Friday, April 19, 2024
HomeAutomationExplanation of future prospects from issues in the real estate industry with...

Explanation of future prospects from issues in the real estate industry with examples!

Until now, the real estate industry has continued to grow sales and expand the market under the influence of the ultra-low interest rate policy.

However, face-to-face sales became impossible due to the epidemic of the new coronavirus infection in 2020, and it was a big blow to the real estate industry, which had been doing well until now.

In this article, we will explain the current state of the real estate industry, and introduce the challenges it faces and future trends in the real estate industry as a whole.

Table of contents

  • Definition of the real estate industry
  • Current state of the real estate industry
    • Expansion of market size
    • Increase in the number of establishments and employees of real estate companies
    • changing needs
  • Declining population: Declining demand for housing, issues facing the real estate industry with vacant homes
    • Decrease in face-to-face sales and complex procedures
  • Future prospects of the real estate industry
    • real estate tech
  • summary

Definition of the real estate industry

The real estate industry is an industry related to land and buildings, and is classified into four fields: “development and construction,” “sales,” “leasing,” and “management.”

field Business content business person
Development/construction Building development and construction Construction companies, developers, etc.
sale Sale of developed buildings house maker etc.
management Leasing of developed buildings real estate brokers, etc.
rent building maintenance and cleaning Management company, etc.

Current state of the real estate industry

The real estate industry includes condominium development, real estate distribution, and leasing of apartments and office buildings.

What is the current state of the real estate market?

Expansion of market size

The market size of the real estate industry has continued to expand since 2015.

According to the Ministry of Finance’s Annual Corporate Statistics Survey ( FY2018), the size of the domestic real estate industry market grew from 39.3835 trillion yen in 2015 to 46.5363 trillion yen in 2018. growing up to

According to the results of the Ministry of Finance’s corporate statistics survey, the real estate industry is currently the fourth largest market after the automobile industry in first place, the construction industry in second place, and the medical industry in third place.

Even though the market is expanding, there are real estate companies whose sales are particularly growing.

Let’s take a look at the top five real estate industry sales rankings in 2020.

Company name Sales (unit: yen)
Mitsui Fudosan 1,905.6 billion
Iida Group Holdings 1,402 billion
Mitsubishi Estate 1,302,100,000,000
Sumitomo Real Estate 1 trillion 13.5 billion
Tokyu Fudosan Holdings 963.198 billion


Increase in the number of establishments and employees of real estate companies

According to the ” 2020 Real Estate Industry Statistics (September Revised) ” published by the Real Estate Transaction Promotion Center , the number of corporations in the real estate industry in fiscal 2018 was 337,934, an increase of 2.9% from the previous year. Of these, more than 10% (12.0%) have been on the rise for a long time.

As of 2014, there are 353,558 establishments, more than six times the number of convenience stores nationwide (55,460 as of February 2020).

A distinctive point compared to other industries is that more than 86% of the total (304,566 locations) consist of small-scale establishments with four or fewer employees.

And the fact that there are many establishments, even though many of them are small, means that there are many people involved in the industry.

According to the same data, as of 2014, there were 1,184,373 people working in the real estate industry.

Of the 61,788,853 people employed in all industries, 1.9% of all industries make a living in the real estate industry.

Furthermore, looking at trends in the number of employment by major industry (4-year university graduates), the number of employment in the real estate industry has continued to increase over the past eight years.

In March 2018, 14,143 people found employment in the real estate industry. The total number of employed people is 436,156, so about 3.2% of the total are in real estate-related jobs, which again indicates a steady growth.

changing needs

Over the past few years, attention has been paid to the trend of ” from consumption of things to consumption of things “, which represents the change in people’s values . This change has had a major impact on the real estate industry.

▼ Consumption
of goods Consumers tend to find value in owning goods when spending money.

▼ Experiential consumption
Activities, events, consumption trends that find value in experiences and experiences that cannot be obtained by owning

However, due to economic growth and other factors, the things that have been needed by many people have become widespread, and the awareness of the things themselves has faded. In an era when things were scarce, goods and services that enriched people’s lives were in demand, and the function of the product itself was regarded as value.

Against this background, the desire to consume has increased for “things” such as experiences that cannot be obtained by purchasing products alone, rather than the value of product functions.

This trend is becoming apparent in the real estate industry as well.

