Big smile after 2 months of struggle to find a decent place for Musa and his little bro. Wish us luck with the moving and start of a new living!

House kessai (決裁) on Oct 29. 2018

My reviews about the process of buying house in Japan:

(1) Is it worth buying a house in Tokyo, Japan and how does it compare with paying a rent?

Screenshot of my

I landed myself, my wife and a 1-year old son in Tokyo in October 2016. We moved there as I signed up for a job as an engineer. My income was quite average for an automotive engineer in their 30s.

As a Gaijin (foreigner) family, it was a lot of struggle to find a decent place to rent to live. Beside Japan’s extremely fair and open market for rents (e.g. in Tokyo, some 99% of available rooms are listed on 3-4 major websites), few landlords would accept Gaijin and based on my personal observation, the figure for those “Gaijin friendly” Japanese landlord is somewhere close to 1 out of 10. However, we were glad that we found one and we have stayed there for 2 years.

After almost 2 years, when the housing contract in Japan usually needs to be renewed, we thought that we need a bigger space for us and a newly expected family member. This time, I faced again the same struggle as before to find a new place, and at one point I just could not hold myself any longer: Japan, I am buying your land.

I have known that Japan interest rate is extremely low, and at the time of this writing, one could expect a housing loan APR of 1 percent or less. With the expected loan term of 35 years, basically the monthly payment for a housing loan will be very similar, if not cheaper, than having to pay a monthly rent. And hey, I still get to attain the ownership of the house.

What if I need to sell the house? I was assured that Japan has a fair and efficient system to trade a house. Basically just leave it to an agent and pay them fee. I have heard the average time to sell an apartment is 2-3 months, while a landed house might take longer.

below is the simplified math how I could afford to buy a house in Tokyo.

– Monthly housing budget: 130,000 JPY (~1100 USD)

I use below website for calculation (disregard the currency). Assuming 35 year loan with 1.0% APR, turned out I could afford a housing loan up to around 45 mil. JPY (~400k USD)

How Much Loan Can I Afford?

As a background, I live in Ota ward in Tokyo, close to vibrant Kamata area and Tokyo Haneda airport. With that amount of money, I found that I could still afford a small 3-floor landed house in my area. I ended up buying a used 3 bed room apartment, which if only I had to rent it, it would cost me 150,000 JPY or more per month.

So, in short, yes it is still worth buying a house or apartment in Tokyo (well, certain areas in Tokyo are so da*n expensive though, that may not well worth it).

(2) How much does it cost to buy a house in Tokyo, Japan? How could foreigners afford it?

(3) How can foreigners secure a housing loan or mortgage in Japan?

(4) What is the process of buying a house and getting a housing loan in Japan?

Related post on my FB about this topic:

My early thought about this matter

Move further for this choice