I purchased land in Kochi, I build a bespoke property.

However every year the property deprecates in value.

Now, the property I purchased in Aichi, Nagoya has increased in value, not in proportion to property in London.

Its a sum not to be sniffed at.

1 ( +2 / -1 )

GoodToday  06:39 am JST

Waste of money. Property in Japan doesn't hold its value

Obviously you don't own or understand the real estate market in general, Japan is no different than and other country where in certain areas prices rise unreasonably then drop and stabilize.

drluciferToday  10:24 am JST

Apparently you have never bought property in Japan. I could sell my condo today and make a decent profit!!!

Sorry, Tokyo and it's environs are not representative of the whole nation

No different than any other country like Canada and the USA you cannot compare land value in New York, LA, Vancouver, Toronto to the rest of these countries.

Here we are looking at a situation where the buyers will probably have to start paying their mortgage and still pay rent in the location they are presently living.

Even if mortgage payments are delayed they will still need to negotiate an extension to their rental lease.

Are these good value?

Well I paid 20 year in rent, when I left I got zero (0) back now I own, if I last 20 years and then sell I will get something back, I may not get everything I put in back but I get something back. Something is better that nothing and I never have to worry the owner will decide not to renew my lease, oh and my mortgage payments are 30% less than a much smaller rental house or apartment.

2 ( +4 / -2 )

Harry_Gatto, yes agreed, I am sure the OP saw dollar/yen signs.

Property is a minefield of misery with all the small print.

That before you meet the neighbors.

How thin are those walls a newly married couple could be bouncing off?

Or one has to endure a potential DJ Hasebe, getting on down, throwing shapes on the balcony?

1 ( +1 / -0 )

@biculrural. Good on you.

Those properties profit are not common here, unless selling quickly a rather new property mostly in a popular area. Areas going under redevelopment can see an increase in value for older flats.

Investing in real estate is too risky in Japan and most of the time not profitable, ending in money loss. I would rather do it in my own country.

I live 70km from Tokyo and the most expensive houses or flats are still cheaper than the lowest ones in Tokyo. I do not understand why people do spend so much money for living in those concrete blocks. Everyone’s choice

5 ( +5 / -0 )

itsonlyrocknrollToday  11:02 am JST

You used London as a comparison with Aichi/Nagoya.

Well the property and house I bought here in Tokyo has increased in value more than a similar property in a similar area of London.

Not all of Tokyo like in every country and major cities some places become more in demand.

Located within 6 minutes either way to 4 different trains/Metro, new regulations now requiring a larger plot of land to build or rebuild, and increase in the percentage one and build on, etc.. all contributed to a very sharp increase in the values of our place, ( down side is if we sell we cannot find anything similar in value in this area so we would have to move to a less desirable area of Tokyo or into a neighbouring prefecture.)

1 ( +2 / -1 )

Sorry, Tokyo and it's environs are not representative of the whole nation.

The poster mentioned Japan and not Tokyo, and property prices differ based on the area worldwide, it’s not specific to Japan!

0 ( +1 / -1 )

When I look at the surrounding area and the lack of public transport infrastructure that is in place. I question why anyone would want to live in the former Olympic Village area.

1 ( +1 / -0 )

The poster mentioned Japan and not Tokyo, and property prices differ based on the area worldwide, it’s not specific to Japan!

Did u even bother to read what I wrote? Let me help u, prices in Tokyo and the environs are not representative of prices in the rest of Japan.

2 ( +2 / -0 )

I question why anyone would want to live in the former Olympic Village area.

That’s why

Harumi Flag is located 2.5 kilometers from the Ginza shopping district and 3.3 km from Tokyo Station.

-4 ( +0 / -4 )

Did u even bother to read what I wrote?

Apparently you didn’t, ROFL!!!

Let me help u, prices in Tokyo and the environs are not representative of prices in the rest of Japan.

That information might be Nobel prize material, better hold on to it!!!

-5 ( +0 / -5 )

Good.

Sounds like a lose lose for everyone involved.

-1 ( +0 / -1 )

smithinjapanToday 09:36 am JST

Meant to add, because I guarantee if the shoe were on the other foot and the buyers couldn't move in for a year for personal reasons caused by Corona they would get no sympathy and the companies would be pointing to the contract and saying, "Look here! You hankoed right here on the margin of the two pages! You made a contract, and must honor it!"

So true! Hope the plaintiffs get fully compensated.

0 ( +1 / -1 )

didouToday  11:17 am JST

Investing in real estate is too risky in Japan and most of the time not profitable, ending in money loss. I would rather do it in my own country.

First off, everybody needs to live somewhere. So either pay rent which leaves you with nothing or you pay off a mortgage that is usually less per month than the rent. If you sell it in 10-20 years, you end up with more money than if you just paid rent for 10-20 year period. If for example you buy for 50 million and sell for 45-55, you made money because you saved the rent for 10-20 years.

2 ( +3 / -1 )

Horrifically ugly

1 ( +3 / -2 )

Bought and sold twice at a profit and now could sell my present property for a profit. It is about SELLING the home, not getting rid of it ASAP -- as the Japanese market largely demands for when people move location with their company etc, etc -- many Japanese don't have the time to SELL, but only a short window to get rid off.

0 ( +2 / -2 )

Something else to consider when buying property as opposed to renting is the lost use of the money spent on down payments etc. If you sink 10 million yen into a down payment, for example, you could have invested it instead. At even 5% return rate, you are losing 500,000 yen a year in investment income. That adds up over time, plus your capital is tied up.

-3 ( +2 / -5 )

The delay of the Olympics was an unfortunate event for the developers, but that does not excuse them if they fail to keep their end of the deal. Whatever the reason, if there is a clause about compensation in the event of delayed handover, they must respect that, take the hit and maybe fire some marketing people.

