Hello guys, I am looking for recommendations and understanding of how financially it would make sense to buy or rent an apartment?
Especially given the ultra low interest rate on mortgages in Japan.
By the way I am a foreigner without a PR but looking to apply for a PR in order to be eligible to take the full value of property for a mortgage
I have heard people have differing opinions so it would make sense to see how to think through this..
5 comments
Taking part in this conversation. I also want to buy but in my case it’s 40% initial payment I can pay and 20 years of the loan. After that 2 choices: live here forever and present it to the government after I die; Leave country as an old single women selling an old unprofitable mansion for almost zero yen and buy cheap apartment in my country if I will have savings and actually a country 😅.
And also every year taxes, management etc… Idk…
it makes sense if you buy early and live a long time in your house, also if you like the freedom to change things in your house etc..for a 一軒家 but otherwise houses depreciate a lot in Japan as they are not built to last very long. I would not do it for the money alone, because there is not so much difference as rents are not very high..there should be other reasons too. I bought my house on land 20 years ago and did lots of upgrades/changes to it and no one can say anything as I own the land. if you rent the owner/fudosan have their rules etc..so that was my reason
But since you mention apartment, I would not do it as there still are many rules you have to follow, the land piece owned is very small , property taxes are high, its hard to move out and sell unless its in a super expensive in-demand great location perhaps. But again, if you are certain to remain here at the same location for the next 15 years and in the same size appartment then maybe it makes sense
Houses will indeed depreciaiton to nothing fairly quickly, but the *land* should not. Not for a while anyway. With apartments, realize that as buildings get older, maintenance costs will increase rapidly. Also note, property taxes are much higher vs for apartments.
Please take the “places depreciate”, “ apartments don’t have much land so are bad” comments with a large pinch of salt.
Apartments in a good location such as central Tokyo have done very well over the last 15+ years and have a very liquid market.
I would recommend the secondhand market and again, location, location, location.
Cheap houses and apartments will depreciate, yes. Houses custom built by good architects may increase in value over time. Most of the risks associated with buying something in Japan can be avoided by waiting a bit before you buy, saving up a large down payment, and purchasing a higher quality property.
The idea that buildings depreciate in Japan is a byproduct of the era of high speed growth in the 20th century during which houses and buildings were hastily constructed to quickly provide much needed housing. Those buildings did depreciate quickly and continue to do so. Starting in the 1990s, Showa era constructions began to be replaced by (1) better quality buildings or (2) smaller and smaller properties for single people living alone. If you are going to apply for PR and live many decades in Japan, try to buy something large enough for a family of three, even if you do not yourself plan to have a family. People build and buy one room and 1K investment properties because they have high returns at the beginning, but when they try to resell them they will have a lot of competition.