Lifestyle and Demographics

Articles published in Akiya Lab | Roopt (Makigumi)

Makigumi, which operates Roopt, regularly researches case studies and other information regarding the revitalization of vacant homes 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, with the ongoing population decline, the demand and yield for new properties are no longer as promising as before. The rapid decrease in younger generations and the increase in living arrangements other than nuclear families 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 older properties and those that cannot be rebuilt.

The trend of accepting "living in a used property for 20 years" with the same sense of security as a new build indicates 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 if the buyer is a company employee.

Differences in Valuation Between Buying and Renting

The valuation of a property differs between buying and renting. When considering purchasing an older property versus renting one, the general view is that renting can offer greater value. This is because the utility value of a property in the rental market is evaluated more flexibly than in the purchase market.

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

Summary

Demographic changes and diversifying lifestyles are major factors altering real estate valuation standards. It is necessary to move beyond fixed ideas about new constructions and adopt a perspective that finds value in older properties and those that cannot be rebuilt. A neutral evaluation based on actual utility value, regardless of whether the property is bought or rented, will become the new standard in the future real estate market.

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