House Prices In Japan

House Prices In Japan

Dream of buying a home in Japan? The good news is that, whether you are a resident or not, anyone can purchase real estate in the country. And, with the yen at record lows against most major currencies at the time of writing, housing here is more affordable than ever to those living overseas. But the first question that likely comes to mind is: what exactly are the prices of homes like in Japan? We’ll address this very question here.

For the sake of our international audience, we will provide JPY prices with their US dollar equivalent (in fact, all Japanese property listings on my Cheap Houses Japan weekly newsletter are also in USD).

Average property prices in Japan

Every year the Japan Institute of Life Insurance publishes figures on the average prices paid for properties in the country, and these were the results for 2021:

Average Property Prices in Japan 2021

The most striking takeaway from these figures is that houses come at a lower price tag than apartments in Japan.

It is important to understand that the real estate market in Japan works a bit differently to other developed countries in some respects. Factors such as depopulation, high inheritance taxes, a high percentage of empty homes (see my article on akiya), the short average life of housing stock, and preference for/relative convenience of apartments and newer builds all feed into each other and create the conditions for lower prices for second-house houses in particular. In fact, this is why the majority of listings at Cheap Houses Japan are for this kind of property.

In the Tokyo Metropolitan Area: the average price of a second-hand house plummeted from $400k in the 90s to almost half by the early 2000s, and these prices have more or less remained at these levels. Second-hand so-called manshon apartments, on the other hand, have remained relatively buoyant (though also flat).

For example, as you will see among my recent picks for Osaka and its environs, it is even possible (though perhaps a little challenging) to find decent houses priced at around $100k (or ¥14mn) in Osaka City’s wards adjacent to the main commercial districts (versus a relatively new, 70m2 apartment in one of may be priced between $200-300k).

Location, Location, Location...

The second takeaway is that, naturally, Japanese real estate prices are dictated in large part by location.

As far as average land prices by prefecture are concerned, prices per square meter in those less urbanized prefectures (that is, those “other regions” referred to in the table above) drop to a fraction of those hosting Japan’s major cities. According to 2022 government figures, the cheapest prices are to be found in the Tohoku regions of Akita and Aomori, as well as the least populous prefecture of Tottori in western Honshu, where they fall close to the $100/m2 (or ¥13k) mark.

Generally speaking, if your heart is set on buying in one of the cities, prices will come down the further away you are from the commercial centers. It is always worth investigating options further afield, in my view, because Japan’s efficient and reliable public transport means there are usually more possibilities for enjoying what its cities have to offer without necessarily having it all on your doorstep, all the while benefiting from lower property prices!

The reality of second-hand houses in Japan

Something to bear in mind is that older second-hand houses in Japan will often require renovation of some kind to bring it up to modern living standards (and I cannot stress enough the importance of an independent home survey to avoid nasty surprises!) This usually includes insulation, retrofitting of kitchens, bathrooms and plumbing, and tatami mat replacement, and other renovations.

Kyoto Example 1 (Low End)

Let’s look at an example from Kyoto, where the real estate market has been heating up in pre-pandemic years, thanks to tourism. This more traditional, 1960s 3DK (that is, one dining/kitchen, one bathroom and three other tatami-mat rooms totalling 44m2 of floorspace) house. This house is in the pleasant, Yoshida residential area in the environs of Kyoto University, and is priced at just under $68,000 (¥9.8mn). You can tell from the pictures that while it may be liveable, the house is a little worse for wear.

In fact, some boutique realtors have gauged demand for characterful older homes in places like Kyoto and might specialize entirely in machiya traditional townhouses, even employing teams of foreign staff and undertaking renovations themselves to add value. These homes certainly come at a premium.

Kyoto Example (High End)

For example, this 3LDK/95m2 townhouse that has undergone a full, high-end renovation near the tourist hotspot of Kiyomizu Temple by one such estate agent will set you back as much as $600k (¥88mn).

Note: if the link is broken, it means the property has been sold. Here’s the listing as an image for posterity’s sake.

Finding a balance between cost and amenities in Japan’s regional cities

To experience the more traditional Japanese way of life, as well as find the best property deals without being too remote, I recommend exploring some of Japan’s smaller, regional cities.

Those of you following me will know that I opted for a second-hand house in a smaller city. I managed to find this 2DK (that is, one large bedroom, one small room, and one combined kitchen and dining room) bungalow with a renovated bathroom, spacious terrace garden and parking, for a mere 400万円 (about $27,000 at contemporary exchange rates), including all related taxes. The balance of convenience (a train station is within walking distance) and the laid-back vibe of the town, not to mention that the house itself needed very little work, was perfect for me.

Michael's House

Again, I should emphasize that to find my dream house, hundreds of hours were spent researching, including speaking with numerous estate agents—and I nabbed an unusually good deal. In fact, I would suggest stretching the budget to $40k to cover the costs associated with a property like this that comfortably accommodates two people, in a similar setting.

I go into considerable detail on this topic in my new, comprehensive e-guide, called How to Buy a House in Japan. It even includes my own invoice with a full breakdown of all the costs so you know what to expect.

The Cheap Houses Japan newsletter features listings throughout Japan to get you inspired about which areas of Japan to consider. Whether in the urban centers or most tranquil rural hamlets, every week I hand-pick 20 properties with the most potential that are priced under $100k. Get access to all property listings to date when you subscribe monthly for just $10/month, or opt for the annual subscription which includes a free copy of the e-book.