Rising construction and labor costs are hitting the cost of major repairs for rural condominiums hard. Repairs that could once be covered with 20 million yen are now often swelling to 28 million yen or more, and across the country more and more individual owners without sufficient financial strength are unable to secure repair funds and are left with no choice but to tolerate aging buildings. This issue is not most severe in urban centers. Rather, it is owners of properties in rural and suburban areas who are facing the heaviest impact. Based on candid voices from the field, this article organizes the reality of surging repair costs and the options now confronting owners in rural areas.
Key points in this article - Due to rising construction costs, major repair expenses have climbed by roughly 30%, from 20 million yen to more than 28 million yen - The idea that “it is cheaper because it is rural” belongs to the past; material prices are effectively uniform nationwide, and rural owners are no exception - Falling exterior wall tiles pose a direct danger to passersby and residents, and postponing repairs can also create legal risk - It is necessary to face the industry reality of “a market where only those with financial strength can remain” head-on, without delay - It is important to calmly compare multiple options, including sale, rebuilding, and a review of management methods
Why are major repair costs rising so sharply now?
There are multiple factors behind the sharp rise in major repair costs. The first point to understand is that rising construction costs are not a temporary phenomenon.
Material prices: “It is cheaper in rural areas” is a thing of the past
The prices of construction materials such as steel, cement, and insulation are directly affected by higher import costs and the weak yen. These material prices circulate at nearly the same level whether in Tokyo, Gunma, or Niigata. In the past, it was reasonable to assume that construction costs were lower in rural areas. But once the cost of materials themselves rises, simply being located in a rural area no longer provides a way to reduce expenses.
According to the Ministry of Land, Infrastructure, Transport and Tourism’s Statistical Survey of Construction Works, construction costs have continued to rise since 2020 as higher material prices and labor costs have compounded one another. The reality that property owners in rural areas must pay repair costs at the same level as Tokyo is now a structural issue that can no longer be avoided.
Labor costs and the shortage of skilled technicians are accelerating the problem
The aging and decline of skilled technicians who can perform repair work is also serious. Tasks such as exterior wall repair, waterproofing, and tile replacement are difficult to mechanize and depend on experienced craftspeople. However, the number of younger technicians entering the industry is not keeping pace with demand, and the unit cost per technician is rising.
In rural areas, the number of craftspeople is even smaller than in cities, and the number of contractors available to undertake work is limited. In an environment where competition does not function effectively, there is a real tendency for construction unit prices to remain high.
“Unable to repair” is becoming a reality for rural condominiums
The figure of repairs rising from 20 million yen to more than 28 million yen does not simply mean “higher costs.” For many owners, it means repairs are no longer possible.
Even Adachi is barely manageable. In Gunma and Niigata, it is 100% impossible
When speaking with industry professionals, you sometimes hear comments like this: “If it is barely possible to come up with repair costs even for a property in Adachi Ward, then in Gunma or Niigata we are already seeing cases where major repairs are 100% impossible.” This is not an exaggeration.
The main ways to cover repair costs are repair reserve funds and financing. However, because rent levels are lower for properties in rural areas, the amount accumulated in reserve funds tends to be smaller. As for financing, additional lending for older properties is increasingly difficult because collateral valuations are low and financial institutions are more hesitant. The double pressure of rising costs and more difficult fundraising is pushing rural owners into a corner.
If you are an owner struggling to work out how to fund major repair costs, please also refer to Five strategies for optimizing management costs in rental property management.
The pressing risk of falling exterior wall tiles
One thing that is actually happening at properties where repairs have been postponed is the falling of exterior wall tiles. In condominiums more than 30 years old, the risk of exterior wall tiles detaching from the substrate and falling increases. Falling tiles can directly strike passersby or residents. There are properties where such accidents have already occurred, and this is by no means someone else’s problem.
In such circumstances, one temporary measure available to owners is to place traffic cones and designate restricted areas. However, this is only a stopgap response. Unless fundamental repairs are carried out, the building’s deterioration will not stop. If an accident occurs, the owner bears the legal responsibility, which can lead to serious consequences including damages, compensation to residents, and a loss of trust.
Weeds on the roof, traffic-cone responses: the reality on site
In one 35-year-old condominium in a rural area, for example, rooftop waterproofing has deteriorated, soil and organic matter have accumulated in the drains, and weeds are growing unchecked. If the waterproofing layer is functioning, water drains properly. But when deterioration advances, water enters the building, leading to corrosion of the structure and leaks from the ceiling. Rooftop waterproofing deterioration is something that “is difficult to notice from the outside, yet gradually damages the building from within.”
