Japan Moving to Ban Condo Resale before Delivery

Tokyo, Nov. 26 (Jiji Press)–Japan’s real estate industry has begun to ban the resale of condominiums before the completion of property handover, in a move to check soaring unit prices. The Real Estate Companies Association of Japan announced Tuesday that it has urged member companies to implement the ban and set quantitative purchasing limits. The average unit price of new condominiums in central Tokyo now far exceeds 100 million yen. Some claim that prices have been driven up by the short-term resale by investors, including foreign nationals. The association has called for the inclusion of resale prohibition clauses in sales contracts and important matter descriptions. The member realtors were also asked to thoroughly confirm the purpose of each purchase and whether the contract and registration of a purchased condo were made under the applicant’s name. Subject to the requests are properties offered to the public. Each company will decide whether to adopt the measures. Eight major companies, including Mitsubishi Estate Co., Mitsui Fudosan Residential Co. and Sumitomo Realty & Development Co., have already decided to take steps to prevent condo flipping. Mitsui Fudosan, for instance, has prohibited the resale before handover of Central Garden Tsukishima The Tower units, put on sale earlier this month in Tokyo’s Chuo Ward. If problematic resale activities are detected, the deposit, which is generally about 10 pct of the price, will be confiscated, and the sales contract will be canceled in principle. Soaring condo prices have made it increasingly difficult for middle-income earners to secure housing in urban areas. In July, the capital’s Chiyoda Ward asked the association to ban the resale for five years after delivery. In response, however, the association said that there are limits to what realtors can do. Mariko Miyamoto, a senior researcher at Sompo Institute Plus Inc. well-versed in the real estate market, pointed out that the industry’s countermeasures “can only be temporary remedies because they are limited to specific properties.” “It’s necessary for the central government to implement a public-interest policy to tackle the housing problem,” she noted. END [Copyright The Jiji Press, Ltd.]