2024 has come to an end and 2025 started. Congratulations on the new year, everyone. 2024 began with the Nikkei Stock Average of 33,193.05 yen. It exceeded the highest price of 38,915 yen 87 yen in February, and continued to maintain a high price range with the 42,000 yen range in July. The depreciation of the yen has been established at around 157 yen per dollar. Regarding interest rates, which have a major impact on real estate transactions, a “world with interest rates” has finally arrived due to a series of monetary policy changes by the Bank of Japan, but real estate prices continue to rise mainly in metropolitan areas. According to the Japan Real Estate Research Institute's real estate investor survey, investors who say “the rise in long-term interest rates and the impact of the real estate investment market are not seen” account for 64%, and it can be said that investors' expectations for real estate have further increased. What is the root of investors' expectations for real estate? If you break it down, you will find many reasons, such as the stability, growth potential, and institutional robustness of Japanese real estate. If you are an overseas investor, you will consider the depreciation of the yen ,low interest rates compared to overseas. On the other hand, if you look at individual properties, you can also see the harsh conditions.
It is said that investment property in Japan is about 270 trillion yen, but most of them are buildings that had constructed from the latter half of the 1980s to 2000s, which is called the bubble period, and most of these properties are properties that are not eligible for investment targets for financial commercialization of real estate, and even properties that cannot handle environmental performance evaluations such as CASBEE, etc., and energy saving performance evaluations required due to building standards law revisions. Current real estate prices have been maintained due to limited property transactions where institutional investors and overseas investors show motivation, but the reality is that old properties that occupy most of the buliding stock are difficult to repair or refurbish, rents cannot be maintained, and profitability is gradually declining. Originally, real estate prices are supposed to rise as the profitability of real estate increases. Real estate prices have risen over the past few years as investors' expected returns have declined. Expected yields will one day reverse due to rising interest rates, so it is necessary to increase the profitability of real estate through continuous efforts until then. The source of profitability is raising rents and reducing costs. The increase in rents is an increase in the quality of real estate and an increase in tenant satisfaction, and cost reduction is efficient operation through DX, which is truly an area of property management. I think 2025 will be the beginning of an era where field ability in property management will be seriously needed.
株式会社不動産経営ジャーナル「週刊不動産経営」より転載（許諾済）
