The disaster-hit Tohoku region is experiencing a severe shortage in rental accommodation and local real estate companies are hurting.
“Despite inquiries increasing day by day, we have no properties on our books. We have clients in our office but no properties to show them. Our revenues are plummeting.” – President of a property management company in Sendai City.
The months of February and March are typically the busiest and provide the largest revenues for the company, however they currently have no vacant studio apartments and accommodation is severely limited.
Prior to the Tohoku disaster the average occupancy rate in Sendai City was around 80%. At Yamaichi Jisho, another management company in Sendai with over 8700 apartments under management, their occupancy rates have risen from an average of 93-94% to 98.5%. They are also suffering from a severe shortage in available properties.
“We no longer have family-type properties, and cannot even find accommodation for corporate tenants” – President of Yamaichi Jisho.
The properties that were damaged or destroyed by the Tohoku disaster have mostly been demolished, but rebuilding has been very slow. Many of the landlords own several properties over the city, so they are in less of a hurry to rebuild one that was demolished. Some agents have reported having a waiting-list with several hundred clients all looking for accommodation. A staff member from charity group, Caritas Japan, moved from Nagasaki to Iwate Prefecture last November and has been staying in a hotel before finally finding an apartment in March.
The Arahama area in Wakabayashi-ku suffered the most damage in Sendai. While the rubble is being removed, new construction is yet to begin.
Construction companies are struggling too. The shortage in workers in the disaster areas is causing a sudden jump in labor costs, and construction costs have also increased. Pressure on contractors to build under a certain price has meant that many construction projects are not progressing.
One general contractor in Kesennuma City has built 9 apartment blocks since the disaster. They construct the apartments using prefabricated units that are constructed in a factory and assembled on site. Their method requires less labor so they are able to build during a labor shortage. However, the 9 buildings only contain 39 units which is hardly enough to meet demand.
Miyagi Prefecture were planning to provide rental accommodation for displaced residents, but there were several cases where the Prefecture has yet to pay the rent. The challenge for the prefecture will be to create an environment where it is easy to construct private rental properties to meet the overwhelming demand.
Iwate Nippo, March 21, 2012.
Zenkoku Chintai Jutaku Shimbun, March 21, 2012.