- The impact of rising borrowing rate on our business -

[Impact on purchase of properties]
Our main competitors are local mid-to-small-sized real estate agents that are at a disadvantage in funding. In fact, borrowing rates to be imposed on them are usually about 2% higher than that is on listed companies. Thus we expect that rising interest rate will cause decrease of purchases by local agents due to extra repayment burden for them.

[Impact on sales of properties]
When customers consider buying houses, they first check the total amount of repayment and monthly repayment. When the interest rate is rising, some of them would give up buying newly built houses because of extra repayment burden and would shift to secondhand housing market.

When the interest rate rises by 1%, the total amount customers pay for a ￥18million property will be equivalent to that for a
￥20million property before the interest rate rise. The rising interest rate usually has a negative impact on the real estate business, however, we can say it will bring a positive impact on our business as aforesaid.