The reason such conditions are left unaddressed is simple: there is no money available. If repair costs cannot be paid, the only option is to postpone them. If they are postponed, deterioration advances further, and even higher repair costs become necessary. Across the country, the number of owners unable to escape this negative spiral continues to grow.
The industry’s candid truth: “A market where only those with financial strength can remain”
The words of professionals working in the field are direct. “This will become an era in which owners without personal financial strength are weeded out.” “A situation will emerge in which only those with strength remain.” These views are now increasingly shared among industry stakeholders.
The weeding out of individual owners has already begun
In the past, rental real estate was a business model in which even older properties could generate stable long-term income if they were managed properly. However, surging repair costs are undermining that premise. Properties that cannot be repaired become less attractive to tenants, vacancy rates rise, revenue deteriorates, and repairs become even harder to carry out. This creates a vicious cycle.
Corporate investors with financial strength and owners with larger asset bases can respond to this changing environment. But for individual owners with one or two buildings, repair costs exceeding 28 million yen may amount to several years of annual property income. Only a limited number of individuals can shoulder that burden alone.
Typical apartment rebuilding costs and key points for income planning explains in detail the cost structure of rebuilding as one alternative to repairs. Please refer to it to understand the overall cost picture.
The reality that government policy has not kept pace
Government policy responses to these issues cannot yet be called sufficient. Institutional measures are progressing, including revisions to the Condominium Management Optimization Act and reviews of guidelines on repair reserve accumulation. However, direct support for owners whose properties have already reached the point where repairs are needed remains limited.
Industry groups are calling for expanded public subsidy programs and low-interest financing as a response to higher construction costs. However, policy implementation takes time. This is not a situation in which waiting for systems to improve is a realistic option. Individual owners are at a stage where they must look squarely at the current condition of their properties and make decisions.
What happens if repairs are postponed? Understanding the negative spiral
Let us organize, in concrete terms, what happens when repairs are postponed.
First, building deterioration accelerates. Exterior walls, waterproofing, and building equipment continue to age if left unattended. Repairs that would be relatively inexpensive in the early stages require much larger work if neglected. Postponing costs ultimately results in even greater costs. That is the basic nature of repairs.
Next, tenants leave. Aging buildings directly affect tenants’ living conditions. Elevator failures, plumbing problems, leaks caused by cracks in exterior walls: when such issues pile up, tenants choose not to renew and move out. Rising vacancy rates lead to lower revenue, which in turn pushes repairs further out of reach.
Then asset value declines. Properties that have not been repaired receive lower market evaluations, and their sale prices also fall. There are times when the right judgment is that “selling now is more advantageous than continuing to hold the property without being able to repair it.” If that timing is missed, owners can end up in a position where they want to sell but cannot.
If you feel the time has come to consult specialists earlier about your property’s current revenue situation and future outlook, please refer to Practical cost management and cost reduction for major repairs.
Options rural owners should be considering right now
The structural problem of rising construction costs cannot be changed by any single individual. However, owners can choose how they respond to their own properties.
Understand current repair costs and revise the plan
The first thing needed is an accurate understanding of how much it will cost to repair your property. Compare the balance of your repair reserve funds with the total repair costs likely to be needed over the next 10 to 15 years. The Ministry of Land, Infrastructure, Transport and Tourism’s “Guidelines on Condominium Repair Reserve Funds” provide benchmarks for appropriate reserve amounts.
If current reserves are insufficient, it is necessary to consider measures early, such as increasing monthly contributions, building one-time reserve funds, and preparing financing. Early consultation with repair companies is also effective. It is important to obtain a professional judgment on whether repairs are needed immediately or whether waiting a few more years is possible.
If you would like to learn more about shortfalls in repair reserve funds, please also refer to Five strategies for optimizing real estate management costs.
The options of selling, rebuilding, or changing management methods
If repair costs cannot be covered, the options include selling, rebuilding, or reviewing management methods.
Selling means deciding to act while the property still has market value, before deterioration progresses further. Appraised value varies significantly depending on the building age and repair history. If you are considering a sale, I recommend confirming the property’s market value now, while major repairs are approaching.
