Lifestyle and Demographics

Articles published in Akiya Lab | Roopt (Makigumi)

Makigumi, which operates Roopt, constantly researches case studies and other information on the revitalization of vacant houses and publishes them as columns.

New Lifestyles and Changes in Real Estate Valuation

In modern society, traditional real estate values are undergoing significant changes due to demographic shifts and diversifying lifestyles. Especially in rural areas, as the population declines, the demand and returns for new properties are no longer as promising as before. The rapid decrease in the younger generation and the increase in non-nuclear family living arrangements are also major factors changing the criteria for real estate valuation.

Real Estate Valuation Adapting to Lifestyle Changes

As divorce becomes more common, and if couples cannot adapt to subsequent changes after starting a life together, the burden of loans is increasingly becoming an issue. Such societal changes are leading to a reevaluation of excessive reliance on new properties and a movement to find value in used and un-rebuildable properties.

The trend of accepting "living in a used property for 20 years" with the same sense of security as a new build indicates new real estate valuation standards based on new lifestyles. This approach aims to evaluate real estate on a more neutral basis, rather than judging it by whether it is new or whether the buyer is a company employee.

Differences in Valuation Between Buying and Renting

The valuation of a property differs between buying and renting. It is generally understood that when considering an older property, renting can offer greater value than purchasing. This is because the utility value of a property in the rental market is assessed more flexibly than in the purchase market.

While it has been common to arrange full loans for new properties or individuals with good credit, there is now a demand to correctly evaluate the actual utility value of properties, even those 10 or 50 years old. It is crucial to assess and appropriately value a property's utility regardless of its age. The cost of renovation should also be included in this assessment, as it is now an era where the true value of a property must be discerned.

Summary

Demographic changes and diversifying lifestyles are major factors altering real estate valuation standards. There is a need to move beyond fixed ideas about new constructions and to find value in used properties and those that cannot be rebuilt. A neutral evaluation based on actual utility value, regardless of whether the property is for sale or rent, will become the new standard in the future real estate market.

First published: Akiya Lab (2024 - now integrated into this site)