Housing: rent or buy

Three times, at 35, 45 and 55, you get to decide whether to buy a home. If you rent, you keep paying rent; if you own, you pay off a mortgage while the home's value moves with land prices. Which comes out ahead depends on where and when you live.

The share of people who buy

In the Statistics Bureau of Japan's 2023 Housing and Land Survey (land tabulations), 47.1% of households nationwide own the land their current home stands on. By age, the share rises steadily: 19.6% at 30–34, 33.3% at 35–39, 46.3% at 45–49, 52.3% at 55–59 and 59.1% at 60–64. Prefectural differences are large too: 27.5% in Tokyo, 26.9% in Okinawa and 66.7% in Akita.

On auto, the share of people who buy a home matches these values by prefecture and age. Note that this is the rate of land ownership, not the homeownership rate itself (they differ because of condominium units and the like).

How the mortgage is calculated

Mortgages use the 3.25% housing loan rate from the Japan Finance Corporation's Economic and Financial Data (September 2026 issue). Because amounts in the game move in "today's money," excluding inflation, repayments are calculated at the real interest rate (about 1.4%), which subtracts the 1.8% inflation rate. The down payment is 10% of the price and the term is 30 years (20 years if you buy at 55). If you can't cover the down payment, or if you are a non-regular worker and fail the loan review, you keep renting.

Home prices, rent and land prices

The value of an owned home moves separately for land and building. Of the purchase price, the building's share is 50% in rural and major metro areas and 60% in greater Tokyo, and the building loses 3% of its value each year (to about 40% after 30 years). The land moves by half of land price growth minus inflation (all assumptions). If you buy a ¥52 million home in greater Tokyo, it is worth about ¥39 million 30 years later. If a mortgage balance remains at retirement, you pay it off with your retirement allowance or other funds (assumption). When counting it toward net worth, we allow for a discount when selling and value it at 55% of the price in rural areas, 80% in major metro areas and 100% in greater Tokyo (assumption).

Inheriting your parents' home

People still renting at 62 inherit their parents' home and become owners at a rate that matches land ownership by prefecture and age. If you divorce, the home you own is sold and whatever is left after paying off the mortgage is split.

Related: Savings and investing / Marriage, children and divorce

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