Japan is an amazing country and living there is like nowhere else in the world. And it is why a lot of people from all over the world are moving to Japan and investing in real estate in Japan. Japan is the only country in this region where you can purchase land and property very easily. But not only that, but Japan real estate market is also very affordable. But then why do Japanese young people prefer renting over buying? It just doesn’t make sense but we are here to tell you more about it.
Not earning enough money
One of the main reasons and if not the main one for why Japanese young people prefer renting over buying is the fact that most Japanese people don’t earn a lot of money. Japan has a struggling economy even though it is a well-developed country. This is why jobs aren’t as well-paying as in other countries. On average, people have salaries that are between 160 000 and 250 000 yen. When you put that into US dollars, it is between $1,500 and $2,300. This isn’t such a large amount of money to work with. And even though amenities in Japan are relatively cheap, this still isn’t enough money for paying off a loan for an apartment, let alone a house. And talking about saving money on the side for a house is simply impossible. With such low income, how can they manage to save some money on the side? Low income is one of the reasons why a lot of people move away from Japan. And if you want to do the same, www.kokusaiexpress.com is the moving company you should hire.
Housing is too expensive
We mentioned that housing is affordable. And it is. But it is affordable for people who are working in the United States, for example and earning United States paychecks. So, if you are buying property overseas, consider Japan. As paychecks in Japan are small and people don’t earn a lot of money, buying real estate for them is simply impossible. Especially in Tokyo. Tokyo is the most expensive city in Japan. The nationwide average monthly rent for a one-room apartment that is between 20 and 40 square meters costs from 50,000 and 70,000 yen a month. In US dollars, this is between $500 and $650 a month. In Tokyo, the prices are much different. You would have to pay around 100,000 yen, which is $935 US. And that is not including amenities and bills.
And if you were to buy an apartment somewhere in Japan, not Tokyo, you would have to pay 950,000 yen per square meter. That equals to $8880 per square meter. That is if you want to purchase an apartment in the city center that is not Tokyo. So, let’s say you want to buy 50 square meter apartment in the city center. That would cost you 47,500,000 yen which is $444,000 US. And if you are earning only $2,000 US per month, this is simply impossible.
And Tokyo is even more expensive. A square meter for an apartment in the city center in Tokyo costs around 1,187,000 yen. This means that a 50 square meter apartment costs 59,350,000 yen and that would be $555,200. And that is just the average price for an unfurnished apartment. As you can see, renting in Japan is much better and cheaper.
When buying a house, you also have to pay a lot of money for land
In Japan, not only does housing cost a lot but so does the land surrounding it. And houses are even more expensive than apartments as they are bigger. They are also mostly very old and run down. This means that after buying a house you also have to invest in repairing it. But you also have to invest in maintaining it. These are expenses not a lot of young people can cover and it is why Japanese young people prefer renting over buying. Even if you relocate to any part of the country, the housing still remains very expensive. It truly is a luxury to own a home in Japan.
Income is low, housing is very expensive, and the worst part of it all is that the taxes are very high. In fact, Japan’s individual income tax rates are among the highest tax rates in the world. This is including local taxes too. Paying such large taxes isn’t easy especially if you own a home. That is why most people are renting their homes in Japan, especially young people. The effective top marginal tax rate is around 55%. And Japan has a progressive tax system which means that a progressively higher tax rate is applied based on how much you earn.
A lot of young people want to move away from Japan
Last but certainly not the least important reason why young people prefer renting over buying in Japan is the fact that they want to move away from Japan. This is an amazing country with a lot of things to see and do but the fact that you can’t earn a lot of money makes a lot of people want to move away. Young people move away to get an education, to start working better jobs and living a far more comfortable life. This is why while they are still living in Japan they are not even thinking about investing in real estate as their main goal is to move away from Japan. And if you’re from Japan and planning on doing the same, here’s where you will find the most affordable places to live in Texas.