And, I think I'm ready. Well, as ready as anyone can be before the little one arrives. This new chapter has my mind racing, particularly about a question many soon-to-be parents face: Is it time to buy a home?

Don't get me wrong, I love my apartment.

For a city like Tokyo, where living spaces are famously comp…

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You might think that living in Tokyo with a family means squeezing into a tiny apartment, but the reality is that most families in and around Tokyo actually live in their own houses!

In recent years, Japan has experienced a real estate boom, and with the end of zero interest rates loomlng, many people are considering buying a home, though uncertainty about the timing remains. To address these concerns, a new book titled "The Homebuyer's Mindset" has been published this spring, offering valuable insights and guidance for prospective buyers.

In the book, Ryosuke compiles a list of the top three best bang-for-the-buck neighborhoods in Tokyo for families. I have translated and expanded on this list and added some additional information here:

Best Bang-for-the-Buck Neighborhoods in Tokyo for Families

For many, the arrival of a child or their growth is a trigger to start thinking about buying a home. This guide highlights family-friendly neighborhoods in and around Tokyo where you can find affordable housing.

Criteria for Selection:

• Budget around 50 million yen ($320,000 at the moment of writing)

• Minimum 70 square meters of living space (754 square feet)

• Less than 25 years old buildings (so they have the latest earthquake standards, because, of course, you want to protect your young ones)

• Within 10 minutes walk from a large train/subway station

• Family-friendly environment

• Convenient with commercial facilities nearby

• Less than 60 minutes to the city center

Let's explore these neighborhoods

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If you have ever considered buying property in Japan, this insightful conversation with Jarrod from the is a must-read.

Jarrod shares his comprehensive journey about purchasing and renovating a traditional Japanese house, detailing every step…

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The Tokyo housing market is red hot! In fact, it hasn’t been this hot since the bubble burst in the '90s.

A lot of you have been asking how to get in on the Tokyo property market, so I decided to do some personal research. So today, my friend and I looked at three houses in Japan, …

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What few foreigners, and even Japanese people know is that foreclosed properties in Japan can be purchased by anyone.

In fact, almost all properties that have been seized due to non-payment of mortgages or unpaid taxes will be put up for auction. Therefore, you will be able to purchase a property through an auction much cheaper than on the normal housing…

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"Is my dream apartment hiding a dark secret?”

“Was there a suicide in this seemingly perfect home?"

These are not typical questions for a house hunter, yet in Japan, they are crucial.

Enter Oshimateru (www.oshimaland.co.jp), a website where the layers of a property's past are peeled back, revealing histories connected to any deaths in the property. These…

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With 23 different wards to choose from, the apartment search in Tokyo can be a bit overwhelming. But don't worry, I got your back.

Living in this iconic city can come with a hefty price tag. Some of the city's most renowned wards, like Shibuya and …

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In the midst of a global housing crisis, the battle over affordable housing has reached a fever pitch in Western countries. As developers struggle to find available land to build on, and rents skyrocket, many are pointing fingers at the "Not in My Backyard" (NIMBY) mentality that has taken hold in communities across the United States and beyond.

However,…

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Table of Contents

1. What is UR?

2. Why UR is a Game Changer (Especially for Foreigners)

3. My UR Application Experience

4. UR Apartments You Can Get Right Now

1. What is UR?

Japan's Post-World War II period bore witness to devastating urban decay and housing shortages. Cities were heavily bombed, infrastructure was dilapidated, and there was an urgent cry for housing s…

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The haunting specter of Japan's "Lost Decade" – that prolonged period of economic stagnation the country faced in the 1990s – is being invoked again, but this time, with its gaze set squarely on Beijing. With China's housing crisis gaining momentum, there is an increasing alarm that the world's second-largest economy might be on the precipice of its own…

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Tokyu Corporation is arguably the most important company in Japan's urban development industry. Founded in 1922, this leviathan has left indelible footprints across the Japanese landscape. A conglomerate with a multifaceted business portfolio, Tokyu Corporation's influence is both wide and deep, with involvements ranging from real estate and retail to t…

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Amid a global slowdown in real estate markets, Japan's property sector has managed to maintain its strength, supported by a resilient economy and the Bank of Japan's enduring zero percent interest rate policy. Nevertheless, potential homebuyers should remain cautious while navigating this uncertain landscape.

If you are looking to buy a property to live in Japan, the main challenge lies in determining whether to invest in a condominium or a detached home. Condo prices have surged, and detached homes are gaining popularity, making it essential to weigh the financial consequences associated with both options.