An example of this transformation is the “subscription” business model, in which users pay usage fees for the length of time they use a service or product, rather than a one-time purchase model.

In addition, as telework progresses and office demand diversifies, an increasing number of companies are selling space design and various accompanying services based on clear concepts such as “coworking offices.”

▼ Co-working
A work style by people who work in an environment where there are no restrictions on location, such as sole proprietors, entrepreneurs, office workers who are permitted to work from home, and nomad workers.

▼ Co-working space
An open workspace that can be used jointly by freelancers and startup entrepreneurs.

Declining population: Declining demand for housing, issues facing the real estate industry with vacant homes

Declining demand for housing

The problem of the declining birthrate and aging population is widely affecting the real estate industry.

In parallel with the aging of the population, the total population is also declining. According to data from the Ministry of Internal Affairs and Communications, the estimated total population as of December 2020 was 125.71 million.

A shrinking population means not only a shrinking economy, but a drop in demand for real estate.

In particular, the population of rural areas has decreased significantly, and along with this, the real estate industry is facing issues such as vacant houses and declining prices.

On the other hand, in urban areas, as many people seek housing on limited land, prices are rising, and the state of polarization continues, with prices differing greatly depending on the region.

Also, most of the population that buys houses is young, so if the size of the young population shrinks, the market demand will also decrease.

Looking at the age of the householder in the “ Housing Market Trend Survey 2018-Summary of Survey Results-‘ ‘ by the Housing Bureau of the Ministry of Land, Infrastructure, Transport and Tourism , it is found that the age of the householder is in their 30s in the categories of new custom-built houses, condominiums, and second-hand houses. was the most common, and the result was around 10% for those over 60 years old.

As the population ages and the number of young people declines, the number of people buying houses will also decrease . In addition to new purchase demand, there are also concerns about a decline in relocation demand.

empty house

As the population continues to decline, the problem of vacant houses is becoming more serious.

Abandoned vacant houses not only adversely affect the living environment and property value of the land in the surrounding area, but may also result in loss of business opportunities.

There is a rapid increase in the number of properties that are abandoned without being able to make the most of their original value as real estate.

According to the 2018 Housing and Land Statistical Survey released by the Statistics Bureau of the Ministry of Internal Affairs and Communications on April 26, 2019, the total number of homes in Japan increased from 60.63 million in 2013 to 6,242 as of October 1, 2018. 1,790,000 units (3%) increase in 5 years.

The number of vacant houses increased by 260,000 (3.2%) from 8.2 million in 2013 to 8.46 million in 2018. Furthermore, in 2018, the vacant house rate (the ratio of vacant houses to the total number of houses) was 13.6%, a record high.

Countermeasures: Sharing services

As population decline and the problem of vacant houses are attracting attention, one of the countermeasures is “sharing service” as a new idea that solves local problems and enriches our city and life, as well as a sustainable business.

You may have the impression that “sharing services” are “providing vacant houses as rental properties” or “providing them as community shared spaces”.

However, now we are entering a new market that utilizes “vacant houses” to meet the needs of “I want to work and live while traveling anywhere in the country” and “I want to get away from the city center and enjoy reading and living in the countryside on weekends.” is also possible.

In this way, I would like to introduce a successful example of removing the concept of “housing” and adopting a new concept of “creating a community.”

The nationwide unlimited living service “ ADDress ” is a subscription service that allows you to live in old houses and vacant houses nationwide for a monthly fee.

Each base provided by ADDress recruits local vacant houses and idle villas, secures them by purchasing or subleasing, and renovates them.

The house is fully equipped with a shared living room/kitchen, furniture, Wi-Fi, utility bills, amenities, etc., and even cleaning is provided within the price.

The appeal of ADDress is that users can use bases at reasonable prices, and base suppliers can earn income from vacant houses.

Many companies have cooperated with ADDress as partners and started the service in 2019.

ADDress contains the intention of challenging the still-rooted new building faith society even now, and it is also expected to be a solution to the “vacant house problem” which is currently regarded as a problem.

There are other proposals for countermeasures such as providing property information using VR , 3D cameras, online technology, etc. and demonstrating the effectiveness of viewing services for vacant houses in remote areas .

Decrease in face-to-face sales and complex procedures

Since most contracts in conventional real estate purchases are signed and sealed on paper, it is necessary to handwrite the address and name and seal on all contracts.