Rebuilding is the idea of making use of the land to create a new income-producing property. The cost is substantial, but in terms of seismic performance, energy efficiency, and meeting tenant needs, there may be long-term advantages compared with continuing to hold an aging property. This is explained in detail in Cost burdens and risk management in rebuilding older condominiums.
Reviewing management methods is an approach that seeks to optimize costs and improve income at the same time. By combining a change in management company, a review of rent settings, and stronger vacancy countermeasures, it may be possible to create room to accumulate repair funds.
INA’s perspective: look squarely at the risk of “continuing to hold”
To be candid, what concerns me most in the field of real estate consulting is the danger of assuming that simply continuing to hold a property is safe. Holding a property has costs. If an owner continues to hold it without being able to pay for repairs, asset value will steadily decline.
What is needed is not postponement based on the vague assumption that “things will somehow work out,” but an honest consideration of what is best, among the options available today, for both the owner and the residents. From the perspective of long-term asset preservation, decisions should be based on transparent information that includes disadvantages as well. I believe that is the foundation of sustainable rental management.
Conclusion
Rising construction and labor costs are fundamentally changing the assumptions that have supported traditional rental management for property owners in rural areas. The key points are as follows.
- The reality of costs: Cases in which a 20 million yen repair grows to more than 28 million yen are increasing, and in rural areas there are already properties judged to be “100% impossible” to repair
- The reality of risk: Falling exterior wall tiles and deteriorating rooftop waterproofing create direct danger for residents and passersby and carry legal liability
- The reality of the market: The industry view that “only those with financial strength can remain in this market” has reached a level that cannot be dismissed with easy optimism
- The reality of policy: Government support measures are being expanded, but immediate assistance for owners whose properties now require repairs remains limited
- The need to choose: Whether the choice is repair, sale, or rebuilding, postponement only narrows the available options
For owners who hold real estate in rural areas, I recommend reviewing the condition of each property once again based on actual numbers. Obtaining a repair estimate, confirming the adequacy of repair reserve funds, and consulting specialists: these three actions are the most important steps available right now.
Author: Daisuke Inazawa (Representative Director, INA&Associates Co., Ltd.)
Last updated: April 2026
Frequently Asked Questions (FAQ)
Q1. Why are major repair costs high even in rural areas?
The prices of construction materials such as steel and cement are effectively the same nationwide, so rural areas are not necessarily cheaper. Material prices are directly affected by import costs and the weak yen, which means they remain at nearly the same level in Tokyo and in rural regions. In addition, rural areas have fewer contractors capable of carrying out the work, so competition is weaker and construction unit prices are more likely to stay elevated.
Q2. If I cannot pay for repairs, is it okay to leave the property as it is for now?
Postponing repairs is not recommended. If left unattended, deterioration accelerates and ultimately leads to even higher costs. There is also a greater risk of accidents involving residents or passersby, such as falling exterior wall tiles, and the owner’s legal liability may be called into question. If you cannot secure the funds, it is important to consult specialists and examine realistic options such as phased partial repairs, financing, sale, or rebuilding.
Q3. What should I do if I realize my repair reserve funds are insufficient?
First, refer to the Ministry of Land, Infrastructure, Transport and Tourism’s “Guidelines on Condominium Repair Reserve Funds” and confirm the reserve amount required for your property. If a shortfall is clear, it is effective to take early measures such as increasing monthly contributions, building one-time reserve funds, and consulting financial institutions about financing. The starting point is to ask your management company or repair specialists to inspect the building so that you understand when, for what, and how much money will be needed.
Q4. If I am going to sell an older condominium in a rural area, is it better to sell before or after repairs?
It depends on the case, but selling before repairs may allow you to avoid the repair burden. However, the poorer the repair condition, the lower the sale price will be. As a basic approach, after obtaining a repair estimate, compare “expected sale price after repairs minus repair costs” with the “sale price before repairs.” Because the optimal answer differs depending on location, building age, and market demand, I recommend consulting a specialist.
Related reading
- The power of networks to reduce major repair costs by 30%
- Typical apartment rebuilding costs and breakdowns: key points for income planning and cost reduction
Citations and reference materials
- Ministry of Land, Infrastructure, Transport and Tourism, “Guidelines on Condominium Repair Reserve Funds”
- Ministry of Land, Infrastructure, Transport and Tourism, “Statistical Survey of Construction Works” (construction cost trend data)
- Ministry of Land, Infrastructure, Transport and Tourism, “Guidelines for Proper Condominium Management”
