Suburban Tokyo housing

A continuing trend in Japanese real estate follows the demographic movement of mass migration to several hub cities, led by the nation's capital, Tokyo. In addition, the recent economic boom led to a rush of residential tower developments in central Tokyo. Individual ward offices competed for larger residential populations, and thus greater political power, by approving floor-area-ratio bonuses and allowing for higher developments, which in effect led to more residential area coming onto the market. Notwithstanding the economic bust of the past 2 years, these developments have largely been successful, and have led to greater density in central Tokyo. Salarymen are happy to have shorter commutes; empty-nesters can enjoy the conveniences of downtown Tokyo, students and young employees can stay out later at night enjoying abundant social life (or working...).

However, this trend is not without its losers. The Nikkei reported last week on stress in residential properties in suburban Tokyo. Suburban Tokyo is defined as being 40 or more kilometers from the Tokyo city center, encompassing parts of Saitama, Kanagawa, Chiba and Ibaraki prefectures. Accordingly, the Nikkei reported that 49% of vacant suburban residential properties have been vacant for over one year. The top reason for vacancy, capturing 57% of responses, was due to previous tenant's vacancy. Demand seems to be dwindling quickly for suburban residences. The article also notes a similar trend in the Osaka metropolitan area.

What does this mean for suburban communities and services such as shopping centers, restaurants, and even post offices? Will there be a further separation between winners and losers of suburban train operators (who operate a multitude of ancillary services in their various geographies, including buses, grocery stores, and property management), such as Tokyu, Odakyu, Seibu, Keikyu, Tobu and Kintetsu?