Land prices continue to fall in Japan amid pandemic

One positive effect of this is that buying a house remains an affordable option that people can still aspire to.

It makes me sick looking at my home country (Canada) and seeing that prices have gone so high that most young people can’t even dream of ever owning a home of their own anymore. I’m glad Japan isn’t like that.

0.4% is hardly worth mentioning! Land prices down here in many areas are higher than during the bubble!

I bought a "used" 28 year old house in Osaka last year. Despite the building itself being considered "worthless", it only took a few minor cosmetic renovations to get it perfectly livable. The total cost was around 25 million yen, which is nothing compared to the 150 million yen+ plus I would need to purchase a home of an equivalent size and location in my home city of Melbourne.

I don't care about the resale price, as my kids will inherit the land. And I can rest assured that the mortgage repayments are so low that I will never experience any mortgage stress.

In Japan's three largest metropolitan areas -- Tokyo, Osaka and Nagoya -- the average land price edged up 0.1 percent, while that of the Osaka area only saw declines.

this a typo? or are the distinguishing between Osaka Prefecture and Osaka City?

@rainyday

If you buy a new house in Kanto, it's not so affordable compared to Canada when you consider what you're getting (land size, sqm of living space, etc..). Also, the building is effectively worthless after 25 years. And if you want to sell? Be prepared to list it for one year and sell for much less than what you paid for it.

That is true, but its only part of the picture. I bought a house here 5 years ago so I am well aware of how small they are compared to average Canadian houses. And I'm aware of the fact that my house will be a tough sell and that I'll likely get less than I paid for it if I ever do due to the depreciation on the house itself. So I only bought it after being confident that I was going to be living in it long enough for the purchase to make sense.

But hey, at the end of the day I'm living in what constitutes a decent middle class house in Japan that is mine and I'm satisfied with it.

And the house (in the suburbs of Nagoya, one of the few regions with increasing prices) is insanely affordable. The combined cost of my monthly loan repayments, insurance payments and property taxes come out to significantly less than 20% of my take-home pay (and less than 15% of my gross pay). I make a decent living, but not that much, housing costs are just insanely cheap here if you buy your own place.

If I were back in Canada making the same salary, buying a house in even the suburbs of a modest sized city would eat up more than half of my income. Granted, the house would maintain its value better than my Japanese one, and I wouldn't be complaining about the lack of storage space anywhere near as much as I do now, but the burden of making those payments would probably prevent me from even buying the house in the first place.

The Japanese housing market is messed up in a lot of ways, particularly in how quickly the value of used housing depreciates, and in the fact that 99% of the stuff they build these days is just god-awful to look at, but I'll take it over what is happening in Canada right now any day.

@rainyday in Canada you don't buy a house thinking you'll have to completely reform it 30 years later

In Canada at today's prices you don't buy a house period.

I bought my house in USA in San Francisco Bay area in the 80's for USD 250,000. Everyone told me not to buy as the economy was in a downturn.

I was a consultant and travelled for my work.

In the 90's, I decided to make a move from California.

I was a big earner and had lots of money. I got tired of it.

I decided to move to Oregon where wages were half what I was getting in California but a less stressful life.

I tried selling my house for less than what I bought for and there were NO buyers.

So, I rented out my house.

In a nutshell, after all those years, the house I could not sell, is now worth around USD 2 million dollars.

@rainyday in Canada you don't buy a house thinking you'll have to completely reform it 30 years later

Property value in Japan is determined by the size of the lot, while the dwelling sitting on that lot is regarded almost as worthless. In contrast, Canada has a plentiful supply of land and homeowners upgrade the house in order to increase the value added.

@rainyday

If you buy a new house in Kanto, it's not so affordable compared to Canada when you consider what you're getting (land size, sqm of living space, etc..). Also, the building is effectively worthless after 25 years. And if you want to sell? Be prepared to list it for one year and sell for much less than what you paid for it.

Falling outside big cities. And falling because population shrinking.

The whole building, housing and land development business is one big bubble here. A 30-year-old house? Practically worthless and fit for demolition. Apartments selling for ridiculously low prices in houses over 30 years old. Land value here is only determined by the fact that it is constantly being built and demolished in one place. On paper, then, the land value looks high, but if you wanted to sell, you'd never get there.

we spent close to 10,000,000 yen to make improvements, including installing solar panels, and a 10kw generator/battery as well, not to mention a new "system kitchen", a new bathroom, and install hardwood floors in all the rooms, after removing all the tatami mats.

From the outside it looks like a regular Japanese house, but inside much different.