In this comprehensive guide tailored for a worldwide audience, I explore the Japanese real estate market in-depth, comparing the costs and benefits of condominiums and detached homes to help you make an informed decision in a time of global market volatility.

Condos Vs. Detached Homes: Cost Comparison Beyond the Purchase Price

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While some people hold the view that real estate investments in Japan are a bad investment, the same is often true for hotter real estate markets, such as the United States.

In fact, recent increases in housing loans and falling real estate prices have sparked up the age old discussions that housing prices in the US only slightly outpace inflation over t…

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In my previous articles, I argued for why Tokyo is a top choice for domestic real estate investment in Japan, but not every area of the city is equally promising.

To maximize your chances of success, it's important to carefully select the neighborhood you invest in.

What is important when selecting an area in Tokyo is convenience and future potential. Tokyo has always been a convenient place, but since the beginning of the 2010s, there are massive redevelopment projects in various parts of the city that will increase the attractiveness and convenience of the areas substantially.

For example, the ongoing Azabudai Hills project in the heart of Roppongi will certainly increase surrounding property values. This multi-use complex will be a “city within a city” with a 330-metre office tower, two residential towers, a hotel, an international school, retail shops, restaurants and cultural facilities plus many green spaces. This, in turn, is likely to drive up asset values and reduce vacancy risks, making them particularly attractive for real estate investors.

These top ten wards in Tokyo have been carefully selected and ranked based on their potential as real estate investment destinations.

As historical price trends of real-estate often already saturated areas, I have decided to take on more qualitative criteria.

Therefore, the ranking considers these five key criteria:

1. The attractiveness of the ward as a location

2. The presence of new construction projects

3. The potential for job growth and economic development

4. The convenience of transportation

5. The availability of amenities and lifestyle attractions.

So, without further ado, here are:

Tokyo's Top 10 Wards, From Bottom to Top, With the Highest Real-Estate Growth Potential:

Disclaimer: This list is based on my own knowledge about Tokyo, conversations with real-estate agents and research papers on the topic. It is intended solely for entertainment purposes and should not be used for any other purposes, including but not limited to investment decisions.

10. Nakano Ward

• Nakano is often described as Shimokitazawa’s dirtier cousin, with tons of dingy bars, secondhand shops, and of course Nakano Broadway, one of Japan’s most famous destination otakus (hobbyists and enthusiasts, particularly those of anime and manga).

• The area is only 5 minutes away from Shinjuku station with the Chuo express train, but still enjoys some of the cheapest rents in central Tokyo due to its dingy reputation.

• Property prices are already going up, with major redevelopment of the Nakano Broadway shopping district underway, including the construction of the Nakano Central Park complex with rental housing, offices, and commercial facilities.

• Potential for increased demand for rental properties due to the growth of businesses and influx of professionals and families to the area.

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The real estate market has seen a significant increase in foreign investment since 2020, with investments surpassing ¥1 trillion for three consecutive years. This trend shows no signs of slowing down, as more and more foreign investors are drawn to the lucrative opportunities in the sector.

There are several reasons to this, but the main ones are:

1. Undervalued and politically stable market: Japan's real-estate market is attractive to foreign investors due to its undervaluation and political stability. Japan's real-estate yields, or the ratio of income obtained to real-estate prices, are generally higher than those in major overseas cities like London and New York. Additionally, Japan is considered to be a relatively safe country for real-estate investment due to its low risk of political instability and relatively low risk of disasters like earthquakes.

2. High yield: In recent years, real-estate investment strategies have increasingly focused on the monthly rental income obtained from renting out offices and residences. Rental income is more stable than real-estate prices, so this approach allows for investment in low-growth areas.

3. Cheap exchange rates: The depreciation of the Japanese yen in recent years has made Japanese assets cheaper for foreign investors. When the yen is weak, foreign investors can purchase properties in Japan at a lower cost.

Overall, foreign investors are attracted to Japan's real-estate market due to its undervaluation, political stability, high yields, and relatively cheap exchange rates.

So how can you get into investing in real-estate in Japan?

The 8 Types of Real-Estate Investments for Individuals in Japan

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Table of Content

Click on each title to go straight to that section

1. Why home-loan rates are increasing rapidly worldwide

2. Why home-loans are so cheap in Japan

   1. Most popular variable-rate morgages in Japan

   2. Most popular 26-35 years fixed-rate morgages in Japan

3. How to qualify for a Japanese home-loan as a foreigner [$]

   1. Requirements for permanent residents [$]

   2. Requirements for non-permanent residents [$]

4. Best Japanese home-loan banks for foreigners [$]

5. Best Japanese real-estate portal websites [$]

6. Conclusion

1. Why home-loan rates are increasing rapidly worldwide

The world has seen the highest inflation in decades which have pushed central banks to raise interest rates to new heights. The US central bank, the Federal Reserve, has raised its interest rates to 4% and it’s predicted to reach 4.5% in the coming months.

