Renting in Tokyo: the perks and the pitfalls

As rents rise throughout lots of the world’s main cities, costs within the Japanese capital have hardly budged.

In New York, the common hire elevated 35 per cent within the 12 months to June, in London, it rose 12 per cent, and in Sydney, it rose 10. In Tokyo, over the identical interval, the common hire elevated by simply 0.2 per cent.

Steady rents are excellent news for overseas staff who’re arriving in giant numbers following a rest of Japan’s border controls earlier this 12 months. Abroad guests to Japan exceeded 100,000 for the third consecutive month in June.

“My schedule is loopy,” says Kaz Harada, a neighborhood agent specialising in rental housing for overseas staff. “Persons are coming from France, US, UK and Hong Kong. They’re working usually for worldwide firms.”

However Tokyo’s rental market differs from that of lots of the world’s main cities: hidden prices and logistical challenges could make transferring extra difficult and costly than headline costs recommend.

After the challenges of discovering a rental dwelling in Hong Kong, the place he had lived for 5 years, or in Melbourne, the place he rented for 5 years earlier than then, Jeremy Good, 29, discovered a flat to hire simply when he moved to Tokyo in April to take a brand new job in publishing.

There have been loads of appropriate properties in areas he preferred and the buildings have been newer and higher stored than these he had lived in Hong Kong. After two weeks of looking, he discovered the best residence; two weeks after that he and his companion moved in.

And, whereas it was nonetheless small by most requirements — at 37 sq m — his Tokyo house is 50 per cent bigger than the one he left in Hong Kong, and prices much less. “We went from paying the equal of US$1,670 per thirty days to paying lower than US$1,400,” he says.

Good and his companion reside in Tomigaya, a part of Shibuya ward. It’s an space in style with overseas staff, with its procuring space surrounding Shibuya station — one of many world’s busiest and host to the notoriously congested pedestrian highway crossing. Others go for Minato ward, which hosts many diplomatic embassies, in addition to the headquarters of many main Japanese and worldwide firms. Inside Minato, Azabu-Jūban is in style because of its mixture of Japanese and western tradition in native bars, retailers and eating places and a comparatively excessive variety of English audio system in a metropolis the place the language barrier will be extreme.

When he began on the lookout for a house in March, Stanislav Belooussov, 32 — from Belgium, however residing in Jakarta on the time — was impressed with the vary of appropriate properties inside his finances of between $2,000 and $3,000 per thirty days. “In contrast to different cities in Asia you don’t actually have areas it is best to keep away from — the place you’re feeling you shouldn’t reside,” he says.

“Renting a spot in Tokyo is a lot simpler than in New York: the standard of residences you see in relation to their worth is a lot larger. It’s like night time and day,” says Hiroko, who returned to Tokyo after a interval residing in Queens, New York in 2016.

When she left New York, Hiroko, who declined to present her surname, and her housemate have been paying practically $4,000 per thirty days for a two-bedroom, second-floor walk-up, a 50-minute commute to work. Whereas it was somewhat smaller, the one-bedroom flat she moved to in Tokyo value round $1,500, had a elevate, a view, was lower than half-hour from her work and was in a well-liked neighbourhood.

“I discovered a spot inside per week. It definitely wasn’t like Manhattan, the place individuals have been simply waving the money,” she says.

Renting a spot in Tokyo is a lot simpler than in New York: the standard of residences you see in relation to their worth is a lot larger. It’s like night time and day

Discovering a house in Tokyo as we speak could imply cheaper rents — and fewer competitors for properties — than in lots of the world’s main cities. However transferring prices are very excessive, and renters face important sensible obstacles that they might not have encountered earlier than.

Harada estimates transferring prices equate to between 4 and 5 months’ hire for a typical two-year contract. In Japan, renters, not landlords, usually pay property brokers’ charges — usually one month’s hire plus tax. For properties in excessive demand, landlords might also cost key cash or reikin — a non-refundable deposit to safe a property — usually one or two months’ hire. Normally, tenants will need to have insurance coverage to cowl damages to their rental dwelling. They have to even have a guarantor — for a foreigner that is usually an organization — legally accountable for any unpaid hire or damages.

A big chunk of renters’ deposit is taken by the owner on the finish of the contract as a cleansing price; Harada estimates that, for a 100 sq m flat with air-con, this price is greater than $1,000. When Alexis Au-Yeung, 35, who’s from the US and who moved from Hong Kong to Tokyo in 2017, left his first rental flat, the owner took half of his two-month deposit for the service. “I used to be shocked, as a result of it value a lot. It felt like a little bit of a moneymaking train.”

Harada says that many landlords gained’t hire to foreigners, cautious of the language barrier and a notion that overseas tenants are rowdier and fewer accountable, though giant company landlords — corresponding to Tokyu and Mitsubishi — which lease properties on behalf of personal house owners, are comfy with overseas staff. He estimates properties of this sort comprise between 10 per cent and 30 per cent of these in Shibuya and Minato.

In Might, Belooussov waited two weeks for his new landlord — a personal particular person — to resolve whether or not to simply accept him as a tenant, throughout which era his agent wouldn’t let him supply on every other locations. “You’re simply ready; you possibly can’t do something and also you’re getting extra nervous as you get in need of time. In Singapore, Jakarta or Kuala Lumpur [where he has previously lived] usually the subsequent day I used to be paying the cash [to secure the property],” he says.

Good quickly realised that transferring with an animal — a avenue cat he had adopted in Hong Kong throughout lockdown — dominated him out of 90 per cent of appropriate Tokyo properties. Many of the brokers he met, in the meantime, had solely labored with overseas staff within the finance or know-how industries who had bigger lodging budgets than his, usually funded or subsidised by their employers. Belooussov approached 5 brokers earlier than discovering one which was suited to his wants. “Typically, they have been solely providing [homes in] a particular constructing or they might push solely unsuitable residences on me.”

These options make for some surprises for brand new arrivals to Tokyo’s rental market. However no less than they will depend on regular rents, based on Shigeto Nagai, chief Japan economist at Oxford Economics in Tokyo.

“Rents have been secure all through the pandemic, and the negotiating energy of tenants remained robust,” he says. Japan averted the sharp falls in rents that have been a function of many world cities within the early phases of the pandemic because of a resilient jobs market, which benefited from authorities assist and a tradition at Japanese firms to chop pay somewhat than jobs throughout powerful instances.

Sharp swings in hire costs have been uncommon traditionally, a development that’s unlikely to vary, says Nagai. Japan’s greater than three. a long time of low progress have meant stagnant family incomes; authorized and political custom protects tenants, and the attraction of property to traders has been sluggish to recuperate following the bursting of the property bubble within the early Nineties. “There has at all times been extra rigidity in dwelling rents in Japan in comparison with the US, Germany and so forth,” he says.