Real estate transaction prices on properties in North Japan’s tsunami affected coastline have seen recent increases since the March 11 earthquake. The buyers include residents who have lost their homes as well as property developers anticipating future redevelopment.
For land that escaped inundation, it is a seller’s market. There is, however, growing concern over the affect these price increases may have on displaced residents looking to rebuild in these towns.
With national reconstruction plans yet to be confirmed, real estate agents in affected areas are warning residents not to rush in to buy property.
In Ishinomaki, Miyagi Prefecture, the price of 1 sqm of land before the disaster was 45,400 Yen. Since the disaster, prices have jumped between to 60,000 ~ 75,000 Yen/sqm. This is an increase of 30 ~ 65% in three months. The same prefecture has also seen sudden price rises in second-hand condominiums. According to Tokyo Kantei, prices for second-hand apartments have risen 20% to 300,000 Yen/sqm since the disaster.
According to a land town planning association in Ishinomaki, a 10,000sqm residential subdivision with 60 blocks of land that had remained unsold for the past 6 years was completely sold out within a short time since the March 11 earthquake. Although the subdivision was in an inconvenient location far from the city center, the association was overrun with inquiries once their phone lines were restored in mid-March. The asking prices were left unchanged since prior to the earthquake. The buyers are displaced residents and home builders.
Other town planning projects have also sold out. Ishinomaki has always had a shortage of residential land, and there is now an increasing scramble for whatever land is left.
Not all areas are seeing increased demand. Shiogama and Tagajo Cities, which were both directly hit by the tsunami on March 11th, are seeing a huge outflow of residents to inland areas.
However, as the employment situation continues to worsen and since the urban population in Sendai City is not expected to increase, market experts believe the sudden price rises to be short-term only.
A broker from Natori in Miyagi Prefecture, says we are seeing a situation of temporary panic buying and in the long term we will see prices level off or decrease.
The Chunichi Shimbun, June 14, 2011.