A year ago we looked at a 20-year-old apartment after it had just gone on sale in the city where we live, which is about an hour from Tokyo. It was large and sunny, but the walls needed to be re-papered and the floors replaced. The realtor told us that the ¥11.6 million asking price included the cost of remodeling, which would be carried out by a company already chosen by the owner, once a sales contract was signed. We said we preferred having the remodeling done to our own specifications and asked how much cheaper the apartment would be if we bought it in its present state. She checked with the owner and called us back: He’d knock off ¥600,000.
Based on what we knew, repapering and replacing floors in an apartment that size would have cost more than the deduction, so we assume the job the seller envisioned would have involved little more than hanging kurosu (cheap wallpaper) and laying down low-grade veneer “flooring.” It would not include new bathroom or kitchen fixtures. Sellers are encouraged by realtors to make their properties more desirable by fixing them up before putting them on the market, and in most cases the work is minimal. To people like us, who have a more idiosyncratic idea of what we want in a living space, this generic remodeling work is wasteful and discouraging, especially if the price has been jacked up to absorb the difference.
In 2010, the construction ministry conducted a survey of people who had recently sold homes. Of those who had carried out home improvements for that very purpose, 73 percent said they received more money than they would have had they not carried out the work. The average “added value” these improvements provided was ¥1.66 million, though the average amount of money spent on said improvements was ¥3.13 million. So, in theory, these homeowners lost money, since they paid more for the improvements than they received in added value.
A better question might have been: Did they think the improvements made any difference in terms of actually selling the property? Though appearance is a vital sales point, location, layout and price are probably more important considerations in today’s over-stuffed used-housing market. We’ve visited dozens of cosmetically improved properties in the last year, and many remain unsold, the main reason being location. The remodeling, regardless of the quality, meant nothing.
The “reform boom,” as it’s known here, isn’t a “boom” in the sense of something that happens spontaneously through word-of-mouth. It was born of necessity. Middle-class home ownership is still a relatively new concept in Japan, as is the idea that one has to constantly keep a property in good condition in order to preserve its value.
Since many of the homes built in the 1970s and ’80s, when home ownership took off, were not well-made to begin with, some owners later found it economically prudent to buy a new home rather than fix up the old one. But they still needed to sell the old one, a process that has become increasingly difficult since so many others have had the same idea and the Japanese housing market is geared toward new homes. Such homeowners carry out minimal home improvements to make selling easier.
Home improvement for the sake of creating personally desirable living spaces was popularized by the hit TV Asahi variety show “Before/After,” in which superannuated, usually cramped properties were magically transformed into marvels of modern design. The people undertaking these renovations plan to continue living in the residences, so they are willing to pay more — though the estimates quoted on the show are artificially low since the designers waive their fees in exchange for publicity.
The main problem with remodeling, whether for sale or for oneself, is lack of regulatory supervision. Anyone can start a reform company. In the past, the biggest complaint with regard to remodeling was fraud: fly-by-night operations that over-billed elderly people for poor work. Now, the complaints are more general owing to skyrocketing demand by homeowners who have decided it’s cheaper to renovate their present house than it is to buy a new one, even if that often isn’t the case.
In 2011, the Center for Housing Renovation and Dispute Settlement Support in Tokyo addressed more than 4,500 claims. In most cases there were no contracts, design plans or even written estimates. If a particular job costs less than ¥5 million, according to the law the company that carries it out doesn’t have to be registered as a construction entity, though such remodeling companies are supposed to be insured for shoddy work.
Also, the work doesn’t need to be inspected by authorities unless “it affects the integrity of the structure.” But, according to a recent article in Tokyo Shimbun, much reform work does affect the structure, even if it wasn’t intended to. The article describes a Nagoya woman whose condo became virtually unlivable after a reform company replaced her floors and windows. Because there was no contract, she couldn’t sue.
The National Consumer Affairs Center of Japan handled more than 13,000 reform-related complaints in 2011, twice as many as it did in 2010. Because there are no regulations, the center urges homeowners who are going ahead with remodeling to record all conversations. The Japan Bar Association in April 2011 urged the construction ministry to pass new laws to cover the industry, no matter how small the company.
Architects recommend hiring designers who understand the engineering aspects of a remodeling project and can subcontract the various jobs to tradesmen. Such projects can run into the tens of millions of yen, so discount comprehensive remodeling companies have sprung up, offering total renovations for much less. Many are associated with major retail home-improvement centers, and are thus deemed to be reliable. They cut costs by buying materials in bulk, which usually means limited choices for the consumer. As with anything, you get what you pay for.
Philip Brasor and Masako Tsubuku blog about Japanese housing at www.catforehead.wordpress.com.
Makeover menu for homes in Japan
Here is what discount home-improvement centers usually offer in terms of remodeling services. Prices include labor.
Floors: Wood-veneer “flooring” is the standard in Japan, and quality varies greatly. Cheaper types buckle and warp over time, and most lose their luster quickly. The starting price for re-flooring a “living-dining area” is about ¥250,000. Real wood floors have become more popular, which means the price is coming down, but on average it will cost three to four times as much as veneer flooring. Many condominium associations mandate the use of sound-proof flooring types.
Walls: White kuroso wallpaper starts at about ¥60,000 for a normal six-mat size room.
Roof: This is usually the most expensive reform to a home that many people forget about. Prices for replacing and repairing roofs start at ¥1.5 million.
Kitchen: System kitchens, which include cabinets, sink, gas or electric range, and hood (but no oven) cost between ¥500,000 and ¥1.2 million.
Bathroom: Unit baths are a little more expensive, ranging from ¥700,000 to ¥1.4 million.
Water heaters: ¥150,000-¥200,000
All-in-one bathroom sink-vanities: ¥30,000-¥170,000