We did the same. At our budget, any new house would have been a cookie cutter and would look tired and worn after 10 years. Instead we opted to do just the necessary maintenance on the outside (wider drive, painting, etc.) and spent the money redoing the inside. Removing a couple walls, getting rid of the tatami, raising door heights and installing a spacious new kitchen and unit bath. From the outside, just another old house. But inside, it's comfortable and it has the character that a new cookie-cutter house would have lacked.

Recently, a couple new neighbors have done the same - so it seems to be an idea that's catching on. If the foundation and frame of a house are still good, there's no reason to tear it down.

I bought a 20yr old building in 2016, steel reinforced concrete totally tiled on the outside, 440m2, 3 floors new price in 1995 land 20million yen, building 80million. With the normal city water they also installed a well/bore. well is used for the laundry, baths, toilets, garden, pool in the backyard. city water for cooking drinking etc. Its an understatement the previous owner were wealthy and because the building was big difficult to sell for the price they were asking

we basically stole it for 26million spent 5 million on interior refurbishments roof ^ balconies x5 relining. so basically a new home/business for 31million, cheaper than most small new homes in Japan.

Do you want to buy expensive house/apartment with mortgages that you have to work all your life or buy small land at countryside and build small house without mortgage and stay part-time?

Around 2010 in my country, average plot was around yen 500000, now it's yen 9200000. Many people became rich without working hard and look down upon neighbor who didn't buy at that time. it's just not fair.

MatejToday  10:38 am JST

This is Japan not Canada and the chances you 28 year old home in Canada would withstand an earthquake or Typhoon ( possible exception are some homes in Atlantic Canada built to resist hurricanes.)

The structural upgrades that would be needed to reinforce an older home in Japan is not something most can do on their own.

I have worked in construction in both Canada and Japan.

Yes older homes in Canada are solidly built compared to Japan and that is precisely the problem.

Those nice solid brick, stone etc... buildings would crack in a mid size earthquake and collapse in any strong one.

I bought a 20yr old building in 2016, steel reinforced concrete totally tiled on the outside, 440m2, 3 floors new price in 1995 land 20million yen, building 80million. With the normal city water they also installed a well/bore. well is used for the laundry, baths, toilets, garden, pool in the backyard. city water for cooking drinking etc. Its an understatement the previous owner were wealthy and because the building was big difficult to sell for the price they were asking

we basically stole it for 26million spent 5 million on interior refurbishments roof ^ balconies x5 relining. so basically a new home/business for 31million, cheaper than most small new homes in Japan.

I do envy you for having 440 sqm of space, our house is a fraction of that, nicely done there.

There are certainly a lot of steals on used houses to be found here thanks to the stupid way the market depreciates the value of houses regardless of how sturdy or well maintained they are. My house was 10 years old when we bought it and we picked it up at a pretty sizeable discount compared to what the original owner paid despite it having been very well maintained and completely renovated just before we moved in. If we had to buy a completely new house on the same budget we would have ended up with a much much worse house.

In Canada at today's prices you don't buy a house period.

@Rainyday - If you think that's bad, try buying a house in Los Angeles. Even in the bad neighborhoods, housing prices are almost impossible, unless you're okay with living with gang members (the crips and the bloods).

@Rainyday - If you think that's bad, try buying a house in Los Angeles. Even in the bad neighborhoods, housing prices are almost impossible, unless you're okay with living with gang members (the crips and the bloods).

Oh yeah, I would never in a million years want to buy a place in LA. But I think LA has always been crazy expensive, its kind of a new thing in Canada.

Like when I first moved to Japan about 20 years ago, houses in Canada were in general a much better deal than they were in Japan - you'd get more house for less money. Now, you still get more house but you pay several times more than what you would for a place in Japan. Its a weird reversal.

houses in Canada were in general a much better deal than they were in Japan - you'd get more house for less money. Now, you still get more house but you pay several times more than what you would for a place in Japan. Its a weird reversal.

same in Australia NZ its basically the Chinese that did it, many wealthy chinese buying up homes as investments and not even living in them. While this has been restricted considerable over the last few years the prices arent seeing declines anytime soon.

Homes in Japan arents investments, theyre depreciating assets even land doesn't see enough appreciation to warrant investing in it, unless youre actually living or working on it

I maximum doubt that we are really talking of buying land or a house. I am quite sure in the very most cases we talk about buying a loan at the bank , giving the land and / or house to them and then you are only generously allowed to use the land or house until and while it is paid completely and with all additional interest rates. So don’t mimic the big land or house owners here…lol

What are you, like 9 years old or something?

