From its vibrant rural towns to its bustling metropolises, Japan is one of the great countries for foreigners to live in. Are you looking to buy a house in Japan? Keep reading this guide to understand the actual property-buying process in this country.
The Japanese Real Estate Market
The real estate market in Japan is unique. That’s because Japanese people do not build houses to last. Instead, they prefer wooden houses, which usually exist for only two or three decades. As a result, these houses depreciate in value over time. That said, the second-hand housing market in Japan is not that attractive compared to other countries.
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It is worth mentioning that houses in Japan cost less than apartments.
Japan’s Homeownership Rate
The homeownership rate in Japan stands at 60%. This rate is similar to most of the European Union countries and the United Kingdom. Per data from Statista, 88% of Japanese people aged 70 and above own houses. However, the homeownership rate in the younger population (Japanese aged below 35) is low, as only 25% of the youth own houses.
So, how do Japanese residents finance home purchases? Mortgage is the most preferred financing option.
Can Foreigners Buy Houses in Japan?
Anyone with a valid Japanese visa is allowed to buy houses, land, and apartments in Japan. Note that you can also secure a mortgage as a foreigner. However, most Japanese banks prefer issuing home loans to foreigners who plan to stay in the country for a long time.
Finding a House in Japan
Most foreigners purchase homes in Japan through real estate agents. As of November 2023, there are over 360,000 real estate agencies across Japan. Working with any of them allows you to navigate the Japanese property market smoothly. Ensure the real estate agent you choose to contract is registered with relevant authorities.
Where to Buy House in Japan
Buying a house in Tokyo
Tokyo, the capital city of Japan, hosts the most expensive houses. The average cost per square meter is ¥1,200,000. Given the high house prices, most Tokyo residents prefer to rent. That said, Tokyo’s homeownership rate is only 29%, significantly lower than the nationwide average.
Buying a House in Osaka
Osaka is the third-largest city in Japan. House prices here are lower than those charged in Yokohama and Tokyo. Expect to spend ¥325,000 per square meter. Like Tokyo residents, people in Osaka prefer renting to owning a house.
Buying a House in Nagoya
Nagoya, Japan’s fourth-biggest city, has the highest ownership rate among the three cities. This is largely attributed to cheap house prices. When buying a house in Nagoya, expect to pay ¥235,200 per square meter.
The Process of Purchasing a Home in Japan
After a real estate agent helps you to identify the house you would love to buy, you can begin the purchasing process, which involves the following steps:
Submitting an Offer
Before making an offer to the homeowner, ensure you know the average house prices within the location of the property you want to buy. This allows you to submit a reasonable offer through a letter of intent.
Receiving House Documents
If the seller accepts your offer, they will send you documents explaining everything you need to know about the house, including management fees, the type of the house, survey results, and zoning. Make sure to go through the documents with the help of a real estate agent.
Paying Deposit
To show your commitment to buying the house, the seller may ask you to pay a deposit, usually 10-20% of the property value.
Signing the Contract
In this stage, you will need to get a lawyer to interpret the terms of the contract before you sign any document.
Completing Payment
The lawyer will submit a copy of the contract to relevant authorities so that a new title deed can be generated. After a deed with your name is produced, you can transfer the remaining balance to the house seller to get access to your new home. And that’s how you become a property owner in Japan.