There are dozens of times to fill in by handwriting, and 47 times are required to seal. In addition, it is extremely complicated because many players such as financial institutions, real estate companies, insurance companies, judicial documents, etc. are involved in contract procedures.

However, due to the spread of the new coronavirus infection, there are many requests to refrain from going out in various parts of Japan, so there are many voices that feel the impact on tenant recruitment, especially the number of store visits and previews, and customer support that is not face-to-face There is a need for

In the real estate industry, business that used to be face-to-face will change to non-face-to-face, and changes will be required for long-standing industry customs.

online service

Now that sales and customer service that involve as little contact as possible have become commonplace, the real estate industry should actively implement such reforms.

Recently, AI-based real estate appraisals and online customer service using IoT and VR have become hot topics.

Among them, I would like to introduce a success story of Sumitomo Realty & Development, which started “remote condominium sales”.

Remote condominium sales is an initiative to increase customer convenience by reducing face-to-face opportunities while being conscious of the ” new lifestyle ” due to the impact of Corona .

The point is that customers can choose the service according to their wishes.

Sumitomo Realty & Development offers online tours, online applications, and IT heavyweight services, including online tours where you can receive information about desired condominiums and discuss mortgages with sales staff without having to actually visit a model room. We support non-face-to-face consultations, delivery, etc.

The aim is to improve the convenience and satisfaction of choosing a home by expanding options for customers who have difficulty visiting, such as those who want to refrain from going out, live far away, or have limited time.

From the background that about 200 groups used it in one month from the start, we can expect the future success of the online customer service initiative.

In this way, by introducing new technologies and improving the quality of services for consumers, it is necessary to emphasize the aspect of the real estate industry as a trustworthy industry.

In order to do so, it will be necessary to improve the environment and introduce technology as soon as possible.

Future prospects of the real estate industry

Let’s think together about what to do to survive in the real estate industry in the future.

real estate tech


In the first place, what is “Prop Tech, also called ReTech: Real Estate Tech”?

Real estate tech is a coined word that combines “real estate” and “technology”. Simply put, it is a term used for products and services that incorporate technology into real estate-related businesses and operations to create new value and achieve that.

It represents the use of IT in real estate, and along with the development of IT and deregulation, the number of new companies entering the real estate tech field has increased in recent years.

Service area

The service areas of real estate tech are diverse, including customer matching using the Internet, visualization and assessment of property prices using AI/artificial intelligence, smart locks using IoT, and viewing systems using VR.

VR / AR Services using VR /AR equipment, services related to data processing for VR /AR
IoT Any network-connected device that is installed or built into a property. In addition, a service to analyze the data obtained from the device
space sharing Short-term to medium- to long-term sharing of real estate and vacant spaces, or matching services
Reform/renovation/renovation A service that provides renovation planning, design and construction, and matching of renovation contractors on the web platform
real estate information A service that provides and analyzes data related to real estate, excluding property information
Brokerage support Support services and tools for real estate sales and rental brokerage
Management work support Support services and tools mainly for streamlining PM operations of real estate management companies, etc.
crowdfunding A service that collects funds from multiple investors, mainly individuals, on a web platform and conducts investment and loans in real estate, or matches fund demanders and providers for the purpose of real estate business.
Price visualization/assessment Services and tools for assessing real estate prices and rents, as well as their future prospects, using various data, etc.
matching Services that match property owners and users, labor force and operations, etc. (matching not related to sharing and remodeling)
Property information/media Services and platforms that aggregate and post property information, or general media related to real estate
Loan/Guarantee Services that provide, broker, and compare loans and guarantee services related to real estate acquisition

Real estate tech includes not only automating and streamlining existing operations, but also creating new business models that have never existed before, and initiatives that change the way the market should be.

Using real estate tech, for example, the company has architects and designers in-house, designing office spaces with higher productivity, and preparing a communication platform for users to create a mere “space”. Instead, we can provide new value such as a place for “comfortable business” and “creation of new business.”

From now on, we can expect “real estate tech” to play an active role in various fields.


While the real estate industry market is currently expanding, demand is declining as the population shrinks.

Against this background, real estate tech is trying to incorporate and utilize technology in real estate-related operations and businesses from various directions.

From now on, it is expected that the awareness of “using” rather than “owning” buildings will continue to spread among consumers, and the way real estate and the value itself will change greatly among people.



Please enter your comment!
Please enter your name here

Recent Posts

Most Popular

Recent Comments