Kai Rivers
Housing in Japan includes modern and traditional styles, with the two most common patterns of residences being the single-family detached house and the multiple-unit building. In 2023, the homeownership rate in Japan was 60.9%, while the share of households renting dwellings and land was around 21.3%. This rate of renting is highest among households with a head aged 29 and under. Several factors influence the decision to rent or buy in Japan, including the high cost of housing in major cities, the traditional practice of living with parents until marriage, and the unique aspect of Japanese housing wherein houses are presumed to have a limited lifespan and are often torn down and rebuilt after a few decades.
| Characteristics | Values |
|---|---|
| Home ownership rate in 2023 | 60.9% |
| Total number of houses owned in 2023 | 33.9 million |
| Households renting dwellings and land in 2023 | 21.3% |
| Most common type of residence | Single-family detached house |
| Second most common type of residence | Multiple-unit building |
| Housing arrangements for unmarried people | Boarding houses, dormitories, barracks |
| Housing arrangements for young people | Shared apartments |
| Housing arrangements for foreign people | Guest Houses, also known as "Gaijin Houses" |
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What You'll Learn
Renting vs buying a home in Japan
In 2023, the home ownership rate in Japan was 60.9%, with approximately 33.9 million houses owned in the country. This figure has remained mostly flat over the past 15 years. However, the share of households renting dwellings and land in Japan in the same year stood at around 21.3%. This indicates that a significant portion of the population chooses to rent rather than own their homes.
There are several factors to consider when deciding between renting and buying a home in Japan. One important consideration is the unique aspect of Japanese housing, where houses are presumed to have a limited lifespan and are often torn down and rebuilt after a few decades. This is due to the traditional use of wood in construction, with wooden buildings typically having a lifespan of around 20 years. As such, the value of a brand-new house can decrease significantly the minute it is occupied. On the other hand, older houses may require renovations or repairs, which can be costly.
Renting can be a more flexible option, especially for those who are not planning to stay in Japan long-term. It allows individuals to live in an area that meets their needs without the commitment of a mortgage. Renting also avoids the hassle of dealing with property maintenance and repairs, which can be a significant expense for homeowners. Additionally, foreigners renting in Japan may face discrimination from landlords or real estate agents, making it difficult to secure rental properties.
However, buying a home provides more freedom and stability. Homeowners can decorate and make the place their own, which may not be possible when renting. Additionally, renting over a long period can result in spending significant amounts on something that is not owned. With a mortgage, loan payments eventually end, whereas rent payments are ongoing.
Ultimately, the decision between renting and buying a home in Japan depends on individual circumstances, preferences, and financial situations. Both options have their advantages and disadvantages, and it is essential to carefully consider the pros and cons before making a decision.
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High property prices in Japan
Japan's residential property market has seen increasing prices amidst improving demand and weakening construction activity. In January 2025, the residential property price index in the Tokyo Metropolitan Area rose by 8.14% compared to the previous year. This growth was slightly lower when adjusted for inflation at 3.95%.
Tokyo, being a major city, is an expensive place to live. The number of existing condominiums sold in Tokyo rose by 3.5% year-on-year to 37,513 units in 2024, with prices increasing by 4.4% in 2024 and 7% in 2023. Similarly, existing detached house sales increased by 7.5% in 2024, with prices rising by 3.7% in the same year.
However, it's important to note that Japan's real estate market has unique characteristics. Factors such as depopulation, high inheritance taxes, a high percentage of empty homes, and the short average life of housing stock due to regular maintenance and renovation needs to withstand frequent earthquakes and typhoons, contribute to lower prices for second-hand houses.
In contrast to the rising prices in the Tokyo Metropolitan Area, the average price of a second-hand house in this region dropped significantly from $400k in the 1990s to almost half by the early 2000s. Prices tend to decrease the further away you are from commercial centers, and Japan's efficient public transport system makes it convenient to access city amenities from more affordable locations.
While the Japanese economy grew slowly in 2024, demand for residential property in Tokyo and Osaka has been improving. The gross rental yield, which represents the return on the purchase price of a rental property before expenses, averaged 4.2% in Q1 2025, slightly lower than the previous year.
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The Japanese tradition of living with parents
In 2023, the home ownership rate in Japan was 60.9%, with the majority of ordinary Japanese households living in detached houses. However, it is a common tradition for adult children to live with their parents until they get married. This tradition stems from the traditional view that men work outside the home while women are responsible for raising the family. As a result of this dynamic, wives and children often form a stronger bond with each other than the wife does with her husband. This can lead to children becoming "spoilt", a phenomenon that is also observed in other cultures such as Italy, post-communist Central Europe, English-speaking nations, and Brazil.