This has had a tremendous effect on home-loans. The interest rate on an average 30-year fixed-rate mortgage have gone from 3% to over 7% just this year. That’s a 130% increase in interest payments for new home-buyers!

In Europe, variable mortgages are more common, which means that homeowners are already getting crushed by rising interest payments.

In my home-country of Sweden, interest rates have climbed from 1% to 4% this year, meaning that the average homeowner’s interest-rate payments have increased by 300% since January (SBAB Swedish home-loan newsletter)!

In the UK, interest-rates are forecasted to rise well beyond the average household’s disposable income, which will likely result in a massive increase of personal bankruptcies.

2. Why home-loans are so cheap in Japan

While housing markets worldwide have begun to collapse, the Japanese housing-market is doing just fine.

With inflation modest compared to other nations and the economy still below pre-pandemic levels, the Bank of Japan (BOJ) has signaled that there are no plans to tweak its pledge to keep rates at current or lower levels.

Despite Japan’s ultra-low interest rate environment, fixed-rate mortgages have increased in the last 10 months, indicating that Japanese banks are not completely insular to global inflation pressures, but compared to other countries, mortgage-rates are still very low.

If you go on Japan’s No.1 home-loan website, Kakaku.com, you’ll likely cry your eyes out if have a home-loan from another country…

For morgages with variable interest-rates, you can still get rates under 0.3%!

A. Most popular variable-rate mortgages in Japan:

Even for 30-year fixed-rate morgages, the rates are ridiculously low.

B. Most popular 26-35 years fixed-rate morgages in Japan:

It seems that even long-term, Japanese banks are certain that inflation and interest rates will remain low.

3. How to qualify for a Japanese home-loan as a foreigner

In Japan, there are basically no restrictions on foreigners purchasing Japanese real estate. Importantly, taxes on real-estate are levied in the same way as Japanese nationals, and there are no taxes levied only on foreigners.

Even if you’re a foreign national and do not have permanent residency, or even if you do not have any type of visa, you can still purchase real-estate in Japan.

Therefore, with the increase in the number of foreigners working in Japan, there are more and more cases of non-Japanese nationals purchasing homes in Japan.

A. Requirements for permanent residents

When a foreign national applies for a mortgage in Japan, the bank checks various personal information including annual income and length of employment. Of all the information, the most important is whether or not the applicant has permanent residency in Japan. The reason for this is that Japanese banks have a limited ability to collect outstanding loans if the applicant returns to their own country.

If the applicant has a permanent residence visa in Japan, most Japanese banks will assume that they have the same ability to pay back their loans as Japanese nationals and offer the same interest-rates and requirements.

B. Requirements for non-permanent residents

Most banks require foreigners to have permanent residency in Japan for applying for a mortgage.

However, there are more financial institutions than ever that accept non-permanent residents. If you want to apply for a mortgage without permanent residency in Japan, the screening process will be more difficult.

These are the main points to consider:

• Years of residence: Usual requirement is that you have resided in Japan for more than 5 years.

• Minimum annual income: Most often > JPY 5 million

• Amount of down-payment: At least 20% of the property price, or more depending on your workplace and your annual income.

• Japanese language ability: You or your guarantor must be able to understand Japanese to the extent that you understand all contract details (on rare occasions, contracts can be provided in English)

As a last resort, if you do not have permanent residency and cannot get a home-loan from a Japanese bank, you can consult with a foreign non-bank or your home country bank which has a Japanese branch. However, the interest rates are likely higher than those of Japanese financial institutions, and a larger down-payment is usually required.

4. Best Japanese home-loan banks for foreigners

Below, I have listed the most foreign friendly banks for home-loans for permanent & non-permanent residents.

Prestia SMBC Trust Bank is one of Japan’s biggest banks and is known for being foreign friendly with English support both online and in some of its physical locations. The bank also offers home-loans for non-permanent residents.

Mortgage page: "Prestia SMBC Trust Bank Housing Loans" [EN]

Requirements: Permanent residents, but also foreign nationals without permanent residency (excluding short-term visitor). Foreign applicants must have a stable source of income and a minimum annual income of JPY 7 million.

Maximum loan: JPY 1 million to 100 million.

Shinsei Bank is known for being foreign friendly with English support both online and in some of its physical locations.

Mortgage page: "Power Smart Mortgage" [EN]

Requirements: Permanent residence permit. However, if you do not have a permanent residence permit you can still be accepted for a loan if your spouse is a Japanese national or permanent resident and act as a joint guarantor.

