Brokerage revenues of major Japanese residential real estate companies increase in 2021

In May, the Real Estate Information Institute released the results of its survey of the brokerage performance of major real estate brokerage firms in 2021.

The survey was conducted by issuing a questionnaire which was sent out to the entire industry with responses received from 21 major real estate companies.

Among the companies surveyed, all have increased their brokerage commission income. In particular, Sotetsu Real Estate Sales and Keio Real Estate whose annual performance increased by 47% and 40.6% respectively compared to the previous year.

Additionally, four other companies increased revenue by 30% or more and six companies grew by 20% or more, bringing the total number of companies with double-digit growth to 18 of the 21 companies surveyed.

Notes on the above data

Mitsui Fudosan Realty Group’s brokerage revenue includes sales brokerage, rental brokerage and property management revenue.

Sumitomo Real Estate Sales brokerage revenue includes rental brokerage.

Tokyu Livable’s brokerage revenue includes rental brokerage revenue and rental-related revenue.

Figures for Tokyo Tatemono Real Estate Sales and Sumitomo Forestry Home Service are through December 2021 as that is their year-end; all others are through the end of March 2022, as this is a typical year-end for Japanese companies.

In 2020, many businesses were forced to suspend operations due to the state of emergency declared after the pandemic began, and many did not perform well.

In 2021, however, many companies achieved record revenue performance.

Leading brokerage, Mitsui Fudosan Realty Group, posted record commission revenue and the third-best performance in company history by number of trades executed.

According to the company, double-digit growth in the number of retail transactions in the Greater Tokyo Area, particularly in the central Tokyo area, led the overall activity.

The average unit price of retail transactions increased by 15% nationally compared to 2019, the year before the pandemic, and the increase in the number of transactions was directly linked to the increase in commission income, according to comments from Mitsui Fudosan Realty Group.

Tokyu Livable posted the second-highest amount of commission income for the first time ever, with record performance in retail and wholesale thanks to strong sales. Sumitomo Real Estate Sales also recorded a record number of transactions, mainly second-hand condominium transactions.

Nomura Real Estate Solutions also posted record performances.

Many businesses said the impact of the pandemic was more limited than in 2020 and retail and wholesale sales were doing well.

In the retail sector, “buyer response was stronger than last year, and it was a year of destocking” (Kintetsu Real Estate), “high purchasing needs continued both at end-users than operators, leading to higher contract prices” (Odakyu real estate), and “housing purchase needs have increased due to the voluntary limitation of exits and adoption working from home, which, combined with the low interest rate policy, led to stable sales” (Taisei Yuraku Real Estate Sales Group).

The common complaint from all businesses was the lack of properties for sale. Many companies have expressed concern that “the market as a whole has few properties for sale, which makes matching [buyers to sellers] difficult” (Mitsubishi Jisho Real Estate Service), “Real estate prices have increased as the number of properties for sale on the market has remained low” (Sumitomo Forestry Home Service) and “Competition for sales contracts has is intensified” (Odakyu Real Estate).

However, there are recent signs that the tide is turning. For the third consecutive month from February to April, the number of second-hand condominiums for sale on the REINS (Real Estate Information Network for Eastern Japan) system has increased of the same period in 2020 to 2021.

In addition, Mitsui Fudosan Realty Group said that the volume of sales information began to increase around the beginning of the year, while the volume of purchase information began to decline slightly.

Some companies said they felt a slight slowdown as consumers were unable to keep up with the price spike. As new condo prices continue to rise, the prevailing view in the industry is that sale prices will remain high for the time being, but more and more people are becoming more cautious with a view to entering. in a phase of price adjustment or correction.

Further reading

RE Port article describing the results of the investigation (Japanese only; May 2022)

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