Exploring Real Estate Investment in Japan Amid Yen Depreciation

Understanding Housing Dynamics in Japan

As the Japanese yen recently hit a record low of 160 yen to the U.S. dollar, potential investors are contemplating whether it is an opportune moment to purchase real estate in Japan. To assess this, it’s essential to understand the local housing landscape. According to a 2020 survey by Japan’s Ministry of Health, Labour, and Welfare, 65.4% of Japanese households own their homes, primarily detached family homes, while 34.6% rent, often residing in apartments. This contrasts with Taiwan, where home ownership is much higher at 78.6%. Japan’s property market has seen many phases, with the post-bubble era marked by a significant shift from the “My Home” phenomenon, characterized by high home ownership facilitated by low bank interest rates, to a resurgence in metropolitan living due to demographic changes and urban preferences.

Urban vs. Suburban: Where to Buy?

The high population density in metropolitan areas of Japan drives real estate prices up, making city living more costly and leading many young people to prefer renting in cities rather than buying in less accessible suburbs. Additionally, tax incentives for rental properties further promote this trend. Consequently, discussions at Japanese…