Market Snapshot 2025
- Nationwide residential land prices rose 2.7 % in 2024.
- Floating-rate mortgages from major online lenders start at 0.179 %.
- Gross rental yields in central Tokyo average 3.4 %.
- Average monthly rent nationwide: ¥61,367; typical Tokyo studio: ¥100,000 +.
Pros & Cons of Renting
Advantages —Lower upfront cost, flexibility to relocate, no exposure to depreciation, and fewer legal/maintenance hassles.
Disadvantages —Recurring rent with no equity, annual renewals, and potential key-money (礼金) plus deposits that can total 4-6 × monthly rent.
Pros & Cons of Buying
Advantages —Lock-in historically low interests, hedge against rent inflation, and build land value over time.
Disadvantages —One-off costs (acquisition tax 3–4 %, registration, stamp duty), annual fixed-asset tax 1.4 %, and structures that officially depreciate to near-zero in ≈25 years.
Quick Break-Even Example
Buying a ¥30 million condo at 0.3 % fixed for 35 years equals ≈¥77,000/month (principal + interest) after 10 % down. Renting an equivalent unit in Tokyo averages ¥110,000/month. The break-even occurs around year 10 once taxes, repairs and opportunity cost are included.
Tips for Foreign Residents
- Keep at least 10–20 % cash for down-payment and taxes.
- Secure a
zairyucard with 3–5-year history to improve mortgage approval. - Ask lenders (Prestia, Tokyo Star Bank) for English documentation.
- Consider a fixer-upper but budget for quake-resistant retrofitting.
Decision Checklist
If you plan to stay in Japan < 5 years, prefer flexibility, or can invest excess cash elsewhere → renting often wins. If you plan > 7–10 years, value stability for family/PR status, and can handle taxes/maintenance → buying may build long-term wealth.
Need Personalised Numbers?
Book a free 30-minute consultation. Our bilingual agents will run a custom rent-vs-buy simulation for your situation.