Maximum loan: JPY 5 million to 300 million.

AU Jibun Bank is the banking branch of the second largest mobile carrier in Japan, AU. The bank has the lowest variable interest rates in the industry. Sadly, the English support is very limited.

Mortgage page: “Housing Loan” [JP]

Requirements: Permanent residency.

Maximum Loan: JPY 5 million to 200 million.

ARUHI is known for its market-leading fixed-rate interest loans and is relatively friendly to foreigners.

Mortgage page: "ARUHI Super Flat Fixed-Rate" [JP]

Requirements: Permanent residency or special permanent residency.

Maximum loan: JPY 1 million yen to 80 million.

Sony Bank is digital “NEO” bank with no physical locations. The bank is known for its ease of setting up an account as a foreign national due to its relaxed application process and English online platform. For home-loans, the bank does not offer English or special treatments to foreigners.

Mortgage page: "Home Loan"[JP]

Requirements: Permanent residency.

Maximum loan: JPY 500 million to 2 million.

SBI NEOBANK is a digital “NEO” bank with no physical locations. It is known for offering some of the cheapest variable-interest rates on home loans in the industry but is severely lacking in English support.

Mortgage page: "Net-only incapacity insurance housing loan"

Requirements: A bit unclear. At the time of application, a prescribed identity verification document with a status of residence is required.

Maximum loan: JPY 1 million to 100 million.

Rakuten Bank is Japan’s biggest digital “NEO” bank with no physical locations and is relatively friendly to foreigners. If you are a customer of Rakuten’s other services, such as Rakuten Credit card, Rakuten Mobile or Rakuten Securities, you can combine the services for discounts.

Mortgage page: "Variable interest rate (with fixed rider)"[JP]

Requirements: Permanent residency. However, sometimes residents with a "Special Permanent Resident Certificate", a "Residence Card" within the period of stay, or "Alien Registration Card [Zairyu card]" can be accepted.

Maximum loan: JPY 5 million to 100 million.

5. Best Japanese real-estate portal websites

The top 5 Real-Estate websites in Japan (ranked in order of popularity):

1. suumo.jp - Japan’s biggest real-estate site. Have the biggest selection of homes, both for purchasing and renting.

2. o-uccino.jp - Very similar to Suumo, but has a somewhat different library.

3. homes.co.jp - Biggest direct competitor to Suumo, with some more filtering features and the ability to sort houses via an interactive map.

4. athome.co.jp - Modern interface with interesting filtering features, such as for surfing spots or for warehousing

5. realestate.yahoo.co.jp - Barebone real-estate portal with few options. I do not understand why people use it

The most popular English real-estate website in Japan:

https://realestate.co.jp/ - English real-estate portal connected with English speaking real-estate agents listing foreigner friendly property owners. Recommended for people who are not familiar with the Japanese real-estate market.

6. Conclusion

Japanese home-loans are still ridiculously cheap and even though getting them are cumbersome, especially if you aren’t a permanent resident here, it is definitely possible.

On top of that, the Japanese housing market has fared quite well this year despite the global fall in home-prices.

If you would like to know more about investing in Japanese real-estate, and my thoughts on investing in it, be sure to check out this article:

Konichi-Value

Should I Invest in Real Estate in Japan? Three Arguments For

This article was originally published in podcast format on June 2, 2022 (link here) Housing prices in Tokyo have risen by approximately 5% since 1992, and in almost all other areas in Japan, housing prices have fallen… The graph below shows the development of second-hand apartments in Tokyo since the Japanese asset price bubble burst in 1992…

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4 years ago · Rei Saito

This is a follow-up article to my post about how Tokyo managed to avoid an affordable housing crisis. Please read it first if you haven't already:

Konichi-Value

[Contrarian Investing] How Tokyo Avoided the Affordable Housing Crisis

Disclaimer: The information in this article represents my opinions, and should not be construed as personalized or individualized investment advice and are subject to change. *A recommendation of Japanese Real-Estate Investment Trusts (REITs) are at the bottom of this article…

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4 years ago · 1 like · 2 comments · Rei Carl Samuelsson Saito

After writing several articles on the real-estate market in Tokyo, I constantly come across the same myths.

The most prevailing myth is that Tokyo is still the same place as it was during its bubble hay-days in the 80s: The world’s most expensive city where everyone live in futuristic shoebox-sized pods that cost more than a mansion in the US.

Another myth I constantly hear is that Tokyo is a concrete jungle that is packed with massive skyscrapers.