Where is this? Japan or another country?

In Japan, about 50min from Osaka, semi rural well I call it semi rural because theres still about 70k people living in my area, crazy thing is Im 5 minutes from a Aeon shopping center 3 supermarkets and the local ward office , post office and my accountant, parking and driving around is free and easy,

I actually have more convenience in my new area compared to when I was living in the city. lol

Population decline means cheaper land, giving respite to younger generations seeking to own their own house.

It seems a very necessary chapter in the book of capitalism if you ask me.

YukijinToday  08:17 am JST

Population decline means cheaper land, giving respite to younger generations seeking to own their own house.

It seems a very necessary chapter in the book of capitalism if you ask me.

Well yes and know,

Population decline in other countries has lead to low low prices outside the Major urban areas.

But lead to very high prices in major urban zones as both the youth and elderly want to be closer to public transport, hospitals, office, etc...

Be very careful if you buy a cosmetically appealing used house and make sure it can withstand an earthquake.

This is really good advice. Yes, you can get a great-looking house in some places for under 10 million yen, but the biggest problem will be earthquake resistance. If the foundations are okay, replacing big sections of drywall with plywood or other structural board might be enough. Check with a structural engineer to be sure.

Regarding land prices and the pandemic, the overall trend is still down, but social distancing will mean a slight uptick in demand for land for houses and the opposite for apartments. Japan did not have a lockdown, so this trend is much weaker than in countries that couped up people at home. In those, having a garden made it much easier for some.

I do envy you for having 440 sqm of space, our house is a fraction of that, nicely done there.

There are certainly a lot of steals on used houses to be found here thanks to the stupid way the market depreciates the value of houses regardless of how sturdy or well maintained they are.

actually we weren't looking for something this big, trick is to take your time, we were looking for almost 2 years, saw many buildings and homes that were good, but I needed enough space to live in and run my business. Dont even think about getting something in the city, we live in a semi-rural area about 1hr from Osaka by car 45m by bike. still around 70k people live here. came close to buying a similar sized building but fell through due to some land access problems. we saw our building advertised for over a year but its size scared most people off and developers were about the only ones interested in buying it cheap and converting it into apartments.

As soon as we saw it knew I had to have it even if I had to pay 30mil for it. Owner was an old rich lady who also lived in it and brought up her kids in it as a business/home, husband died 10 yrs earlier. she wanted another family/business to live in it also which is exactly who we were. Funny thing the old lady now lives in another of her 4 building she owns in the area and is also our neighbour, lovely lady

the thing is even if I had to work in Osaka id happily commute by bike/car there each day, once youve had the space and freedom of movement of living in a rural areas its really hard to go back to city living

The houses depreciate in every country if they are not maintained. It’s normal to put in new roofing after 15 years, replace the windows, improve the heating system etc. But in Japan, nobody does any maintenance until they demolish the whole house to re-doit. But low mortgage rates allowed us also to double the space with lower monthly cost (including property taxes) than renting.

Ive considered buying land and building a house here in Japan but i fail to see any benefits over renting. I’m paying ¥45,000/mo for a nice house with lots of parking, a shed, and a garden. If their are any problems the landlord resolves them immediately and the owner gave us permission to do anything we choose inside and out. I’m guessing my yearly rent may be comparable to a home owners property taxes and insurance alone, without considering any repairs they’ll need to pay for, or their mortgage. The money I save goes into investments that appreciate nicely and will allow us to retire early.

If you are renting a house for only 45k per month, it likely has an extremely low market value and could likely be purchased quite cheaply, probably for loan repayments well under that amount on a 30 year loan. Property taxes on a place that cheap would likely be under 5,000 Yen per month, and insurance would be similarily cheap.

Sounds like you have a good deal going there, so I’m not saying you would be better off buying, but for most people provided they want to stay long term buying is way cheaper than renting.

Property value in Japan is determined by the size of the lot, while the dwelling sitting on that lot is regarded almost as worthless.

I can attest to this! Our property taxes, after a small decrease over a decade ago, have been steadily increasing year by year.

At one time, our land value for one of our plots of land, 100 tsubo, dropped to around 160,000 per tsubo, now it is pushing 300,000 yen, and our house is "valued" at close to 2,000,000 yen, even though we spent close to 10,000,000 yen to make improvements, including installing solar panels, and a 10kw generator/battery as well, not to mention a new "system kitchen", a new bathroom, and install hardwood floors in all the rooms, after removing all the tatami mats.

