As a long-term resident, should I purchase property in Japan? (Referencing the previous home-buying question list)

Okay, friend, let's talk about this big decision. After living in Japan for a while and seeing the rent go out every month, you start thinking, "Maybe I should buy a place?" I get it. I really do. There's no one-size-fits-all answer, but we can break it down and examine every detail so you can make your own decision.

Should I Buy a House in Japan as a Long-Term Resident?

This question is like asking, "Should I have ramen or curry for dinner?" It depends on your taste, budget, and current mood. But buying a house is way more complicated than dinner. Let's cut to the chase and look at the key points from several angles.

1. Crunch the Numbers First (The Financial Side)

Buying a house is first and foremost about money. Don't just look at the sticker price; the hidden costs are much larger.

A. Is Your Down Payment Ready?

Ideal Scenario: Generally, having 10%-20% of the property price as a down payment is safer. This makes banks look favorably on you, makes loan approval easier, and might get you a better interest rate.
The "Zero Down" Temptation: You'll see lots of "0 down payment" ads. Sounds great, but there's no free lunch. This means your total loan amount is higher, your monthly repayments are heavier, and banks scrutinize your application more strictly. Unless your income is exceptionally high and stable, it's not recommended.

B. Beyond the Price: The "Closing Costs"

This is a common pitfall for first-timers! Besides the property price itself, you need cash ready for "closing costs" amounting to 6%-9% of the property price. This includes:

Real Estate Agent Fee: The big one – (3% of property price + 60,000 yen) + consumption tax.
Registration and License Tax: Tax for registering the property and land titles.
Stamp Duty: Tax stamps affixed to the purchase contract.
Real Estate Acquisition Tax: A tax bill that arrives a few months after you buy – don't forget this one!
Judicial Scrivener Fee: Lawyer's fee for handling the paperwork.
Fire/Earthquake Insurance: Mandatory if you have a mortgage.
Loan Processing Fee and Guarantee Fee: Money paid to the bank.

Example: For a 30 million yen property, you'll need at least around 2 million yen in cash on top of the price for these costs.

C. The Annual "Cost of Ownership"

Buying isn't a one-and-done deal; it costs you money every year:

Fixed Asset Tax / City Planning Tax: Annual property taxes, non-negotiable.
Management Fees / Repair Reserve Fund: If you buy an apartment (マンション), these are significant fixed monthly expenses, and they tend to increase as the building ages.
Maintenance Costs: If it's a detached house (一戸建て), there are no management fees, but you pay for everything yourself – exterior walls, roof, pipes. A major renovation every decade is also a substantial cost.

2. Let's Talk About "You" (Life Planning)

Once the money makes sense, ask yourself some personal questions.

A. Are You Sure You Want to "Settle Down" Here?

Job Mobility: Will you be in this city for the next 5-10 years? Company transfers (転勤) are common in Japan. What if you want to change jobs and move to another city? You can't just pick up and leave like you can when renting.
Family Changes: Marriage, children, kids' schooling, caring for parents... Changes in your family structure directly impact your housing needs. That 1LDK you buy now might be too small once you have kids.
Possibility of Returning Home: Many people, even with permanent residency, still think about returning home someday. If you decide to go back in a few years, dealing with a Japanese property isn't easy – selling takes time, and you might not get a good price.

B. "Rental Freedom" vs. "Owner's Peace of Mind"

This is a classic debate, especially pronounced in Japan.

The Renter's Perspective:
- Flexibility: Move whenever you want, following job or life changes.
- Convenience: Call the landlord if appliances break; move to a newer place when the old one feels worn down. No worries about maintenance or depreciation.
- Lower Risk: No burden of a multi-million yen loan, no worries about falling property prices or natural disasters.
The Buyer's Perspective:
- Stability and Belonging: It's your home. Renovate, remodel, get pets – no need to ask a landlord.
- Asset Building (Debatable): Once the loan is paid off, the property is yours. While the building depreciates, the land is permanent ownership, potentially an asset for the future.
- Forced Savings: Part of your monthly mortgage payment is interest, but part pays down the principal. That principal portion turns "consumption" (rent) into "assets" (equity).

3. Understand Japan's Real Estate "Idiosyncrasies" (Market Characteristics)

Japan's property market is very different from many others; you need to adjust your thinking.

【Key Point】The Building is a Depreciating Asset, the Land is the Real Asset:
- Rapid Building Depreciation: In Japan, especially for wooden detached houses, the building's value can depreciate to near zero in about 20-25 years. You're primarily buying the land. Reinforced concrete apartments depreciate slower but still lose value.
- The "New Build" Premium: A brand-new property (新築) starts depreciating the day you move in. That's why many opt for better-value, often better-located "used" (中古) properties.
Liquidity (How Easy is it to Sell?):
- Location! Location! Location! Good properties in central Tokyo or near stations sell easily. But in slightly remote areas or cities with declining populations, your place might sit on the market for years, forcing you to slash the price.
Disaster Risk:
- Earthquakes and typhoons are realities. Before buying, always check the area's hazard map (ハザードマップ) and understand the building's earthquake resistance standard (post-1981 "New Earthquake Resistance Standards" are the minimum).

A Simple Checklist to Help You Decide

When you're stuck, honestly answer these questions:

[ ] Do I have stable, sufficient cash flow to cover the down payment and closing costs?
[ ] Have I calculated and can I afford the monthly mortgage payments and annual ownership costs?
[ ] Do I have very clear plans to live in this city for the next 5-10 years?
[ ] Do I have permanent residency or very stable employment to qualify for a low-interest loan?
[ ] Compared to the flexibility of renting, do I crave the stability and sense of ownership of my own home?
[ ] Do I understand and accept the reality of "building depreciation, land value retention" in Japan?
[ ] Have I thoroughly researched the property's location and disaster risks?

If you can check "✔" most of these, then congratulations, you can start seriously looking at properties. If many are "✖" or "?", then maybe wait, and enjoy the freedom of renting a little longer.

To Sum Up

Friend, buying property in Japan is more of a consumption decision + lifestyle choice than a pure investment play like it might be elsewhere.

Don't be pressured by talk like "everyone's buying" or "you're losing money if you don't buy." Think clearly about your fundamental purpose for buying. Is it to improve your quality of life? For security? Or as an investment?

To live comfortably and securely: If your finances allow and you're prepared for the long haul, it can be worth it.
To make money: Be extremely cautious. You need expert knowledge to pick properties and locations with appreciation potential, which is very difficult for the average person.

The final decision is yours. Take your time. This could be one of your most important decisions in Japan. Spending extra time researching is absolutely worth it.