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Average condo price in Tokyo area sets new high in fiscal 2021

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Guys, for those of you who have lived here for a while it is simply incredible that you talk about buying property as an investment. We all know how it works and we all know it is not an investment. And rightly so shall I add. A house is to live in, a commodity. Not something rich people speculate on.

It is very simple math, buying and selling a property will cost you respectively 10% and 4% roughly. The insurances, the maintenance and the various ownership taxes. The house itself depreciates to half price in 10 years, and to 0 in 25 years. The only thing that hopefully keeps its value is the land it sits on. All of these are things you do not pay for if you rent. Yes you have a tax brake for 10 years but that equals out the interest rate of the mortgage you wouldn’t need if you rented. Bottom line is, unless you stay there for 25 years plus, you will lose money.

0 ( +0 / -0 )

How is the price of a normal 2 bedroom apartment in central Tokyo? I bought one 6 years ago but rental income has dropped a lot since then.

It is not new but is fully renovated so looks new inside. The fees for selling are quite high though. I guess when you buy in japan it is best to stick it out for the 35 years

0 ( +0 / -0 )

ChikuyokeiApr. 20 04:11 pm JST

Condos in Tokyo are cheaper than in Toronto!

I think so too, there is not so much difference in pricing between Tokyo and London, Paris and other major cities in Europe, Northern America, Australia ...

However Tokyo is indeed by far the most expensive city for housing in Japan, if you compare it with many other smaller cities everywhere in Japan.

We moved to Okayama City after my retirement and our centrally located condominium was maybe 70 percent cheaper compared to what you have to pay in Tokyo. Nice view to 3 directions, lot of greenery nearby, 70 m2 3LDK + 30 m2 balcony with roof. Parking lot within the building in the garage is yen 8000,- for 2 cars and for my motorcycle yen 300,-.

We were happy when we were able finally to move out of Tokyo. However for foreigners, if you have still to work, in smaller cities it is not easy to find a job.

0 ( +0 / -0 )

I live in a great western part of Tokyo. Very green, lots of space, multiple stations.

2 ( +2 / -0 )

Seriously, wako, Saitama city, Kawaguchi, all are far better far more practical than west Tokyo like Musashino, etc..

No way. I agree with many things you say but not that!

1 ( +2 / -1 )

Condos in Tokyo are cheaper than in Toronto!

Average condo price in Toronto, $740,000 CDN = ¥75,562,613.

0 ( +1 / -1 )

There are so many better cities than Tokyo in Japan! Other cities are much more cleaner, more spacious and more friendly locals! Yes, the salary in Tokyo is slightly higher than other prefectures but if you factor in the cost of living then you will definitely save more money and live in more luxury if you choose other prefectures rather than Tokyo!

-2 ( +1 / -3 )

Condominiums in Japan are to small .

Xtra small.

-1 ( +2 / -3 )

I would not buy a condo in a really highly built up place like Tokyo or Osaka due to the high earthquake risk. It’s a matter of “when” as opposed to “if”. It would be a death trap with the police and fire brigades having to deal with literally thousands of other condos to rescue people and put out fires. Also, many of these condos have monthly maintenance fees so it isn’t like you just need to pay the mortgage.

0 ( +1 / -1 )

Inflation in Japan peaked at 24.9% in February 1974, in large part due to the oil crisis. Climate change is all about fossil fuel use, so expect another oil crisis eventually. Foreigners in Japan are an atypically wealthier demographic than the locals, but what would much higher inflation figures forecast do to your mortgage repayments?

-1 ( +0 / -1 )

Happy to have bought our 2LDK condo outright in July 2020 when the prices were lower. Our monthly household expenses which includes utilities, building management fees, and property taxes total US$420 a month.

0 ( +1 / -1 )

China's system of building infrastructure first and then encouraging growth after has seemed very effective

No, it has not been effective at all. It's left them with ghost cities, and a massive construction company that is on the verge of going bust, destroying their economy.

-1 ( +3 / -4 )

I am pretty excited to be moving out of Tokyo next month, something that seems fairly difficult to do and keep a job. It is crazy how even an hour or two outside the city you are paying like half the price for something double the size.