0 ( +0 / -0 )

Rented my last place in Tokyo for 6 years and spent 100k USD to the landlord. Total waste with nothing to see for it. So purchased our house and have paid off 3 years mortgage now. Bought a 10 year old property that had already lost it new value so got it for a good deal and have now renovated to our tastes. Location is very central, 10 mins from Shibuya so our land will see a steady increase in value. It's a win, win situation. Renting is losing money every month guaranteed.

2 ( +2 / -0 )

Problem with Japan real estate market is Tokyo's hyperdensity of population versus accelerating decrease of population.

I don't wish any bad fortune but it is a fact Japan is prone to earthquakes and Tokyo area in particular.

I dont bet on a such major investment that could lose its value within seconds. Be warned foreigners as during those last several years ads for real estate investment have florished.

Wishing everyone profits and UK9393 sees it righ in my opinion in taking time.

PS : personally I invest indirectly in worldwide property share (no residential) and Tokyo is not an overall interesting place, being too legally risky.

0 ( +0 / -0 )

And please read other very informative article of JT about Earthquakes to come and ensuing casualties/damage. I had not read it before posting my comment so such warning applies more founded.

0 ( +0 / -0 )

Entirely too many neighbors in those kind of places. A friend lives in a similar one, has to wear headphones while watching their own TV. Can hear when the next door person takes a shower. No thanks at that price.

0 ( +2 / -2 )

If one has ever been in one of these apartments in Japan, the reason why the value rarely holds is because the workmanship is done so cheaply, even the so called luxury type places, often are 'kit' built with flooring, bathrooms, kitchens that are made to look used after a few years. It's a bit of dupe for buyers to want to buy an apt./mansion in Japan.

Often JR or the train companies understand the over population and Japanese mentality causes people to look at places to live and they will build owner oriented/non consumer value places of 'good' location which determines the pricing and the demand.

If the Japanese did not have the brainwashed idea that key money, every 2 year one month fee for renewal, etc., perhaps they would understand just how unfair the housing/rental market is, and the quality might go up, but this is corporate Japan and it's a lemming society, so they jump at chances for places of convenience like these Olympic cheap condos, where the Mitsui's etc. have control.

The realty market in Japan is insanely ridiculous, but it is what is is. Corporate thinking is part of the weakness of the Japanese and those who are complaining now are just reaping what they sow with their ignorance.

-1 ( +1 / -2 )

That's a July photo. The only colour in the photo comes from the flags of the different countries from the athletes. So it'll be even more grey and depressing. I'm surprised given the usual amazing zoning bylaws in Tokyo that this design could have been allowed to happen to begin with, resulting in mixed neighbourhoods. This won't be very walkable

1 ( +1 / -0 )

Hi Antiquesaving, hands up, I have little knowledge of real estate markets.

I would struggle to compare the property I brought in London with the housing market in Japan.

I brought the properties in Nagoya and similarly Brighton/London through business necessity to use as a bases.

All the best, clearly you have a thorough understanding of the market.

Would you have invested in one of these Olympic condominiums with capital to spare?

0 ( +1 / -1 )

Zichi, yeah definitely not a rate of return in Japan... I would hesitate to do any investing in this country to be honest. Best to keep your assets offshore where they may actually be able to see some decent returns. If you were in a well managed Nikkei 225 ETF the past few years have been OK, but I prefer to keep my dealings elsewhere.

-1 ( +0 / -1 )

Would you have invested in one of these Olympic condominiums with capital to spare?

Now this is a topical western first world thinking and usually a rich or top earners thinking.

Too many here think that a house is an investment to eventually make a profit, this may be so for a very very very very....... Small portion of the world population and mostly in certain western countries.

These people are more likely just buying a permanent place to live, a place they own, a place the landlord can't raise the rent, end the lease, etc....

The vast majority of the world population aspire to own their own home or condo and very few see it as an investment to make a profit.

They see it for what owning your home was intended, that is having a place to live that is yours.

0 ( +1 / -1 )

sunfunbunToday  05:09 pm JST

If one has ever been in one of these apartments in Japan, the reason why the value rarely holds is because the workmanship is done so cheaply, even the so called luxury type places, often are 'kit' built with flooring, bathrooms, kitchens that are made to look used after a few years. It's a bit of dupe for buyers to want to buy an apt./mansion in Japan.

You obviously have never bought an apartment in Japan. My current apartment bought 6 years ago(new) is just fine, everything works well.

I rented my last one for 7 years and didn’t have to get any repairs done in those years.

There might be some cheaply built apartments,but don’t generalize!!!

1 ( +1 / -0 )

Clock is ticking down to the big one in Tokyo - this kind of area is the last place I would want to live and take a mortgage out on property. Will look more like Atlantis when the earthquake and flood have taken their toll.

0 ( +0 / -0 )

Good move.

-1 ( +0 / -1 )

Antiquesaving, the photo is disconcerting.

A home, first residence?

What are the asking prices on these residences?

So many questions remain unanswered, the take up from offer price?

The area? size and amenities?

Harumi Flag is located 2.5 kilometers from the Ginza shopping district and 3.3 km from Tokyo Station. Its condos are popular, with 631 units put on sale in November attracting more than 5,500 applications.

Hum, wish I had a better knowledge of Tokyo.,

*
1 ( +1 / -0 )

Hi Zichi, I couldn't live in Tokyo. Those high rises seem soulless even if I had the investment capital.

Plus I need to be close to work. I struggle with the noise and bustle in Nagoya.

Kochi has wide open spaces in comparison.

Thank you for the information.

1 ( +1 / -0 )

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