From the outside it looks like a regular Japanese house, but inside much different.

Another plot of over 200 tsubo, has over tripled in price from under 90,000 yen per tsubo to over 300,000 per tsubo.

At reading the tittle I was like "Really!!!"

Then I kept reading and realised "Ok not Tokyo".

We bought our place just before covid started late 2019, it is 5 minutes from one metro station and within 7 minutes from 3 other stations on different lines.

We have had nothing but people coming by offering far more than we paid for our house.

No way we are selling as even with a nice profit there is no way we could buy another comparable place in Tokyo.

One station over they just sold a 12 tsubo piece of land with a tiny 2 floor house to be built at over ¥40 million.

It's not a house it is a dollhouse and the stairs is more closely a ladder!

Ok it is 8 minutes from a station with many different train lines, but still 12 stubo ( note some wards in Tokyo like mine have a restriction on land size to build on but not that ward).

In Tokyo, I look regularly.

Some older houses sit a long time on the market as do some new constructions.

What doesn't sit and are gone within a few days of listing are what the Japanese call "Double kitchen" ( what I have).

If close to a station and it is basically ba multi floor home with a separate apartment with full kitchen and full size bath for the parents/grandparents, the asking price is whatever you want ( within reason).

Basically a multi generation home but with clear distinction in living space between the 2 generation.

They built 3 new home recently on my street, 2 sat a long time before being sold the other considerably more expensive went the first week, it was the only one that had the double Kitchen.

land prices falling is good news for the average citizens. Anyone who want to start a family would one day want to own their own land and build a house. Is not bad if the prices fall.

And I can rest assured that the mortgage repayments are so low that I will never experience any mortgage stress.

totally agree cant understand why people even rent with the mortgage rates being so low.

my Mortgage on my 440m2 building is less than what the average family would pay on rent for a 2LDK in the city.

HiroToday  11:54 am JST

land prices falling is good news for the average citizens. Anyone who want to start a family would one day want to own their own land and build a house. Is not bad if the prices fall

Except their not falling in the places people want to live.

Most of my Japanese friends have tired of commuting into Tokyo for work from Saitama and Chiba.

They have reached the age where they need to take care of their parents and teenage children.

The solution is "double Kitchen" house.

Some have the benefit of parents land and renovating our building an new home.

Others are just trying desperately to find a good used home either already "double kitchen" like my place or that can easily be converted into one.

I have friends and family that own land outside Tokyo they can't even give away.

Here in my North Tokyo ward, take a walk around and nearly ever second or third home is now a "double kitchen" the 3 houses right nextdoor have or are presently being converted to "double kitchen" as the elderly owners are going to have their children and grandchildren living in one section of the house with fully separate living space.

Hey what's with the down votes?

I asked a simple question of wtfjapanToday  11:47 am JST

Is the place they bought in Japan or not.

People are strange.

Except their not falling in the places people want to live.

Most of my Japanese friends have tired of commuting into Tokyo for work from Saitama and Chiba.

They have reached the age where they need to take care of their parents and teenage children.

The solution is "double Kitchen" house.

Some have the benefit of parents land and renovating our building an new home.

Others are just trying desperately to find a good used home either already "double kitchen" like my place or that can easily be converted into one.

I have friends and family that own land outside Tokyo they can't even give away.

Here in my North Tokyo ward, take a walk around and nearly ever second or third home is now a "double kitchen" the 3 houses right nextdoor have or are presently being converted to "double kitchen" as the elderly owners are going to have their children and grandchildren living in one section of the house with fully separate living space.

I think this is mainly a Kanto area thing, the housing market outside of that region (which accounts for 75% of the population of Japan) is way different. Nobody has to worry about 2 hour commutes in any other region - even in Osaka and Nagoya you can easily find affordable houses within an hour commute of downtown. Double kitchen places are pretty rare outside of Tokyo for that reason - the overcrowding isn't anywhere near bad enough to warrant it.

rainydayToday  12:36 pm JST

From the article:

In Japan's three largest metropolitan areas -- Tokyo, Osaka and Nagoya -- the average land price edged up 0.1 percent,

And seeing commercial land prices have dropped (especially Osaka) this shows clearly that demand in metropolitan areas not just in Tokyo is still high.

The article is weak on details but is the numbers are like the past few years, Demand for single homes within major cities across the country has not declined.

Many predict things will get worse.

We are seeing train service being cut or reduced in many formerly busy commuter suburbs as population declines, prompting more to exit those areas.

My wife's aunt's place in China now only has train service during morning and night commuter hours and only one train and hour the rest of the day when they used to have 4 trains and hour.

