July 24, 2015 4:17 pm

Why foreign buyers are seeking ‘worthless’wooden homes in Kyoto?
Lucy Alexander Share   Author alerts   Print  Clip

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Demand is growing for old­fashioned ‘machiya’ houses which offer Japaneseheritage at a bargain price

A 2,962 sq metre house in the western Arashiyama district of Kyoto, Y700m ($5.65m)

T

he popular image of Kyoto may be one of incense­infused temples and elusive geisha, but theview from the city’s station is of concrete office blocks, tangled telephone wires and cheap
prefab housing. Only a few time capsules from Japan’s pre­industrial past survive behind the tacky
pachinko parlours.
Machiya — merchants’ wooden town houses, whose ornate, shadowy eaves once lined every street
in the former imperial capital — are being steadily demolished. Postwar, Japan’s baby­boomers
wanted an address in a spanking new, earthquake­proof apartment block; machiya were regarded as
worthless anachronisms.

Only about 28,000 remain, out of the city’s 667,000 households, and they are disappearing at a rateof 1.6 per cent annually, according to Akari Nishii of the Machiya Machizukuri Fund, a preservation
charity.
Machiya are typically concealed behind elegant wooden lattices, which allow for privacy whileletting in air and light. The front room was typically used as a shop, while the private back rooms,
with ancient wooden beams, sliding paper screens and tatami­mat­covered floors, overlook acourtyard garden.
Many of these buildings, often semi­derelict, are today being rescued by foreign buyers looking fortheir very own slice of ancient Kyoto. Hachise, a machiya sales agency, launched an English
language service last year to accommodate growing foreign demand, mostly from western expats
based in Hong Kong and Singapore.
“Usually they are looking for a holiday house,” says Kae Motokado, a spokeswoman, “but we also
have an American couple and two French couples who are preparing to live in their machiya.”
Part of the attraction is cultural, part is affordability. Kyoto is home to 17 Unesco world heritage
sites and is regularly voted the world’s best city to visit. Many buyers see property there as a bargain
and are drawn by the plummeting yen, which has lost a third of its value against the dollar in threeyears. Japanese real estate is also still underpriced 25 years after the bursting of the asset bubble.
In addition, counter­intuitive property economics, whereby new homes depreciate over a 30­year
lifespan, mean that old buildings are almost worthless, their only value being the land they sit on.
Japan therefore has no culture of house restoration. “Most machiya cost between Y30m and Y55m[$242,500 and $445,000],” says Motokado. “The building itself is worth nothing — people will sell
it to a big real estate company as a building lot.”
Christian Lengelle, a Frenchman based in Tokyo, isrestoring several machiya for rental to tourists. “I love
the historical value of those houses,” he says. The costof renovation is “anything between Y300,000 toY800,000 [about $2,400 to $6,500] per tsubo” — aJapanese measurement equivalent to 3.3 sq metres.
Machiya owners who let their property can expect
rental income of about Y18,000 ($145) per night in highseason, and half that in low season, according to Ken
Hayashi, who runs House Network, a buying agency forforeigners.

The garden of a ‘machiya’ in Kyoto prior to its renovation by
Christian Lengelle

The city government now provides renovation grants, as does the Machiya Machizukuri Fund, which
has subsidised 73 restoration projects in nine years. However, according to Motokado, foreignclients increasingly want “a house they can move right into”, so Hachise plans to introduce a fullrenovation and rental service.
The company has 20 machiya for sale, including one
exquisitely restored 77 sq metre home with woodfinishes and sliding doors opening on to four terraces,for Y63.8m. The best of the unrestored properties is a
190 sq metre former kimono merchant’s residence,
more than 100 years old, with a traditional double­
height ceiling over the kitchen and a separate
warehouse. The house is on sale for Y108m.
Young Japanese are also now beginning to buy machiya
for use as modern live­work spaces. “They are becoming
The interior of a 77 sq metre, renovated property in east
popular among the young generation who want to start
Kyoto, Y63.8m
a café or gallery, or a co­working space for ITbusinesses,” said Motokado. Foreigners, meanwhile, are cautiously welcomed. “We know someforeigners have a very rich understanding of Japanese culture; more so than most Japanese people,”says Nishii.
Not every foreigner is sensitive to cultural nuances. Yukiko Takano, of Sotheby’s International
Realty, spends a lot of time managing the expectations of Asian buyers.
“Asian VIPs usually ask to see homes starting at Y500m,” she says. This is a rarity in Japan, though
Sotheby’s is selling a beautiful 2,962 sq metre estate in western Kyoto for Y700m. “What they wantis the classic Kyoto feel — a large garden with beautiful trees and a serene atmosphere,” she says,“but with en­suite bathrooms.”
Buyers for what Takano calls “top­notch” homes depend on the fluctuations of the world economy.
“Right now, it’s Hong Kong Chinese, Taiwanese, Thai and Indonesian. It used to be French. Someday it will swing back to Japanese.” When that day comes, the micro­trend for restoring “worthless”
old houses may have finally gone mainstream.
Buying guideMachiya owners who wish to let their properties are meant to obtain a hotel licence; however, many
unlicensed rentals are arranged on Airbnb
Don’t expect a survey when you buy. Transactions in Japan are based on trust
Machiya do not comply with modern earthquake safety regulations. Earthquake insurance starts at
Y180,000 ($1,449) for five years’ coverage
What you can buy for . . .
$500,000 A run­down seven­room machiya in central Kyoto built in 1889
$1m A 286 sq metre house with a tea ceremony room and traditional gardens$2.5m A former geisha house with original features in Kyoto’s Gion district
For more properties, please visit ftpropertylistings.com

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