Thanks to the researchers at the Greater London Authority Housing and Land Commission (link to their research paper HERE), I can now put these myths to rest once and for all:

Myth #1: Housing in Tokyo is Exorbitantly Expensive

Sure, rents in Tokyo are by no means cheap, especially compared to other cities in Japan. However, you got to take Tokyo for what it is: The world’s richest and most populous city (source here).

With that said, Tokyo is cheaper than most metropolises around the world:

As the graph from 2017 shows, Tokyo is substantially cheaper than New York, London & Paris. The differences in rents have only widen since then as rents have risen much faster in those cities. On top of that, the Japanese yen has been dropping substantially this year which makes the gap wider than ever.

A common counter-argument is that salaries in those cities are higher and hence, people spend a similar percentage of their income on rent. However, Tokyoites allocate around 30% of their income on rent, while 40-50% is the norm in London, Paris, and New York City (source).

The main reason for this is that Tokyo builds so much more housing than those cities:

Since 1968, Tokyo’s housing stock has grown nearly 300%. By contrast, the other three cities have converged, although the underlying growth rates vary, with London’s housing stock having grown only by 36% since 1971, New York’s by 19% since 1970 and Paris’ by 32% since 1968.

*The reason why Tokyo’s housing stock has grown so rapidly in comparison to similarly sized cities can be found here.

Myth #2: People in Tokyo live in shoebox-sized apartments

In fact, the average person in Tokyo has the same amount of floor-area as Parisians and Londoners:

On the graph above, average floor area per person has been calculated by dividing average floor area per occupied dwelling by average household size. By this measure, Paris and Tokyo have similar amounts of space per person as London, at 31 sqm, 32 sqm, and 33sqm per person respectively. Only in New York does people have more space with an average of 43 sqm in floor area. However, New Yorkers also pay far more in rent per square-meter.

Even more striking is that more people in Tokyo live in detached houses compared to apartments (30%) than in New York (16.3%) and Paris (12.3%).

Myth #3: Tokyo is a concrete jungle cramped with massive skyscrapers

Tokyo is definitely a packed city with a lot of concrete towers, but its often lower and less dense than people think. In fact, the tallest building in Tokyo is only 255 meters (not even in the top 100 of world’s tallest buildings).

In fact, Tokyo is much lower than both New York and Paris:

Perhaps even more shocking is that Tokyo is less dense than New York and Paris. Again, only Greater London is less dense than Tokyo:

Below you can see a 3D visualization of population density with London top left, New York top right, Paris bottom left, and Tokyo bottom right:

As you can see, Tokyo is dense but not especially tall, whereas especially New York and Paris are incredibly tall and dense in the city center and very flat outside.

Conclusion

I hope this article have given some more clarity about housing in Tokyo. It’s not the capital of overpriced shoebox sized dwellings that you might have thought, but instead a very livable and affordable city.

As an investor, properties in Tokyo have underperformed compared to its peers, but even this is about to change. Prices are rising steadily here compared to its peers, especially now when we’re seeing property prices decreasing in London, New York and Paris while they are still going up in Tokyo.

At the end of the day, Tokyo is cheaper and more livable than New York, Paris and London, which is attracting a lot of people and investors. I am convinced that livability will be more and more important for a continued increase in real-estate prices, which is likely why we’ve seen more and more people and investors getting attracted to the city.

As you may know, I have worked hard for a couple of weeks to produce these two articles:

Konichi-Value

Should I Invest in Real Estate in Japan? Three Arguments For

Listen now (15 min) | Housing prices in Tokyo have risen by approximately 5% since 1992, and in almost all other areas in Japan, housing prices have fallen… The graph below shows the development of second-hand apartments in Tokyo since the Japanese asset price bubble burst in 1992…

Read more

4 years ago · 5 comments · Rei Carl Samuelsson Saito

Konichi-Value

Should I Invest in Real Estate in Japan? Three Arguments Against

Listen now (14 min) | Last week, I wrote about three arguments for buying real estate in Japan (click HERE to view it). I hope you haven’t bought a house in Japan yet, because this week I will go over the top three arguments against buying real estate in Japan: Arguments Against Buying Real Estate in Japan…

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4 years ago · 2 likes · 3 comments · Rei Carl Samuelsson Saito

After publishing them, the question I got asked the most was:

“Is Japanese real-estate is a good investment?”

To tell you the truth, I'm actually super torn about this question.

When col…

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Last week, I wrote about three arguments for buying real estate in Japan.

I hope you haven’t bought a house in Japan yet, because this week I will go over the top three arguments against buying real estate in Japan:

Three arguments against buying real-estate in Japan:

1# Jap…

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