Honestly if the government could encourage people to move out of the city more, and decentralize the country just a tiny bit, a lot of these real estate woes would be alleviated. China's system of building infrastructure first and then encouraging growth after has seemed very effective, but is by no means the only solution.

At some point, the cost of living in Tokyo is just going to be too much for anyone to handle.

-2 ( +2 / -4 )

Cash is king. Buy the land which in time is more valuable than the house. Build the home where you have control over it and don't have to worry about moving unless you want to sell. If you want to keep it you can always rent it out. In my case I purchased land built a new small home on it, I rent out the home which has two bedrooms to college students and they have pretty much paid for the cost of the land and what it cost to build. Smart money make money!

1 ( +2 / -1 )

Antiquesaving....

Please give the proof to back that up!

Just google "best place to live in Tokyo" you will get many links all with Kichijoji in the top 3. You are of course wrong about it being only the youngsters.... most popular with 30-40s. Your eastern industrial wasteland won't be mentioned.. But you are welcome to it.

0 ( +2 / -2 )

I would be worried about the big earthquake in Tokyo.

0 ( +1 / -1 )

Tokyo is sucking the life out of the rest of the country, people need to find work and Tokyo is the only city that has something for everyone, until that changes Tokyo will continue to prosper at the expense of the rest of the nation.

Its one of Japans biggest challenges isnt it. How to do regionalism better. Tokyo seems like a London on steroids. Robbing the rest of the country of people and investment. Its the same in Australia. Insane sums paid for new road construction underground and rail links in heavily congested areas of Sydney for example, when the cost would be a fraction of that in the regions. Australia does regionalism better than Japan, but its still not great.

4 ( +5 / -1 )

sorry, to add on what I said earlier, I was talking about the luxury condos they were mentioning in this article and the combined income of 10mil jpy. When they say luxury, they probably meant a condo well over 60mil jpy as 60mil jpy is pretty average now imo. Yes I do agree with the comments everyone has been giving me and thank you for your feedback! Great to hear many people doing well off for themselves and I wish you the best.

0 ( +1 / -1 )

Kichijoji is always voted in the top 3 places to live in Tokyo. 

Please give the proof to back that up!

The only people I know that like kichijoji and 20 somethings, after 30 married and especially kids no one wants to live there.

I have known a lot of Japanese that have lived there all basically during university then a few years after graduation but then forget it.

-7 ( +1 / -8 )

Antiquesaving..

Seriously, wako, Saitama city, Kawaguchi, all are far better far more practical than west Tokyo like Musashino, etc..

Kichijoji is always voted in the top 3 places to live in Tokyo. The only reasons people choose to live in Saitama are, they were from there so want to stay near their family, they work there or can't afford to live somewhere nicer.

You only have to look at the miserable faces on the Saikyo line to see the truth.

3 ( +6 / -3 )

Don’t forget that the house loan is deductable upto 1%/400,000en per year for 10-13 years. If you bought before fiscal 2022 that is. That alone saves you 4 million yen on taxes over 10 years. Also there is no property tax on the land, just the building part.

2 people making 10 million (ex. 4M and 6M) equals one person making 13 million due to higher taxes. Also if one person makes the 10M, you lose all the benefits like child allowance but the couple who make 4M+6M can collect 15000en per kid per month.

4 ( +5 / -1 )

Antiquesaving, you are right. Nagoya is about as exciting as cold miso soup.

Not that I would live in Nagoya but misokatsu and Kimble megastore are 2 of the best things in Japan. I take the 2 hours drive every few months just for those alone.

0 ( +1 / -1 )

The bullish market is supported by solid demand for luxury properties such as high-rise condos in central Tokyo and is due to rising labor and material costs.

Our area is traditionally"shitamachi" but right on the edge of Bunkyo-ku ( not in Bunkyo-ku we are not that rich).

House and condos prices in Bunkyo-ku are off the charts with a small house on a tiny pieces of land going for way over ¥100 million.

So that is pushing prices up in the adjacent wards. We are now seeing famous luxury condominium brand buildings going up just a few minutes from our place.

