Purchasing a house/mansion in Kanto

11 comments

1. I was told by my real estate agent that places in Tokyo don’t lose much value for about 10 years. Currently land prices are also rising which means over a decade or two you will probably not lose too much. Land prices will keep rising in city areas due to depopulation from the country moving to the cities. Looking around my place on Suumo app and there are literally zero second homes on the market. All of the new builds near me were bought before the foundations were laid (I talked to the builder rep).

2. Land can be a reasonable enough investment, in that – in a reasoanble location – it’s unlikely to radically lose value. Tokyo at least should hold value for a while. Who knows what will happen long-term – yes, everyone knows about Japan’s demographics problem etc, but we don’t know what productivity changes may come with AI or og knows what. Or maybe Japan does fully embrace immigration (Japan has quietly made it a lot easier to live in Japan and get PR etc, and the number of foreigners working in Japan, IIRC, is at an all-time high).

   But even with that – you could just look at as a math exercise:

   Option A: Pay 100,000 a month in rent the next 30 years. At the end of 30 years, you’ll have paid Y36 million, and have no asset to call your own.

   Option B: Buy a Y30 million house, paying Y5 million down and taking out a Y25 million loan at 1.5% for 30 years. After 30 years, you will have paid Y36 million, and you own house + land.

   If your property (ie, land) is worth literally -anything- after 30 years, you’re better off buying.

   Yes, this is an over-simplification (for starters, it ignores property taxes and maintenance/upkeep that you don’t have to worry about if you’re renting).

   But in general, the point remains – the longer you stay in one place, the more beneficial it is to own vs rent.

3. I bought because I wanted a little garden, independence and a place of my own to raise my kids. We bought a 30 year old steel-frame detached house in Saitama on a fixed rate mortgage, and had it renovated (repainted the outside, moved a couple of doors/windows, new wallpaper, flooring, new bathroom and kitchen units). No regrets. We have a grapevine and a little pond in the garden. Nice neighbors, good community. We paid off the mortgage recently – mortgage rates are still crazily low here (like 0.7% *fixed rate* as compared to 7% in my native UK). Would recommend fixed rate since at sub 1% all the risk is on the up-side. Even with fixed rate you can renegotiate the mortgage later if rates move any further down.

4. People prefer apartments to houses when buying mainly because there are so many apartments to choose from and it is generally possible to find what you are looking for.

   There is a finite amount of houses for sale in the region, however, and if you are too picky or your budget is too small (the most common problem) then you may be looking a very long time and still never find what you are looking for.

5. Recently some locals and non-Japanese Asians looking to invest in properties in Tokyo has developed a strong preference for apartments simply because they are attracted to the lifestyle of living in a modern, well equipped and fully managed apartment with good location near prime stations/newly built shopping districts over a suburban house, which in turn created an image that young successful middl/high income people lives in luxury apartments and have shunned houses, but there’s nothing wrong with living in a house IMO especially if you came from a culture of house living and can handle the maintenance associated with a house.

6. I bought one on Toyoko line in Kanagawa, I won’t regret even with company housing allowance.

7. Mansion bought in super central Tokyo already appreciated close to 15m yen in 4 years. It’s 5 years now, haven’t checked latest prices.

   People here frown upon buying any sort of long term thing likely for 2 reasons.

   1. They aren’t staying long term so they can’t fathom the idea of buying a house here
   2. They can’t afford it or failed to do it at the correct time so they want you to be as miserable as them

   If you are looking to stay long term, buy a place, call it your own. Make it comfortable, do what you want with it. Don’t underestimate the value of owning something and being happy in it.

   If your question is why mansion over landed property? A big reason is because you can have large accessible space which is easy to decorate. A landed property at the same size is limited, comes with a lot of wasted space and you will have stairs to deal with.

   Personally, I am looking for a landed space and any decently built ones that I like are at least 90+ m2. A comparable amount of similar comfort living in a mansion is maybe 70m2. So if you want a specific area, the mansion will be somewhat cheaper (because it’s smaller) and it probably would come with amenities.

8. Be sure to check the safety of the location (flood, earthquake, liquifaction, tsunami, etc.). There is a government site which displays this for any address. Search ハザードマップポータルサイト to find it. I don’t think it is OK to post links here.

9. house is only frowned upon by idiots that don’t understand many many things. renting is stupid, you are basically giving money to a guy your whole life and at the end you don’t have anything to leave for your kids. own a house, own a garden, make food, have the means to protect what you have and you will always be secure when the shit hits the fan and it will sooner or later. this is most important thing if you have a family. security and freedom are priority

10. Only two reasons I prefer mansion for my future are:
    * building management takes care of maintenance
    * more convenient locations (sub-10 minute walk to stations, supermarkets, restaurants, etc.)

11. Pondering the same thing but being in early 40s wondering if it might be too late to make purchasing worthwhile. I’ll be ready to croak once everything’s paid back considering a 30 to 35 year loan.