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Buying a brand new home: cookie cutter or order made?

by Philip Brasor and Masako Tsubuku

We went for the six-pack of beer, which the manufactured-housing company was giving away to the first 10 people who came to inspect its new model homes. Competition is fierce among Japan’s many manufactured home builders, and the one we were visiting is No. 10 in terms of units sold per year, though given the amount of promotion and advertising they do — SMAP heartthrob Takuya Kimura is their mascot — it would be easy to believe they were closer to the top.

The point of prefabricated homes is that quality is controlled and costs minimized, since they are mass-produced. One doesn’t demand individuality in a manufactured home, though most companies offer such a wide selection of designs it’s assumed there’s something there for every taste, not to mention every budget. As for the latter, ours was ridiculously low, but when the salesman heard it he didn’t bat an eyelid. We wanted to find out just how economical such homes could be — but the main reason our stated budget was low was because it is. Though the prices are considered reasonable in relation to other companies, we’re not sure we could even afford the company’s lowest-end house at a base price of ¥13 million.

An advantage ready-made homes have over order-made homes is that potential buyers can step into and look at one before they sign a contract. The two models we visited along a retail-heavy stretch of highway in northern Chiba Prefecture were in the mid-price range, between ¥20 million and ¥30 million. The less-expensive model was conventional in style. The first floor contained a living-dining-kitchen area, a small family room, a bath/utility space and a somewhat ostentatious washitsu (Japanese room) with tatami mats. The second floor had three bedrooms and a second toilet.

The other model was slightly more daring: a small light court on the second floor as well as an optional roof garden, and an open kitchen setup featuring an island counter. Whereas the previous model was done up in pastels and beige, this one was all fashionable monochrome — white shading to gray — right down to the off-white wood-laminate flooring.

We asked about modifications, and the salesman reeled off a list of options, which included appliances and fixtures, and pointed to a display of variations for flooring, wall coverings and molding. But in principle, the hyōjun (standard) features of the house could not be changed, since that would defeat the whole purpose of mass production.

Both houses seemed quite comfortable, but they were too big for us. We were interested in a one-story model, and there were none in the company’s catalogue. We were told that one-story houses are impractical for the kind of families who buy houses in Japan since they require more land area, and the lots in most Japanese subdivisions are uniformly small, so two-story houses with smaller footprints are the norm. Housing developments tend to be cramped because of Japan’s paucity of level land and laws that make it difficult to change property designated for agriculture into property designated for residences.

After explaining his company’s impressive technology for preventing subsidence, the salesman asked us if we had property to build on. We didn’t — but there happened to be a real estate agent in the office. He had a thick binder filled with land diagrams, most of which described vacant lots in already prepared developments. If we wanted something more isolated, meaning a less cramped neighborhood, there were plots in undeveloped locations. For those, we would have to dig our own well, install our own cesspool and use liquid propane gas instead of “city gas.”

At this point, the added costs had already risen well above our stated budget, and the salesman finally broached the inevitable matter of securing a housing loan, a process he made out to be as simple as walking across the street. But by this point, we understood that the advertised prices for manufactured homes were meaningless and that any road leading to contract-signing would be a long and winding one.

Several weeks later, we traveled to Onjuku, a town on the eastern coast of Chiba that’s popular with surfers, to inspect an order-made dwelling. The owners are a couple from Tokyo who liked the area and bought a piece of land within walking distance of the beach. Rather than go with a manufactured house, they hired a small design firm called Bakoko to make a weekend house to their specifications. They bought the land from a local carpenter, and one of the conditions of sale was that they use the carpenter’s company to build it.

Even in its half-finished state, it was obvious the house will stand out, it’s long and rectangular form contrasts with the other houses in the neighborhood, which are square and boxy. The side of the structure that faced the ocean was made up almost entirely of sliding glass doors. Outside, a wide deck spanned the length of the structure. Inside was a main living-dining-kitchen area and a separate bedroom, with stairs leading up to a kind of mezzanine utility space. There was a fairly large bath in the back, and an outdoor shower for postsurfing rinse-offs.