Smaller house and land near us going for ¥10 to ¥20 million more than what we paid for older places like ours new builds on owned land ¥30 to ¥ 40 million more,

This is just within the last 2 years.

A house new construction on a 20 year leased land ¥48 million!

¥48 on a 20 year lease piece of land! That is insane!

0 ( +3 / -3 )

This price information is useless without showing the size and location of the condo.

That's true. I strongly suspect the main price action is due to the "average" now including far more high end (or probably more accurately, far fewer low end) mansions compared to the past. We are not comparing M size eggs in 2000 with M size eggs in 2022. The current boom is in tower mansions with hotel-like lobbies, gyms etc., part of whose demographic is rich retirees being enticed back into the city after raising kids in the burbs.

2 ( +3 / -1 )

Seriously, wako, Saitama city, Kawaguchi, all are far better far more practical than west Tokyo like Musashino, etc..

I don't disagree. But I don't think west Tokyo can be described as the countryside - more of an urban mess.

0 ( +3 / -3 )

Having a combined income of just over 10 million yen is not enough to live in these condos. If you want kids, good luck paying for their tuition.

People not really bothering with kids these days.

-2 ( +1 / -3 )

 outside the 23 wards" can hardly be described as the countryside.

Are you serious?

The occasional major road usually one lane consistently blocked or slow moving, trains are far and few between!

That a guess why Saitama is up but not Kanagawa, Tokyo outside the 23 wards and Chiba.

I will give those who don't know a hint.

Multiple wide roads into a out of Tokyo easy access to highways, multiple trian lines into and out of Tokyo.

Seriously, wako, Saitama city, Kawaguchi, all are far better far more practical than west Tokyo like Musashino, etc..

-2 ( +3 / -5 )

Seems quite clear sure the country side is cheaper but the value doesn't hold!

The numbers in the articles are for new properties (I think) so it's hard to make a conclusion about values holding. Also, "Tokyo municipalities outside the 23 wards" can hardly be described as the countryside.

-2 ( +1 / -3 )

Those that keep saying it is cheaper to buy in the country side, read the article Again.

The average unit price in Tokyo's 23 central wards, despite Japan facing years of lackluster economic growth, jumped 11.7 percent

The number of new condominiums listed for sale in the Tokyo region was up 13.2 percent from a year earlier

The average unit price in Saitama rose 7.8 percent 

Now take note:

But the price in Tokyo municipalities outside the 23 wards fell 5.1 percent to 51.37 million yen, while that in Kanagawa declined 5.5 percent to 52.09 million and Chiba was down 0.5 percent.

Seems quite clear sure the country side is cheaper but the value doesn't hold!

Honestly I drive a lot due to my work, but I don't want to have to be driving still when I am too old to do it safely.

I also don't want to be spending a fortune calling cabs or spend my time checking bus schedules or when the 2 trains an hour come by.

I am less than a 2 minute walk from a tram or 5 minute walk from a good size Metro station, I am 1 minute from a convenience store 3 minutes from one supermarket, 4 minutes from another.

Once I get older I have everything including 3 hospitals all within 15 minutes walk. No countryside can offer those conveniences.

And I own.

0 ( +3 / -3 )

Couldn't pay me enough to live in Sodom by Yokohama.

Agree wouldn't live near Yokohama but I would chew my own arm off the get away from Nagoya.

If ever I want the divorce or to gety 2 adult children out of my life I know just what to do, move to Nagoya, my wife would leave me as would both my mid 20s children.

-1 ( +4 / -5 )

Antiquesaving, you are right. Nagoya is about as exciting as cold miso soup.

BUT...jobs are easy to find and pay very well. It is central to everywhere and has a good little airport.

And I pay just over 80,000 a month to rent a 4LDK with a garden about 30 minutes from downtown by car.

Couldn't pay me enough to live in Sodom by Yokohama.

1 ( +4 / -3 )

Bubble Bobble

0 ( +1 / -1 )

You couldn’t pay me to live there!

-6 ( +3 / -9 )

This price information is useless without showing the size and location of the condo.

