Real estate in urbanization control areas can be bought and sold, but compared with urbanized areas, infrastructure is often less developed and the pool of buyers tends to be limited. In this article, we explain the basics of urbanization control areas, practical tips for selling, and the key points both sellers and buyers should understand.
What Is an Urbanization Control Area?
An urbanization control area is a zone designated under the City Planning Act to restrain urban development. Construction of homes and commercial facilities is restricted, and infrastructure such as electricity and water is often not fully developed. Much of Tokyo's 23 wards and Osaka City is designated as urbanized area, while control areas extend across suburban locations.
How Can You Sell Property in an Urbanization Control Area?
Working with a specialized brokerage is the most reliable approach for a successful sale.
Register With a Vacant Home Bank
This is a service that introduces vacant homes to prospective movers and can help you reach buyers interested in country living.
Use a Specialized Brokerage
It is important to choose a company with a track record of transactions in urbanization control areas. You may also find How to Choose a Property Management Company for Rental Real Estate helpful when selecting a firm with proven experience and expertise.
Narrow the Likely Buyer Segments
Identify and approach groups with a realistic likelihood of purchase, such as farmers, neighboring landowners, and people running businesses in the surrounding area.
What Should Sellers and Buyers Watch Out For?
Points for Sellers
The most important step is choosing a brokerage with transaction experience in urbanization control areas.
Points for Buyers
You should include a special contract clause regarding whether construction will be permitted. It is also wise to set a deadline for obtaining the necessary approval.
Items Both Parties Should Confirm
- Confirm the land category (residential land, farmland, etc.)
- Confirm the state of infrastructure development
- Confirm whether the area is designated under municipal ordinances
Frequently Asked Questions (FAQ)
Q. Can land in an urbanization control area be sold?
Yes, it can be bought and sold. However, because the pool of buyers is more limited than in urbanized areas, it is effective to work with a specialized brokerage.
Q. Can you build a house in an urbanization control area?
As a general rule, construction is restricted, but building permission may be granted if certain conditions are met, such as in the case of farmhouse residences.
Q. Is land in an urbanization control area inexpensive?
In general, it is less expensive than land in urbanized areas. One major reason is that infrastructure is not fully developed.
