Although the purchase of older, existing homes is becoming a more common choice amongst Japanese buyers, there still remain some concerns over the earthquake resistance and potential defects in an older home. In 2008, 10 of Japan’s major home builders introduced a certification system called ’Sumstock’ to help alleviate these concerns and provide buyers with some assurance of safety.
The 10 home builders are:
- Asahi Kasei Homes
- Daiwa House Industry
- Misawa Home
- Mitsui Home
- Sekisui Heim
- Sekisui House
- Sumitomo Forestry
- Toyota Home
- Yamada SXL Home
These home builders will provide a Sumstock certification on homes they have built that that meet the following:
- Properties with records kept of past repairs, renovations and maintenance
- Properties that have been maintained and inspected at regular, scheduled intervals
- Properties that have been built or retrofitted to meet current earthquake codes (post-1981)
It is typically said that the average house will depreciate in value to zero after 20 years, with the market price essentially being the land value. A house with Sumstock certification, however, would theoretically have only dropped in value by half after 20 years, with a slow decline after the 20 year mark. The idea behind the Sumstock certification is that routine maintenance, repairs and renovations based on a 50-year schedule should result in the house retaining more of its value as it ages. Whether a future buyer appreciates this or not, is a separate matter.
The Sumstock certification began in 2008. By January 2015, 3,134 second-hand houses with this certification had been sold. Annual sales have gone from 50 in 2008 to 1,600 in 2016. Almost a third of the homes sold were over 20 years old. The average age of a house sold with this certification was 16.7 years, while the average size was 128 sqm (1,380 sq.ft) and the average sale price for the building portion of the sale was 10,720,000 Yen (about 46% of the value of a brand new house).
How to buy one of these certified homes?
The seller of the house must obtain the certification from a qualified assessor affiliated with the original builder of the house and must sell the property through a real estate brokerage affiliated with the home builder (usually one of their group companies). The certification process includes a property valuation that considers both the value of the house based on the structure and interior finish, as well as the land value.
For buyers, options are extremely limited as the qualification process is quite strict. As of early 2018, there were 18 Sumstock listings in Tokyo’s 23 wards, representing 0.6% of the total houses for sale.
AllAbout, April 28, 2015.
RePort, February 21, 2017.