Buy or rent

[RetireJapan]

So wondering if not better to rent at least after Olympic is over? I know renting (done that all my life) looks like wasting money but at 50yr old I am not sure that buying is better than renting.

Looked at investments properties but the gross yield in Tokyo is like at very best 5% meaning I don’t know much but after tax not so much left not even thinking of all the maintenance costs.

Any thoughts?

Generally speaking the lower rent yields are, the better it is to rent.

Also, particularly in Japan, unless you are going to live somewhere for 10+ (the rest of your life?) buying can be an expensive option. If you are going to live somewhere long-term, you can often pay quite a bit less for a mortgage than for rent (but don't forget to account for maintenance, property tax, etc.).

[TokyoTower]

I'm going to buy property soon so I have similar questions.

I've heard that the 'Olympic bubble' is mostly limited to new mansions. The rising cost of of mansions in other areas has been blamed on a shortage of construction materials that are needed for the Olympics (and Tohoku reconstruction). Can anyone confirm??

Even though prices are rising for new condos, locals are priced out of the market and I've read that there are few buyers outside wealthy Chinese etc.
This situation has lead to people claiming some kind of crash in prices is possible. So if you wanted to buy a new apartment, waiting a few years could be an option.

[jcc]

I recently went to a couple of secom home life's free seminars.

Obviously they want to sell you something so there's that.

But they pointed out that even with the olympics over, Japan has a lot of construction work to do as the whole highway system is due for work. See here: https://www.c-nexco.co.jp/koushin/

So I dunno. Overall condo prices in tokyo are still very cheap compared to say NY, London, Paris or other major metropolises.

Also fwiw, there are fewer new mansion units being built now than there are used units on the market, this is new for japan coming with increasing cultural acceptance of used homes, and builders now limiting their developments mostly to prime estate(e.g. near stations).

Again though, all of this is part of their spiel to sell you on this stuff. They'll encourage you to buy and then just resell or rent it out(consider it an investment) if you need to move.

[TokyoTower]

Ok that's interesting to hear.

Yes, Tokyo seems much cheaper than London and other major cities. I often see foreign news media praising Japan for its affordable housing. Unfortunately the other side of that is that buying a new home is almost guaranteed to lose money.

Luckily the ultra low interest rates and various tax breaks that you get as a homeowner mean that you have more free money each month to invest into the markets.

So maybe it does balance out in some way.

[crew]

I wish there was a Japanese equivalent of the New York Times rent vs buy calculator.