Relationship between market share and rent level: understanding supply structure in the Japanese private rental housing market
International Journal of Housing Markets and Analysis
ISSN: 1753-8270
Article publication date: 12 July 2023
Abstract
Purpose
This study aims to investigate the relationship between market share and rent levels to understand the supply structure in the Japanese private rental housing market.
Design/methodology/approach
The study calculates the municipal-level market share of a dominant rental housing operator in Japan and ascertained the overall market rent and the dominant operator’s rent premium at the municipal level by using a major web portal’s listing data of rental houses.
Findings
The study shows that, as market share increased, overall market rent tends to decrease, and analyzed by market share, there is no significant difference between the rent of the dominant operator and the overall market rent.
Practical implications
The results of the study suggest that dominant operators may have lowered the rent of their own property to prioritize filling vacancies, which, in turn, causes the overall level of market rent to decline. This is an outcome of rental housing operators’ strategy to maximize long-term rental income under sublease contracts with individual owners, which ensures stable rental income for owners regardless of the occupation status of the apartments.
Originality/value
Previous research on regional monopolies in mortgage sales and brokerage businesses in the USA implies that rental housing operators in a position of great influence over the market can control and keep the market rents at high levels, that is, at large costs for consumers. The findings of the study are novel in showing the inverse relationship in the Japanese private rental market.
Keywords
Acknowledgements
The authors would like to thank three anonymous referees, Richard Reed (the editor), Yuta Kuroda (discussant) and Takeshi So, participants of 2022 Applied Regional Science Conference, and seminar participants at Hitotsubashi University for their helpful comments and suggestions. The authors acknowledge Daito Trust Construction Co., Ltd. for their helpful comments and suggestions, as well as for providing the data. This work gratefully acknowledges the support received from JSPS KAKENHI Grant Numbers 23K13464, 22H00065, 20K14896 and 20H00082.
Conflict of interest: The authors have no conflicts of interest to declare.
Citation
Suzuki, M. and Shimizu, C. (2023), "Relationship between market share and rent level: understanding supply structure in the Japanese private rental housing market", International Journal of Housing Markets and Analysis, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJHMA-03-2023-0037
Publisher
:Emerald Publishing Limited
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