Threat Of Condo Glut Prompts Firms To Build Single-Family Homes; Condo Groups Boost Purchases Of Housing Loan Corp Bonds

July 15, 2005
Threat Of Condo Glut Prompts Firms To Build Single-Family Homes

TOKYO (Nikkei)--Midsize property developers, which mainly build apartments and condominiums, have begun constructing single-family houses in suburbs amid concern that an oversupply of condos might develop in urban areas.
Leopalace21 Corp. (8848) and Hoosiers Corp. (8907) entered the market for single-family homes this year, with Takara Leben Co. (8897) re-entering it after a 10-year absence.
Leopalace21 plans to sell 300 single-family houses in Saitama and Chiba prefectures neighboring Tokyo and elsewhere. "We see a good business opportunity because the children of baby boomers, now in their 30s, prefer to own their own houses," said a Leopalace21 official. The company intends to market single-family homes nationwide in the future.
Hoosiers said it will put 38 single-family units on sale in Kashiwa, Chiba Prefecture.
Takara Leben sold 37 units in Kawagoe, Saitama and plans to market 40-50 more by March, projecting sales of just under 2 billion yen.
More than 80,000 condo units came on the market annually in the Tokyo metropolitan area over the six years through fiscal 2004, so homebuilders are concerned about a possible glut.
They are also shifting their focus to single-family houses partly because higher land prices in urban areas, the preferred locations for condo construction, are eroding their earnings.
(The Nihon Keizai Shimbun Friday evening edition)

July 15, 2005
Condo Groups Boost Purchases Of Housing Loan Corp Bonds

TOKYO (Nikkei)--Condominium associations increased their purchases of bonds issued by the government-affiliated Housing Loan Corp. by 160% in fiscal 2004 to a little more than 44 billion yen.
The associations raised their investment in the bonds apparently in response to the cap introduced this April to limit government protection of bank deposits to 10 million yen per account, financial sources said.
The minimum purchase unit of Housing Loan Corp. bonds is 500,000 yen. They mature in 10 years and carry interest of 0.629% this fiscal year. Their principal is guaranteed by the corporation.
The number of condo associations that purchased the bonds jumped 36% to 1,969, with purchases per group averaging 44.7 units, or about 22.35 million yen.
The Housing Loan Corp. intends to float 45 billion yen worth of bonds in fiscal 2005, about the same as last year.
(The Nihon Keizai Shimbun Friday morning edition)