Insights into Senior Housing... in the Land of the Rising Sun

Insights into Senior Housing... in the Land of the Rising Sun 

This article summarizes key points from the seminar titled "Insights into Senior Housing... in the Land of the Rising Sun", which provided valuable information about real estate projects for the elderly based on Japanese concepts. The seminar featured insights from Assoc. Prof. Trairat Jarutthas, from the Faculty of Architecture at Chulalongkorn University, and Mr. Keiji Arai, a real estate expert from Japan, who shared their knowledge with the participants effectively.

“Japan, Europe, and America have fully entered a super-aged society. By 2050, the global population aged over 60 is expected to reach 2 billion. Therefore, the elderly market represents a significant segment of the real estate business.”

                  The aged society, as defined by the United Nations, is a society where the population aged 60 and over exceeds 10% of the total population. There are three levels of entering an aged society:

1. Aging society: where the population aged 60 and over exceeds 10% or those aged 65 and over exceed 7% of the total population.
2. Fully aged society: where the population aged 60 and over exceeds 20% or those aged 65 and over exceed 14% of the total population.
3. Super-aged society: where the population aged 65 and over exceeds 20% of the total population, indicating that the country has fully entered an aged society.

                  Thailand entered an aged society in 2005, with 10.4% of the population being elderly. According to 2015 demographic data, Thailand's population was 65,203,979, with 10,569,021 people aged 60 and over, accounting for 16.2% of the total population. It is projected that by 2021, Thailand will fully enter a complete aged society with over 20% of the population being over 60. This situation results from advancements in technology and medicine, leading to increased life expectancy, alongside family planning policies that have reduced birth rates, causing a rapid increase in the elderly population in Thailand.

                  The comparative table of the transition into an aged society shows that Japan is a leading example, having entered a super-aged society faster than other countries, followed by Italy, Sweden, and Germany.

International comparison of the years taken to move into the aged society

                  The average life expectancy worldwide from 2005-2010 shows that populations in America, Europe, and Japan, considered developed countries, have the highest life expectancy, ranging from 77.2 to 81.5 years, while African countries, mostly developing nations, have an average life expectancy of only 41.5 to 50.7 years.

World Population by Age 65+ and Immigration

                  The increasing number of elderly people worldwide, coupled with rising living costs in developed countries, has led many seniors to relocate from major cities and even abroad to countries with lower living expenses. Various countries are attempting to attract elderly populations to settle within their borders. For instance, Malaysia's government has implemented policies to position the country as a global hub for elderly care services, supporting businesses related to the elderly and extending long-stay visas for foreigners aged 50 and above from one year to ten years. Similarly, Thailand has recently extended the long-stay visa for foreigners aged 50 and above from one year to ten years, applicable to 14 countries including Denmark, Norway, the Netherlands, Sweden, France, Finland, Italy, Germany, Switzerland, Australia, the United States, the United Kingdom, Japan, and Canada, provided they maintain a bank account with a minimum deposit of 3 million baht for at least one year. Factors influencing the choice of country for long-term stays among the elderly include:

1. 
   
   Cost of living 
   2. Taxes
   3. Crime and safety 
   4. English language usage 
   5. Entertainment 
   6. Environmental conditions 
   7. Expat community 
   8. Healthcare 
   9. Infrastructure 
   10. Real estate affordability 
   11. Real estate restrictions 
   12. Leisure activities 
   13. Housing options (items 7-13 relate to real estate)

                  For the Japanese elderly market, the target areas in Thailand that they are familiar with and interested in include Bangkok, Chiang Mai, and Phuket. Data from a 15-year study on the Japanese elderly market in Thailand, involving 1,552 participants, reveals the following:

                  1. Study of the housing preferences of Japanese seniors visiting for long-term stays: A case study in Chiang Mai province shows that the typical participant is a male aged 65-69, married, with a bachelor's degree, previously employed in a company, government service, or self-employed, with stable financial status. Most income comes from pensions, followed by savings, with an income range of 50,001-100,000 baht. They are in good health and enjoy activities like golfing, primarily residing in condos on Huay Kaew Road and Nimmanhaemin Road in Chiang Mai. Factors influencing their housing choices include (1) Physical aspects: public utilities, NHK Premium channels, and high-speed internet; (2) Social aspects: preference to live within Thai communities; (3) Financial aspects: condo rent of 10,000-20,000 baht/month; (4) Property aspects: strong building structure, functional space, and kitchen; (5) Project information: safety of life and property, proximity to workplaces, shopping malls, and banks.