3 ( +4 / -1 )

Prices in Tokyo are driven up by the real estate and construction companies with all that new spacious and modern condos in some popular and luxury central districts.

I live 2 hours from Tokyo and am also an owner. Prices are really affordable and even if I could afford something in Tokyo, I won't like to live there. Not a city boy.

Now at the end of the day, it is always better to be an owner but it is up to everyone finance and lifestyle (settling or not).

3 ( +4 / -1 )

zichiToday  09:37 am JST

Many Japanese houses have a short life span. About 30 years. In the end, it's the land that is of value.

While the land in Japan has more value than the house, the idea that a house in Japan has a short life span is a fallacy. The depreciation system in Japan writes down the house to nothing in 30 years, and coupled with Japan's demolish and build policy to drive the economy and construction business, this belief has become widespread. But in reality there are buyes, including quite a few foreigners, who are purchasing old kominka's that are easily 100 years old and renovating. As condo prices have risen in the cities, more and nore younger Japanese families are looking at commutablr distance suburbs, and purchaing older homes (20-50 years) and renovating.

4 ( +7 / -3 )

I'm happy paying my own mortgage and having something to show for it as opposed to paying someone else's debt. Renting is dead money.

its not only that its nearly always more expensive to rent than having a mortgage, property taxes are nearly always higher on an apartment for floor space compared to a house, then youve got parking, nearly always have to pay for parking in an rental apartment. dont be afraid to commute, I live in a semi rural area about 50minuets by car 40 minutes by bike from a Japan major city , the used homes in my area and surrounding areas are very affordable compared to the city, many Japanese commute around 1 hr to work anyways. My sister in law bought an apartment 1 minute from a train station in a major city but travels about 1hr 20miutes to work everyday!? City slickers *yes ive been a slicker myself" many think they have convenience but many times they dont. I actually have more convenience with my rural living since I dont have any traffic problems that force you to walk or take your bicycle in the city

5 ( +5 / -0 )

AttilathehungryToday  11:54 am JST

I should have guessed.

Nagoya isn't Japan it is some strange place that is anyone with a brain should avoid.

I have more to say about that place but I fear the comments I would make would be inappropriate.

-1 ( +6 / -7 )

It's better to buy a property than renting if you are planning to live here for a long time. I had rented the same property for many years because I like the place and my neighborhood. One day the landlord decided to demolish the building and I had to move out. It took me a year to find another suitable place. Although I did like some places I was told the owners preferred Japanese tenants. It was a nightmare flat hunting. Luckily the landlord paid all charges involved with my move.

6 ( +6 / -0 )

Property has been good to me-put down roots and save that rent and use the money as you wish…

4 ( +4 / -0 )

The average unit price of a new condominium in Tokyo and its surrounding areas hit a record high of 63.6 million yen in fiscal 2021,

This is not a bad price compared to a major city, such as New York.

zichiToday  09:42 am JST

By law, rental agreements are renewed every two years, and it's not easy for the owner to evict.

Completely wrong.

Rental agreements can be for one day, one week, one month, one year, or more.

And a rental agreement is a contract, and s contract is NOT automatically renewed unless it contains a renewal clause.

4 ( +5 / -1 )

I'm happy paying my own mortgage and having something to show for it as opposed to pying someone else's debt. Renting is dead money.

4 ( +6 / -2 )

The bubble price and current price also need some caution in terms of comparing affordability. Interest rates were far higher back in 1989/1990 - about 6% for an average borrower. The monthly mortgage payments would have been about double. Or in other words, all things being equal, people in the market for a 60m apartment today, would have been in the market for a 30m place during the bubble.

-1 ( +1 / -2 )

Antique; the city is Nagoya. Not a small town, not a poor place, but the house devalued just like it was a car. New is wanted far more than used in housing.

1 ( +3 / -2 )

AttilathehungryToday  11:06 am JST

I would be interested in knowing what "large city" a house value dropped ¥10 million in 5 years.

Seriously, our place has gone up,

But even then, in 90% of cases the mortgage is far lower than rent, even if the value dropped, the rent the house until the market rises.

