The Japanese dream of homeownership is fading, with housing prices reaching 10 times annual income

The dream of owning a home in the central districts of Japanese cities is gradually fading for Japanese people. Under the premise of lifetime employment, buying a home after getting married and paying off the mortgage before retirement—this traditional Japanese model has already been breaking down due to soaring housing prices, a growing number of single-person households, and weak real wage growth. After World War II, Japan had long promoted a homeownership policy offering incentives for new homes, and this policy also ushered in a “reconstruction” period.

“Otherwise, this area will become a neighborhood that ordinary people can’t afford to live in,” said Takaki Higuchi, mayor of Chiyoda Ward in Tokyo, showing a sense of crisis. Due to rising housing prices and higher rents, in July Chiyoda Ward submitted a request to the Real Estate Association for Major Real Estate Companies (Tokyo Chiyoda Ward) to introduce measures to regulate the resale of properties.

In September, the association published its view: “It is necessary to take measures to curb short-term resale activities intended for speculation.” Some real estate developers have already started to take countermeasures—for example, banning the resale of homes within a certain period. However, in addition to increased construction costs, overseas excess funds continue to flow into Japan’s real estate sector. Even now, there are still no signs that housing prices will stabilize.

To continue reading, click here to enter the Nikkei Chinese website

The Nikkei and the Financial Times merged in November 2015 into the same media group. An alliance between two newspaper companies—Japan and the UK—both founded in the 19th century—is moving forward under the banner of “high-quality, the strongest economic journalism,” advancing wide-ranging cooperation such as joint special features. This time, as part of that effort, an exchange of articles has been carried out between the Chinese websites of the two newspapers.