The compact living in Tokyo

September 7, 2018 / By

We all know living in central Tokyo is expensive, and recent research suggests that it will only get pricier in the coming years. Going small and compact might be the way forward.

Tokyo’s residential rents have been recovering since 2012 with rental growth picking up in 2016 as the Japan economy grew. The average monthly rent for Tokyo 23 wards central 3 wards in April 2018 was JPY 11,282/tsubo (USD 101.26) and JPY 14,206/tsubo (USD 127.50) respectively – representing an increase of 5% and 10% in asking price since 2012. Central 3 wards have shown the strongest rental growth among other areas largely due to the lack of new supply as well as significant increase in demand.

This means that the rental of a 7-tsubo (23.14 sqm) one-person room, commonly referred as  1K in Japan, will cost around JPY 100,000 (USD 897.50) per month in central Tokyo. This is beyond the affordability of the younger generation, not to mention that the price tag does not guarantee a good location and state of the building.

Figure 1: Leasing Condominiums – Average Rent Time Series (Tokyo 23W)
Source: Lifull Co., Ltd.
Central 3 Wards: Minato, Chiyoda, Chuo
Northern 5 Wards: Itabashi, Bunkyo, Toshima, Kita and Nerima
Eastern 7 Wards: Katsushika, Edogawa, Koto, Arakawa, Adachi, Taito, Sumida
Western 3 Wards: Shinjuku, Suginami, Nakano
Southern 5 Wards: Shibuya, Setagaya, Ota, Shinagawa, Meguro

Consequentially there is a new lifestyle option budding in Tokyo where small spaces are being utilized more efficiently. Recently, the 3-tsubo (9.92 sqm) room is fast becoming a popular option for the younger generation. While the overall space is small, these rooms come fully equipped with a shower and toilet, kitchen and a place to put a washing machine. There is an upper loft to sleep and an area at the bottom to put other furniture. Ceiling heights in these rooms are also higher than the usual 1K room so as to accommodate sleeping and storage space.

The popularity of such rooms among the younger generation can be attributed to the reasonable rental of only about JPY 60,000 (USD 538.50) per month, which is relatively cheaper than the 1K. The buildings are usually new and adherent to safety requirements that can withstand Japan’s frequent earthquakes. Additionally, these locations are usually close to a station located at the fringe area near to Tokyo central giving residents the convenience. Another reason behind the popularity of the 3-tsubo room is popular is because of after the long-hour working day, people would like to get home sooner, rather than to spend the long commuting time, so the 3-tsubo room is just to provide people a place to sleep.

While the overall trend of rents is expected to undergo further recovery for the next few years, we expect the 3-tsubo room to remain a popular choice for city dwellers in Tokyo.

Note: US$=JPY 111.42 as at 24/08/2018


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