In Western countries, it is more common for adult children to live independently and separately from their parents. However, in Japan, this is not always seen as a sign of financial instability as it may be in some Western cultures. For example, in English-speaking countries, the term "basement dweller" often carries negative connotations of an adult child living at home out of financial necessity. In Japan, by contrast, this arrangement is often a choice, with adult children opting to remain at home until they are ready to marry and start their own families.
This tradition of adult children living with their parents contributes to the high home ownership rates in Japan. It also reflects the strong family values and interdependence that are valued in Japanese culture. While the traditional dynamic of the father working outside the home and the mother staying at home with the children is changing with the times, the tradition of multigenerational living persists.
While Japan has a high home ownership rate, the country also faces a unique challenge with an increasing share of vacant dwellings. This is due to a shrinking and aging population, as well as rural depopulation. As a result, Japan has a large proportion of unoccupied houses available for sale or rent. This situation presents both challenges and opportunities for the Japanese housing market and contributes to the country's complex and evolving residential landscape. Approximately 21.3% of households in Japan rented dwellings and land in 2023.
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The impact of Japan's shrinking population on housing
Japan's population is shrinking and aging, and this has had a significant impact on the country's housing market. The homeownership rate in Japan in 2023 was 60.9%, with the majority of Japanese households living in detached houses. However, due to the country's shrinking population, there is an increasing number of vacant dwellings, often referred to as "Akiya". This surplus of houses has led to falling house prices, particularly in rural areas.
The relationship between housing prices and population change is asymmetric, with the decline in housing prices associated with population losses being larger than the rise in prices associated with population increases. This is due to the durability of housing structures. As a result, Japan's shrinking population has led to a decline in housing demands, particularly in suburban areas, which has caused a reduction in land prices.
The deflation of housing asset values has been projected to be approximately 94 trillion JPY by 2045, affecting nearly all municipalities except Central Tokyo. This deflation has been more acute in rural areas, and falling house prices in these regions could intensify population outflows. Policy measures to promote more even population growth across regions and avoid the oversupply of houses are critical to stabilize house prices in the face of a shrinking population.
The impact of Japan's shrinking population on the housing market has also been felt by local governments, with a list of municipalities in Japan at risk of extinction by 2040 due to population decline. This has raised concerns about the effects of population decline on housing markets and local governments. The deflation of housing assets, particularly in suburban areas, has also created new barriers to promoting compact cities.
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The different types of housing in Japan
Japan's housing market offers a blend of traditional and modern housing options. The type of housing varies across the country, from traditional townhouses in historic areas to modern skyscrapers in cities like Tokyo. Here are some of the different types of housing in Japan:
Minka (民家)
Minka refers to traditional Japanese houses, typically found in rural areas. They are constructed from natural, local materials such as wood, clay, and straw, with thatched or tiled roofs. Minka feature open floor plans, tatami mat flooring, and sliding fusuma doors, creating flexible living spaces. Many minka have been preserved as cultural heritage sites or converted into hotels, and some have been renovated as residences due to a recent popular interest in sustainable living and traditional aesthetics.
Machiya (町家)
Machiya are traditional townhouses found in the historic areas of Japan, especially in dense cities like Kyoto. Built during the Edo period for merchants and artisans, machiya have narrow fronts and deep interiors to maximise space. They feature latticework windows (komaru), tatami mat flooring, and a central hearth (irori) used for cooking and heating.
Ikodate (一戸建て)
Ikodate refers to single-family homes in Japan, which are detached houses designed to accommodate one household. These homes vary in size and style, from compact modern designs to traditional wooden structures. Ikodate are typically found in suburban areas or quieter neighbourhoods and offer more privacy and space compared to apartments.
Mansions and Apāto
Mansions and apāto (apartments) are the most common forms of housing in Japan. Mansions are concrete apartment or condominium complexes with three or more floors, often with elevators in buildings of five or more stories. Apartments, on the other hand, are usually constructed with wood and are smaller and more affordable. They can range from compact studios to larger multi-bedroom units and are commonly found in urban areas.
Share Houses
Share houses are communal living spaces with private bedrooms and shared common areas such as kitchens, bathrooms, and living rooms. They offer affordability, opportunities for social interaction and cultural exchange, and flexibility in lease terms. However, they also come with limited privacy and potential conflicts with housemates, as well as shared responsibilities for cleaning and maintenance.
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Frequently asked questions
In 2023, the home ownership rate in Japan was 60.9%.
In 2023, the share of households renting dwellings and land in Japan was around 21.3%.
Buying a home gives you more freedom to decorate and make the place your own. Additionally, you won't have to keep paying rent, which can be seen as a waste of money in the long term.
Renting provides more flexibility and avoids the hassle of maintenance and repairs. It can be a good option for those without intergenerational wealth, as buying a home requires a significant amount of capital.
Yes, traditionally, many young Japanese adults live with their parents until and sometimes even after marriage. This cultural factor may influence the decision to rent or buy a home at a later stage in life.