                  2. Study of the living conditions of Japanese residents in rental projects: A case study in Sukhumvit Soi 41, Bangkok, involving 157 Japanese residents, primarily males aged 41-50 (with some up to 75), holding bachelor's degrees, married, with some over 60 years old and single. They are in good health, with incomes ranging from 133,001-190,000 baht and expenses of 100,001-150,000 baht (mostly for housing and food). They typically find housing through real estate agencies, with friends' recommendations as a secondary source. Most rent ranges from 35,001-50,000 baht/month, choosing locations for safety, community proximity, and convenience, often preferring one-bedroom apartments of about 60 sqm with Japanese-style entrances, separate shower and bathtub, NHK channels, and high-speed internet, close to convenience stores and community centers, and near hospitals.

                  3. Study of living conditions and health behaviors of Japanese residents in multi-family buildings in Wattana district, Bangkok, involving 134 Japanese residents, mostly females aged 55-59, with bachelor's degrees. Most are managers working in Bangkok, with average incomes from savings and salaries of 200,001-300,000 yen, spending over half their income on living expenses. They live with spouses and one child, primarily choosing residences through real estate brokers, mostly in apartments, followed by serviced apartments, with monthly rents exceeding 140,000 yen, and amenities including health services like swimming pools, fitness centers, saunas, massage, playgrounds, and cleaning services.

Mr. Keiji Arai
President & Representative Director, Green Life Co., Ltd.

“Currently, 73% of the wealthy in Japan are over 60 years old, making the elderly market in Japan highly attractive due to their significant purchasing power.”

                  Green Life is one of the top 10 elderly service industries in Japan, operating over 68 facilities nationwide, including nursing homes with 4,373 beds (with a 99% occupancy rate) and employing 2,748 caregivers. As Japan has over 20% of its population aged 65 and above, it has fully entered a super-aged society. The Japanese government allocates over 4 trillion yen (approximately 3 trillion baht) annually for elderly care, which is substantial. Therefore, the government must allocate 11 billion baht to promote healthy aging to reduce the number of elderly requiring medical services. Japanese seniors receive healthcare services through insurance purchased from health insurance companies and support from the government.

                  The health market in Japan includes 5 million elderly people requiring long-term care services, with 35% needing nursing facilities and 65% needing home care. Among the Japanese population with bank deposits of 40 million yen, 73% are aged 60 and above, indicating that more than half of the elderly in Japan are financially well-off. Thus, the elderly market in Japan is highly attractive due to their purchasing power. The elderly care business (Continuing Care Retirement Communities: CCRC) is categorized into six levels based on the elderly's ability to be self-sufficient:
1. In Home 
2. Independent Living
3. Assisted Living 
4. Alzheimer's Care 
5. Nursing Home
6. Hospice Care



Investors can choose to develop at one or multiple levels depending on their investment budget, space size, design, medical equipment, amenities, and safety for the elderly, along with a team of medical professionals, nurses, and caregivers. Thailand has an advantage in terms of location, being able to establish large healthcare facilities with good medical standards. However, the main challenge is the need for personnel who can communicate effectively in Japanese and understand Japanese culture.

                  For Thai investors looking to establish elderly care facilities for Japanese seniors, it is advisable to find Japanese partners to assist in coordinating with Japanese clients. If the goal is to have Japanese seniors stay in Thailand long-term, creating a community system that includes both Thai and Japanese residents, along with volunteer groups, can be beneficial. This is because elderly individuals still desire social interactions, conversations, and shared activities such as cooking and karaoke.