Real estate brokerage industry
The real estate brokerage industry in Japan is regulated under the Building Lots and Buildings Transaction Business Law and covers activities such as the sales and purchase, exchange, and leasing of real estate. The industry is broadly divided into sales agents who act on behalf of sellers and brokers whose services are limited to mediation between sellers and buyers or landlords and tenants. Businesses engaged in real estate brokerage have to obtain licenses from prefectural governments or the Ministry of Land, Infrastructure and Tourism. In 2021, there were more than 128 thousand of such licensed businesses.Real estate transaction agents
By law, at least one in five employees in a real estate broker company must be a licensed real estate transaction agent. Real estate transaction agents, or real estate notaries, have passed a national state examination and are licensed by prefectural governments. Their main role is to ensure secure and fair transactions and providing the explanation of important matters, a disclosure statement required before concluding a contract. In 2021, there were more than one million registered real estate agents, 30 percent of whom were active in their profession.Digitalization amid the coronavirus (COVID-19) pandemic
The coronavirus (COVID-19) pandemic caused a temporary slump in the activities of real estate agents and brokers and drove up demand for contactless services and digital transactions. Japanese consumers showed growing interest in digital services, such as online viewings and virtual reality (VR) tours, that allowed them to avoid face-to-face contact.In addition, the internet has increasingly become the first port of call for consumers seeking information about real estate. Given the growing importance of online services to consumers, the B2C PropTech market, which includes online brokerage and property search services, was forecast to grow significantly in the coming years. Changes in the law that have made digital real estate documents possible are another step towards digitization. Since May 2022, explanations on important matters and contracts can be transmitted and signed electronically, eliminating the need to use a Hanko seal.
