Japan has entered a new era – Reiwa. Below are some of the major events that happened in the real estate industry.
Civil Law Amendment in Real Estate
The civil law amendment in April this year is getting the spot light in the real estate industry. One of of the major changes that will take place is the regulation regarding lease guarantor.
・An upper guarantee amount must be set for a personal lease guarantor
・In case the lessee or guarantor passed away during the lease period, the principal amount will stop during the time of death.
…the above changes are placing landlords at disadvantage and making it more difficult for lessee to secure a guarantor. The amendment of civil law might lead to an increase usage of guarantee service.
Besides the above amendments, lessee will have the right to request for a rent reduction if there is any malfunction of equipment and flaw in the rental property. As in purchase and sale agreement, the buyer can ①request to cancel the agreement; ②request for a compensation; ③request for repairmen or replacement; and ④price reduction if there is any flaws in the property.
Tax Increase and Cashless Transactions
With the introduction of digital money, less people carry cash in their wallet. Service such as QR payment and barcode payment offer discount such as cashback in response to the increase of sales tax since October 2019.
In 2015, only 18.4% of transactions was cashless, but it is predicted to climb up to 50.8% by 2025.
In lease agreement, the demand for credit card payment is getting higher. Such payment method is no common in real estate industry due to the burden of transaction fee. However, to meet customers’ needs, it is expected that credit card payment and digital money transaction will be introduced soon.
Subscription in Real Estate
Subscription in various service has become more popular in recent years.
With a fixed amount of payment, consumers are able to enjoy unlimited use of certain service. For example, unlimited access to movies and music; unlimited rides of subway; unlimited times of car rental, etc.
In real estate, unlimited moving was introduced last year. This new style of renting has made an impact on the industry. Besides that, there is also unlimited use of rental furniture and household appliance, unlimited use of external storage rooms, etc.
Internet and the Development of IoT
It is expected that IoT will be taking part in real estate in the coming years with the development of home technology. To enable the use of IoT, internet access is necessary. The installation of free WiFi in rental properties will allow the further development of IoT products.
Nowadays, people get access to household appliance with smartphones. Some functions include unlocking and connecting to the security system. It is expected that more products and service like these will be introduced.
The real estate industry is expecting a major shift in 2020. Let’s keep close attention and prepare for the change!
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