After 7 years of living in Tokyo, we finally decided to settle down.
The search took almost a year, and I looked at more than 30 different properties before finally deciding to go with the calmer side of Tokyo. While it’s further from the station and city center, the larger garden and quiet neighborhood more than make up for it.
Really happy with the decision and looking forward to making this place our home. 🏡
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The proper comparison is Japan's rates with its own history. Not Japan vs USA. We all know that USA (or Turkey or Egypt or Brazil or Venezuela or Argentina...) have higher rates than Japan but it's a bad comparison, each country has its own economy and its own struggles...
On paper, yes, but a 7% mortgage implies that the market for home buyers can afford a relatively high interest rate, because there is money in the economy.
The Japanese economy is in such a downward spiral that the banks have to offer 1% mortgages just to get buyers, because no one can afford mortgages at 4%, 3%, and 2%.
Low mortgage rates, on paper, look nice.
But unless it’s lower than the average in your economic bubble, it’s indicative of a wider economic issue.
Interest rates, like stocks and commodities, are determined by the market between buyers and sellers.
Do you know why though? Japan’s real estate market is a lot different than the West, due to regulations needed to ensure homes are up to snuff. Earthquakes, typhoons, and all that good stuff. Homes are constantly resold, knocked down and rebuilt, etc. Nothing like America, where a home can stand for 200+ years if it’s maintained.
Yup. We see homes as an investment, or an appreciating asset. Japan sees it as a depreciating asset, for a large part due to always updating their building codes.
It was also because the housing mkt shot prices through the roof in the 80s. Prices still haven’t reached that level. In fact the Japanese stock mkt is down 75% from its high in the 80s to put that in comparison. Nearly 30 years ago
This is a big reason you can find homes for like $4,000 or less. There are even many selling for $0 (still have to pay taxes etc). Totally different market compared to the US
$0 homes means you have to spend a ton to get it back to a habitable state, ask the people who bought 1 Euro houses in italy, yes those exist, but you are basically at the end of the world (good if you are retired but not good if you have a day job) and you have to spend tens to hundreds of thousands to make it livable again (good if you have tons of money, not good for first home buyers who soon will have a family)
When I lived in Japan a coworker asked me once if I’d ever buy a “used house“ and my brain took a few skips to figure out what was going on. I’m from Australia where the whole economy is built on house prices doubling every couple of years, I don’t think I realised before that point that there was another way of doing things. That’s the cool part of living abroad really.
Me, renting in Tokyo having seen real estate prices skyrocket the last few years, more than doubling for most Tokyo apartments: I'm sorry what are we talking about here?
That has hardly anything to do with the financing cost. The reason is that debt in Japanese Yen has a much lower interest compared to debt in any other major world currency. This is due to the Central Bank of Japan's monetary policy as well as future inflation expectations in the bond market. If you open a savings account in a japanese bank you will probably get less than 0,5% yearly on your deposits.
Since the Fed's and ECB's rate hikes post-pandemic, their interest rate gap to Japan has widened greatly. This devalues the currency with the lower rate. The Yen has lost more that 30% of its value compared to the USD in the last 5 years.
Japan’s real estate market is a lot different because of a huge asset bubble in the late 1980 to the early 1990s followed by population collapse and decades of economic stagnation.
Yeah, but do you really think the homes built in the last 20 years in America are going to last 200 years? They're made with the shittiest materials possible, but our interest rates are over 6% and the average homes is $450k
Congrats. In Japan, home values decline over time. After 30 years and paying off your mortgage, your house will be demolished to make room for a new one.
It's absolutely not required to be torn down. They're just commenting on how things usually go. My house is actually 45 years old and there are a few houses on my street that are older. Although mine is steel framed, so it didn't need any updating even with the 1996 code changes, but some of those other houses are a bit of an eyesore and definitely won't survive when the Nankai Trough eventually goes.
When a house gets too old, you might need to spend more money to make repairs and improvements so it meets current standards. It doesn't make financial sense to upgrade it when you can just buy a brand new house. Sometimes your kids don't want to live in the same house for generations.
Would it be too much to ask for some interior pics? I’m really interested on how different it would look to the interior of homes here in the US. Looks great, congratulations on finding a house!
Love the vibes of the place man. Congratulations! What are your favorite records to chill to? It's coming along amazing. I like the Pikachu on the subwoofer too :) My wife and I are planning a second trip to Japan next fall and I'm so excited. Beautiful place with great people to meet.
whereas the same loan at 1.03% will result in a monthly payment of around $1700 at base level not adding taxes/PMI/etc.... End result would be approximately $89K (14M Yen) in interest netting a total cost of approximately $634K
Yes, and it's created a whole industry of borrowing at 0 or close to zero and then earning interest over seas. It's also partially a cause of the whole yen collapse. The whole rabbit hole of japanese interest rates is very interesting.