And seeing commercial land prices have dropped (especially Osaka) this shows clearly that demand in metropolitan areas not just in Tokyo is still high.

The article is weak on details but is the numbers are like the past few years, Demand for single homes within major cities across the country has not declined.

Yes I'm not disagreeing with what you wrote, but rather just pointing out that there are significant differences between the Kanto region and other regional centres. Even if demand is high enough here in Nagoya to maintain or even slightly increase residential housing prices, for example, its still a much less densely crowded region than Tokyo and with a housing supply that was much cheaper to begin with and so you can still buy affordable houses in (reasonably) close proximity to the city centre. As a result, I'm not seeing anything similar to what you are describing in Tokyo (houses being converted to two kitchen places in large numbers, houses selling quickly, etc) happen here.

We are seeing train service being cut or reduced in many formerly busy commuter suburbs as population declines, prompting more to exit those areas.

We aren't really seeing this in commuter suburbs in the Tokai region, probably because those areas are a lot closer to Nagoya than the outer suburbs in Kanto are to Tokyo. But if you go further out into Gifu and Mie prefectures (slightly outside the Nagoya metro region) it is a similar story.

same in Australia NZ its basically the Chinese that did it, many wealthy chinese buying up homes as investments and not even living in them. While this has been restricted considerable over the last few years the prices arent seeing declines anytime soon.

In my hometown neighborhood, there are some laws against this, along with laws about tearing down and rebuilding with certain kinds of houses. For the most part, the house has to coincide with the community style and no "mini mansions" allowed there.

I was renting a small, single-story house (43 square metres) in rural Kyushu for only 37,000 yen/month. It had been upgraded with new flooring, toilet and air conditioner. If my employment were more stable I would have looked into purchasing it from the landlord, but jobs are very difficult to find in rural Kyushu...everyone is moving north to Fukuoka City. I wonder if land prices are falling there?

I maximum doubt that we are really talking of buying land or a house. I am quite sure in the very most cases we talk about buying a loan at the bank , giving the land and / or house to them and then you are only generously allowed to use the land or house until and while it is paid completely and with all additional interest rates. So don’t mimic the big land or house owners here…lol

back to ECC

-It’s normal to put in new roofing after 15 years, replace the windows, improve the heating system etc.

Not in the UK it's not. With lower levels of disposable income and too many cowboy builders, most people only fix their roof when it starts to fall apart. Many homes will have the same roof they were built with, in many cases 50+ years previously. Updated builder's regs also come into play. When a piece of my boiler failed that was no longer readily obtainable, builder's regs for a new boiler would have required the replacement of the gas pipes that ran behind the fitted kitchen with a different size. It would have cost a fortune and been a massive hassle. Instead, a boiler engineer plumbed a replacement part outside the original boiler, rather like having an artificial heart outside your body. It looks Heath-Robinson, but has worked fine for years now. The boiler itself is decades old, regularly maintained and only needs fixing when bits wear out naturally over time. Modern boilers don't last anything like as long.

Ive considered buying land and building a house here in Japan but i fail to see any benefits over renting. I’m paying ¥45,000/mo for a nice house with lots of parking, a shed, and a garden. If their are any problems the landlord resolves them immediately and the owner gave us permission to do anything we choose inside and out. I’m guessing my yearly rent may be comparable to a home owners property taxes and insurance alone, without considering any repairs they’ll need to pay for, or their mortgage. The money I save goes into investments that appreciate nicely and will allow us to retire early.

double kitchen

Never heard this before. Is it the same as an island kitchen?

Anyway, anyone reading this looking for housing ideas there’s always the Japanese Govt. auction site. “Bitt??????” something, sorry can’t remember, but that’s what we used. No, you can’t walk through the house so it is a roll of the dice. And we payed for it with years of unknown cat damage . But we persevered.

Just put the base frame down for our island kitchen a few days ago.

Double kitchen? In laws living with you in their old age?

No thank you. An exceedingly bad idea!

There are old folks homes for that.

wtfjapanToday  11:47 am JST

Where is this? Japan or another country?

I maximum doubt that we are really talking of buying land or a house. I am quite sure in the very most cases we talk about buying a loan at the bank , giving the land and / or house to them and then you are only generously allowed to use the land or house until and while it is paid completely and with all additional interest rates. So don’t mimic the big land or house owners here…lol

@rainyday in Canada you don't buy a house thinking you'll have to completely reform it 30 years late

In Canada you buy a house thinking what is the best room to commit suicide in