(3) Preparing the environment for a housing market in which diverse housing needs are properly fulfilled

a. Preparing a market that facilitates the smooth trading of existing homes

The approaches (a) and (b) outlined below have been promoted to prepare a market in which existing homes are smoothly tradable, on the basis of the Total Plan for Renovating Existing Homes (March 2012).

Since March 2013, the MLIT had held the conferences on facilitation of trading and using existing homes to discuss challenges for the existing housing market. In June of the same year, the conference reported its activities and recommendations. In response to this report, the MLIT has addressed challenges to improve methods for evaluation of existing homes. Since September of the same year, the MLIT has held the round table discussions with members from private companies involved in the existing housing market and financial institutions to establish improved methods for evaluation of existing homes in the existing housing market and the housing finance market. Also, in the 2014 Tax Reform, in addition to making special provisions for the registration and licensing tax on acquiring existing homes that require a specific level of quality improvement, they have also decided that if an existing home is to have earthquake-resistance construction work done to it after acquisition, that it would be subject to mortgage tax breaks and other special provisions.

(a) Preparing the market environment in which consumers can renovate their homes with an ease of mind

Consumers planning to renovate their homes are concerned about the cost and how to select the right contractors. Keeping the worried consumers reassuring is essential to an expanding the home renovation market.

Efforts currently taken in this regard include telephone consultation, the “Renovation Estimate Checking Service,” in which consumers can receive consultation on specific quotations, available from the “Center for Housing Renovation and Dispute Settlement Support,” and “Expert Advice” at local bar associations. In FY2013, there were 9,017 cases of telephone consultation regarding renovation, 911 cases of renovation estimate check, and 671 cases of expert advice regarding renovation.

In FY2013, there were 2,638 subscriptions to the Renovating Defect Liability Insurance Program, an insurance package that combines an inspection on renovating works in progress with warranties against possible defects in the works, and subscriptions to the large-scale repair work liability insurance program for large-scale apartment building repairs were filed for 810 apartments.

Contractors seeking to be insured must be registered with the Housing Defect Liability Insurance Corporation, subject to their possession of a construction business license, proven performance, etc. The Program allows consumers to browse through a list of registered contractors at an Association of Housing Warranty Insurance website as a helpful tool in choosing contractors.

To further develop a market environment in which consumers feel they can commission renovating work without worry, we have a “Study Group on Promotion of Proper Residential Renovating Work through Trade Associations,” to consider what initiatives the organizations of such business operators and their members need to implement in terms of promoting consumer protection and proper remodelling work.

(b) Preparing a market climate in which consumers can purchase existing homes without worry

As consumers consider purchasing an existing home, they are fearful about the quality or performance of the existing home. Expansion of the existing home distribution market would not be possible without resolving such fears felt by the consumers.

For this reason, to encourage smooth dissemination and secure consumers' confidence in the current state of housing inspections that are done to give consumers information regarding the state of an existing property when buying or selling, we compiled an 'Existing Housing Inspection Guidelines' in June 2013, which explains the points of consideration for inspection methods and service provision.

In FY2013, there were 4,072 subscriptions to the Existing Housing Defect Liability Insurance Program, an insurance package that combines an inspection on existing housing with warranties against possible defects in the housing. In the same fiscal year, for defect insurance in buying or selling an existing home, a new insurance product was created where the previous five-year insurance period for buying or selling property was changed to a one-year period for individuals, and to a two year period for businesses, and developed insurance products for buying and selling existing housing that are easy for consumers and businesses to use.