Cheaper Housing and Living Costs in Japan Than in Rural America

Article written by Yoshiaki Maekawa

Housing Situation in Central Tokyo

If you’ve ever been to Japan, you probably know that Japanese restaurants offer delicious meals at lower prices than in the U.S.—and without the need for tipping.

Foreigners and tourists are welcomed and treated with hospitality, and the low prices often come as a surprise. If you’re not just traveling but actually living in Japan, you’ll likely be even more surprised by how affordable housing is.

For example, let’s take a look at how much it costs to rent a 1DK apartment (1 room + dining/kitchen) in central Tokyo (within the 23 wards). While there are some variations between different wards, the average monthly rent is about $1,100 USD. In contrast, a similar one-bedroom apartment in a smaller U.S. city like Louisville, Kentucky costs around $1,300 USD on average.

Tokyo is one of the largest cities in the world with an extensive public transportation system, making it far more convenient and safer than most U.S. cities, where owning a car is almost a necessity. In Japan, major train and bus stations have English signage everywhere, and large stations even have information desks.

Convenient and Affordable Japanese Convenience Stores

The term “convenience store” couldn’t be more accurate in Japan—you can find nearly everything from ready-made meals to underwear. Compared to Japanese foods and products sold at Japanese grocery stores in the U.S., the prices in Japan are significantly lower.

For example, a pack of inari sushi in the U.S. might cost around $10, whereas in Japan, you can buy it for about $3.40.

Bento lunch boxes also come in a wide variety, and you can find many options for under $6.78 USD. In contrast, Japanese grocery stores in the U.S. rarely sell bentos for under $10. There are even bento delivery services, where you can get a balanced and tasty meal delivered for around $4.00 USD.

How Much Are Mortgage Rates in Japan?

If you were to find a job in Japan and consider buying a home after a few years, you might be shocked at how low mortgage interest rates are. Depending on the conditions, there are some banks in Japan that will even offer mortgage loans to foreigners.

As you may know, even though mortgage rates in the U.S. have recently decreased, they still hover around 6.5%. In contrast, Japanese interest rates are around 0.5% to 0.7% for variable rates, and 2.5% to 3% for fixed rates. Even credit card interest rates in Japan, ranging from 14% to 18%, are relatively low compared to those in the U.S.

Why Is the Cost of Living So Low in Japan?

There are a few reasons for Japan’s low cost of living: the country has been in a deflationary state for over 30 years, and the average income is less than half that of the U.S.

So, for someone with a U.S. dollar income living in Japan, the combination of low local prices and strong dollar value can effectively raise your standard of living by 2 to 3 times compared to living in the U.S. For instance, someone earning a net annual income of $60,000 USD in the U.S. would be earning the equivalent of about ¥9 million in Japan—considered a high income there.

Why not consider living—or retiring—in Japan?