Alastair Townsend and Kayoko Otsuki, who run Bakoko, were there with the client and the builder, going over some changes the builder didn’t seem too thrilled about. With a custom-made home, the client can make alterations during construction, which meant that Bakoko had to negotiate these changes with the carpenter. The client told us that the price he originally envisioned had increased since construction started, though he insisted he was happy with the results so far. It was obviously a project that was more or less in flux, and at one point he and the architects went around the house discussing shelves.

Townsend was not at liberty to disclose what the beach house was going to cost, but he said he believes it is “competitive” with most prefabricated houses of similar size. In terms of every other consideration, he believed it didn’t compare at all.

“Of course, architects charge a fee,” he says, “but we offer far greater flexibility in terms of choosing and specifying materials, finishes, equipment, in addition to the overall design of the home.” Prefabricated-housing companies are “locked into” contracts with other manufacturers who provide fixtures and materials. “We were able to assist the client in purchasing many items from alternative sources and delivering them directly to the building site.”

He pointed to the doors, which were custom made by a local craftsman and “not as costly as you might expect.” And while the client in this instance was obliged to use the builder who sold him the land, Townsend says that an architect “can broker the best deal (for a builder) through a competitive tender process.” It’s one of the advantages of building in Japan, he explained, “which is full of excellent independent builders and subcontractors.”

The difference in materials was obvious. The beach house’s surfaces are almost entirely wooden. Manufactured homes tend to have laminate floors and plasterboard walls covered with kurosu (wallpaper), not to mention compound saiden (siding) for exteriors. Townsend said he ordered the wood for the interior from Germany through a Japanese importer, and that it was cheaper than Japanese wood panels.

The quality of manufactured housing has improved remarkably over the past decade or so, and as Townsend points out it’s difficult to “compete with economy of scale,” not to mention the ubiquity of product.

Banks tend to feel more comfortable lending money for a conventional house, the idea being that it’s easier to unload than a house that’s designed to one person’s tastes. (Though in the end that shouldn’t matter since Japanese mortgages are recourse loans, meaning the bank will get its principal and interest regardless.) Owing to the peculiarities of the Japanese housing market, a home immediately depreciates in value once you move into it. Townsend said that because people can’t expect a building to be an investment they should “keep in mind that (the house they buy) will likely be their home for a lifetime.” That is the real value of a place you design yourself.

Nevertheless, if cost is still the main reason why people choose manufactured housing, there’s another aspect they might want to think about. As we discovered while talking to the manufactured-housing company in northern Chiba, the price of a new house isn’t limited to the building and the land. It also involves administrative fees, insurance and interest on loans — all of which add considerably to the base estimate. So, it’s important to remember that a good portion of the price of the actual prefabricated house covers overhead, salaries, attendant advertising and promotions of the housing company. It paid for that six-pack of beer and those model homes — and Takuya Kimura doesn’t come cheap.

Philip Brasor and Masako Tsubuku blog about Japanese housing at www.catforehead.wordpress.com.

Useful terms get you on track for a new home

Joken-tsuki: Land with “conditions attached.”

Vacant lots in developed areas, and even some in undeveloped areas, often come with conditions. When we were looking for land through a housing company, many of the properties we saw required that the buyer use the same company to build a home on it.

In principle, if you purchase such a plot of land, but then decide to use another builder, you would have to pay a penalty. The legality of such a condition, however, is not clear.

Tsubo: A measure of area equivalent to 3.3 sq. meters.

Tsubo is the standard for indicating the size of land and dwellings in Japan. Normally, the builder will render the price of the structure in terms of yen per tsubo, which gives the buyer a better idea of overall cost, since it’s a means for comparing designs of different sizes, and the properties offered by different companies.

JIS: Japan Industrial Standards.

The JIS mark indicates that a product meets government quality and safety standards.

For fixtures, such as windows and doors, the JIS mark is important since inspectors, including those sent by banks and insurance companies, may not approve materials without it. This is no problem for manufactured homes, but may be a sticking point for order-made homes where supplies are imported.

Many believe that the JIS requirement is less about safety and quality than about protecting domestic manufacturers.