2 doors over they did like the offers they are getting ( ok I will admit they are asking way way way to much) so they are renting out the house, ¥190,000 a month, their mortgage payment is just over ¥90,000 a month. So they can wait a long time for the price they want.

3 ( +6 / -3 )

Antique; as I said, with exceptions, property is not an investment that will pay off in Japan. Perhaps in the Tokyo area you may break even or come out a little ahead. Other areas? Not so much. Friend bought a new house here for 36 million. Divorced 5 years later, was offered 24 million for it. And this is not in the countryside, in a large city. It is a big risk.

5 ( +8 / -3 )

AttilathehungryToday  10:16 am JST

My places mortgage, taxes, insurance, etc... Plus a monthly payment into a emergency contingency account totals ¥120,000 a month (¥20,000 is just my precautions contingency money).

Rental for a place like my house would be a minimum¥170,000 a month but more likely more ( the house 2 doors down nearly identical in being rented at 190,000 a month.

That is a different of at least ¥700,000 a year and if or when we sell we will get money back.

If you spend 30 million yen, you lose the possible investment proceeds that would accrue if you invested the money instead. At 5% return, that would yield 1.5 million yen per year.

Did you forget your rent?

¥30 million is if you have that money to invest and are not paying rent.

More likely most don't have ¥30 million cash to invest and you will be paying rent to someone.

Your ¥ 1.5 million will be gone and then some in rent especially if you live in 23 wards Tokyo and have a family.

8 ( +10 / -2 )

These are newbuild condo prices and the average in the 23 wards will be high because they only put up new ones for rich folks. People of lesser means are supposed to live out, or buy a second hand one in the city itself. The article does not say what percentage of Tokyoites live in a condo bought as a newbuild. It won't be very high.

7 ( +7 / -0 )

If you choose to buy property you also have to factor in the lost opportunity cost of the money you spend on the property. If you spend 30 million yen, you lose the possible investment proceeds that would accrue if you invested the money instead. At 5% return, that would yield 1.5 million yen per year.

Plus property does not generally appreciate in value here. Some exceptions in rare neighbourhoods, but you can see by the shoddy construction values that houses are expected to be worthless after 30 or so years.

I would rather pay a modest rent and keep my finances fluid and offshore.

6 ( +8 / -2 )

zichiToday  09:42 am JST

Our last owner wanted to evict and demolish the house. The courts awarded us three years stay and a large amount of compensation. We were very happy with the results.

And it is things like this that get around and when other Foreigners go to rent we get the "No Gaijin" situation.

3 ( +11 / -8 )

zichiToday  09:42 am JST

When was this?

Laws changed some time ago to give owners more flexibility on evicting tenants.

But then why be an a... and remain?

You don't own the place the owner doesn't owe you anything.

Unless the conditions were really unreasonable, why make trouble, he or she owns the property and took the risk why do people think somehow they have some right to the property.

5 ( +9 / -4 )

SDCAToday  07:52 am JST

Having a combined income of just over 10 million yen is not enough to live in these condos. If you want kids, good luck paying for their tuition.

I can assure you my wife and my combined income is below ¥10 million.

I raised 2 children as a single father, rent in Tokyo was ¥140,000 during that time as a single Gaijin father I was limited in choices.

We now pay ¥100,000 in mortgage payments includes the 10 years fire, flood earthquake insurance. (city tax ¥70,000 a year) we do not have to pay renewal fees, worry the owner will raise the rent or not renew the lease.

If you are planning on a family, buy a nice house at a good price far more stable life than always wondering every 2 years will you need to find a new place

11 ( +13 / -2 )

This trend is completely out of control. And this is not normal in any sense. Just for comparison. the Japanese GDP growth in 1990 was around 13%(!) YOY, and the population was also increasing by about 400.000 each year. Today the Japanese GDP is hovering around 0%(!) on a 3 year average, and the population is shrinking by 600.000 each year! The current situation is fueled by speculation and free money only. It's a bubble nothing else.