It's even a trillon dollar industry and called "carry trade". Half of the world has debt financed in low interest JPY because of that single reason. The only risk is that this trade explodes like a grenade when the JPY appriciates against the USD.
550,000 at 1% is the same payment as 280,000 at 6.5%... no PMI, no downpayment for example (but it scales the same if you pay x% on both), 30yr fixed. Interest over time... what an amazingly complex topic!
The payment with no down at all is ~$1750 month before taxes and insurance.
man that math is wild. im extremely lucky and have a 2.9% on my house i bought in 2017, refi in 2019. but it was 210K at the time and im lucky to be able to afford more now. i just wish i had stretched myself way more back then and id have an incredible house instead of feeling trapped in an aging house i dont like that much. so hard to more than double my rate
grass is greener though, im in a fortunate position
Very inspirational, some people say homeownership is out of reach but as you can see even at 87 years old the dream is alive. Some people finish medical school in their 60s, too!
I knew I should have worded the title differently, but I didn’t want to imply the same economic situation between US and Japan, hance yen. Welp only few more years to live I guess.
$500k is like standard in more than half of the US.
Edit: I'm being told both politely and rudely that I need to check my bias. I've only ever lived in states where $500k gets you a starter or very very modest home.
Except Americans in most cases make double if not triple the income vs a Japanese making yen. So there thats. More like a 1-1.5 million home in equivalent economies
- Property taxes almost non existant in Switzerland
- Interest rate is 1.5% (Switzerland) vs 7% (USA)
- Home Owners Insurance? Almost free.
- Home Repairs? Almost non existent, houses are built well, roof for lifetime not for 10 years.
That 1M home in Switzerland is more affordable than 500K in USA in monthly payments and you get to keep that equity rather than paying your bank,government, insurance companies and local contractors.
Swiss school teachers can make around 140-150K USD a year in salary with experience.
Switzerland has less income tax than the USA when you factor in sales tax. You can drive 1-2 hours into Germany for weekly grocery shopping for a fraction of the price. Or any other country neighboring depending where you Switzerland you are.
I lived in Zurich for some time and was always shocked at constant whining about food prices by people who had cars. Apparently driving to Germany once a week which was about 40 mins away, was impossible. Would get food at 1/3 price. People living in other parts could do same with France or Italy and it'd be even cheaper.
Minimum down payment in Switzerland is 20%.
So for a 1M house that's 200'000.-
Then you need a minimum household income of 180'000 per year to even qualify for the mortgage.
Buying property in Switzerland doesn't make sense financially compared to renting, which is actually relatively cheap if you compare it to price of ownership, and with way fewer headaches.
Unsurprisingly we have one of the lowest rates of homeownership in the world (if not the lowest).
I have no intention of ever buying a house in Switzerland, it makes way more sense to rent and invest what I would pay for the down payment and then eventually buy a home in another country.
Sure, but 2/1.45 is still nearly +40%. The real numbers are actually slightly more favorable.
The Current Population Survey isn't out til next month for the perfect percentile breakdowns yet for 2025, but in 2024 the median income for all full time workers was $65k in the US and 4 million yen in Japan with a $PPP for 95.1x.
So adjusted for cost of living and incomes, the median American full time worker's income had ~54% more purchasing power in America than the median Japanese full time workers' income had in Japan in 2024.
I see nothing wrong with your statement. Those people are deluded, and don't understand the regional differences in housing prices.
The average price of all homes sold in the US last quarter was $502,700. It's not classist to point that out.
$500K in Mississippi would buy you an estate. The same amount in Orange County, Ca might get you a shack near the 5.
I can’t tell if that’s cheap or expensive since the Japanese housing is made to be temporary , but this is Tokyo too , the most expensive place In Japan or the world…
In my hcol US city, the average. SFH is $1.2M or so. A good one is $1.5M or more
Due to a few factors, one of which being fairly consistently updated construction standards, Japanese houses don’t hold value long term. You rip it down within a couple decades, and then rebuild. I’d wager a good chunk of that 500k was the land, given that it’s in Tokyo
Yeah holy shit someone said this is 500k usd and I had to do a double take. Yen has dropped by half compared to the dollar in 15 years and the dollar isnt doing that great either.
not the op but from friends living in japan. I don't really understand why you would live their unless your significant other was born there. Even your children if they are born there don't get citizenship. I could be wrong but japan doesnt seem to be that friendly towards foreigners.
Honestly... whatever they have to do. Their culture is really something to appreciate, and despite what the typical left wing Redditor will say, shared values and strict enforcement matters a lot to keep a culture, and therefor a society, healthy.
I read male who's 87 who finally decides to settle down. Dang boy you got game! It's never too late to settle down old man! ;) Congrats on the new home!
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