Japanese people's housing dreams are fading, with housing prices at 10 times annual income

The dream of Japanese people owning their own homes in the city center is gradually fading. Based on lifelong employment, buying a home after marriage, and paying off the mortgage before retirement, this traditional Japanese model has collapsed due to rising housing prices, increasing single-person households, and stagnant wages. After World War II, Japan implemented long-term policies offering incentives for homeownership, which also ushered in a period of “rebuilding.”

“If this continues, this area will become a neighborhood where ordinary people can’t afford to live,” said Takashi Higuchi, the mayor of Chiyoda Ward, Tokyo, expressing a sense of crisis. Due to rising housing prices and rent, in July, Chiyoda Ward proposed measures to introduce resale restrictions on real estate to the Real Estate Association (Tokyo Chiyoda Ward), which works with large real estate companies.

In September, the association stated, “It is necessary to take measures to curb short-term resale activities driven by speculation.” Some developers have already begun to respond, such as banning resale within a certain period. However, aside from increased construction costs, excess funds from abroad continue to flow into Japan’s real estate market. There are still no signs of housing prices stabilizing.

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Japan Economic News and the Financial Times merged in November 2015 to form a single media group. The alliance between the two newspapers, founded in the 19th century in Japan and the UK, is promoting collaboration across a wide range of fields under the banner of “high-quality, most powerful economic news.” As part of this effort, articles are now exchanged between the two newspapers’ Chinese-language websites.