Regarding last year's and this year's price growth, I would factor in the global supply problems (wood material shortage, etc) and the current war in Ukraine too. Those might have an impact on short term price changes too. But in general, the trend is out of control.

12 ( +13 / -1 )

borschtToday  09:11 am JST

We took the risk 0.68% rate.

But there is always the flat 35 mortgage from the government, it is at around 1% fixed for 35 years.

8 ( +9 / -1 )

Antique - Have you factored in the unlikely (but who knows) chance of an interest rate rise.

We bought our house and land when rates were incredibly low and made sure we were locked in at that rate.

If the bank offers a good rate, make sure it isn’t ‘floating’ The bank emphasis the rate might go down but what they’re actually thinking is: it will go up.

7 ( +7 / -0 )

we pay 130,000 yen a month rent for a beautiful Japanese style house. 30 years of rent would be 45 million vs 60 million here for a condo mentioned here and we can move any time we want.

You do realise that if you are paying that rent the owner's mortgage is in all likelihood far lower.

That house you rent is probably far lower than the ¥60 million condo in Tokyo and the mortgage would be closer to ¥100,000 the there is the simple fact that when or if you sell you get some of the mortgage payment back.

Basically rent is 100% gone you will never see that money again, but mortgage you have a good chance to get some of it back if or when you sell.

12 ( +15 / -3 )

Rent vs buy can be a complicated choice.

One advantage of buying over renting is that most mortgages come with life insurance so if you unexpectedly pass away your loan will be paid off and your family will have somewhere to live.

There is no right or wrong answer- it depends on your circumstances and preference.

8 ( +12 / -4 )

Antiquesaving:

Some people do not want to preplan their life 30 years into the future. I've lived on three continents and I would not want to preclude a fourth!

Also, if you settle down in your 30s or 40s, we pay 130,000 yen a month rent for a beautiful Japanese style house. 30 years of rent would be 45 million vs 60 million here for a condo mentioned here and we can move any time we want.

-1 ( +9 / -10 )

Averages can be a bit misleading because they are often pushed up by the very high end of the market. Medium price that your average Joe buys in the suburbs would be much better.

9 ( +9 / -0 )

Best thing we ever did was jump on the chance to buy a house in a north east Tokyo ward 5 minutes for a metro station, 7 minutes from 3 other train lines.

We own the house and land, I can say it cost us far far far less than the "average" prices mentioned above for those condos. Bought just before covid hit at the end of 2019.

Never thought we would get a house but made an offer the bank said yes to a mortgage and the rest is history.

No monthly maintenance fees, no rent, no owner or fudo-san to deal with no renewal fees.

Yes used needs a bit of work ( had the outside done at a good price during covid companies begging for work) and the inside I am doing myself.

Now before we have the "houses and condos (AKA real estate) is not a good investment in Japan" comments. It is far better to pay the bank for 30 years and have something you own than to pay someone rent for 30 years and have nothing.

If you can wrangle a loan buy something.

23 ( +24 / -1 )

@SDCA

10mill is more than enough to cover your 60mill mortgage and expenses and unless you are sending your kids to an elite private school education is quite affordable at public schools… I speak from experience, I don’t earn ¥10mil but I have a ¥60 mill loan and kids at school and I’m not even close to struggling…

1 ( +7 / -6 )

The average unit price of a new condominium in Tokyo and its surrounding areas hit a record high of 63.6 million yen in fiscal 2021, more expensive than when Japan was at the height of its bubble economy three decades ago, a research institute said Monday.

Meanwhile the LDP is still keeping inflation as a pillar of economic policy and wage gains an afterthought despite the talk of a "new capitalism".

6 ( +8 / -2 )

Having a combined income of just over 10 million yen is not enough to live in these condos. If you want kids, good luck paying for their tuition.

14 ( +17 / -3 )

Tokyo is sucking the life out of the rest of the country, people need to find work and Tokyo is the only city that has something for everyone, until that changes Tokyo will continue to prosper at the expense of the rest of the nation.

14 ( +17 / -3 )

Prices up in terms of yen, but certainly not US dollars. Just for a bit of perspective.

7 ( +9 / -2 )

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