When you intend to construct a house in Japan you may come across different decision-making things. To decide and find a place where you want to live, and take possession of the plot of land can turn out to be the longest in time. Normally this is the biggest problem you may have, and you need to solve it by yourself. Unfortunately, no one can do it for you. Nevertheless, there is an abundance of matters in question that need your attention: what kind of mortgage loan is better to choose, how much deposit will you need, how much it will cost?
We have put together the conclusions of a survey of 206 Japanese couples to help people who have the same difficulties with the identical dream house. They all wanted to build a house in 2011-2014 and their dream came true. This is open information about the first steps for those who want to buy their own home and forget about renting houses and flats forever.
Cost of building a house in Japan
Most of the interviewed people, more than 70% confirmed that the full amount of the whole construction price was 35 million yen.
Less than 30% of the interviewed people admit that they have paid less than 25 million yen for building expenses.
But of course, it all depends on what features do you want inside and outside, what do you believe that is required to be in your dream home. According to the survey information on average, the price was 31.2 million yen.
Necessary deposit that you will need
It often happens that companies stand in need of a deposit of 10-20% of the supposed final price. And they need it before construction works will start, it's a common practice everywhere in the world. In accordance with that most of the interviewed people, more than 40% had to pay 12 million or less in a deposit.
And more than 25% had to pay less than 4 million yen in a deposit.
Type of mortgage loan that is suitable
In Japan, they don't have a huge variety of mortgage loans, only three.
First, fixed-interest loans. Not so popular, because the interest rates usually are higher than in other types. But the interest rate doesn't increase throughout the fixed term period.
Second, variable interest loans, the most popular in Japan. More than 70% of people who were interviewed in the survey had pure variable interest rate loans. Or a fixed term then, usually in 10 years, it becomes a variable interest rate mortgage loan. And this type of loan has recently become more and more popular among people.
And third, fixed-interest loans with 35-year repayment periods. Very famous in Japan, because it is financed by the Japan Housing Finance Agency, and many banks recommend it. It has its own name “Flat 35”, but among interviewed people, it wasn't in favor. Only 16.5% used this “Flat 35” system.
Monthly mortgage payments
Of course, it all depends on your situation and the amount of money that you had on your account when you started construction works.
Most of the interviewed people (70%) had to pay monthly less than 100,000 yen.
And more than 50% of interviewed people had to pay every month 80,000-100,000 yen.
Also, don't forget about the Japanese property tax every year, so if you want a house, then you need to include these payments with the other. When you will compute all spendings together from the very beginning of constructing works to the proud owner of your dream home.
Price of the land and necessity of buying
From the interviewed people only 70% of those who bought land, and 65% of them paid more than 10 million yen.
25% paid 20 million yen or even more.
And 11.1% paid 30 million or more.
Finding a place and solving all the problems with the land is the main complication for those who want to construct their own house in Japan. But be aware that land is a poor investment in Japan. For the last several years the price of the land is falling. The price of the house like an investment is just a little better than a car investment. There are also environmental factors, like humidity and earthquakes, but houses are not an investment in Japan.
In the end just some advice about how to low costage
1. You can try to build your house from shipping containers, compared to the wood they are stronger, resistant to earthquakes and floods. But you can't build anything near the river by using them.
2. If you can find local small companies, then don't hesitate to entrust them. They can even be more familiar with the climate and some other necessary things in your area.
3. Check your location for how much preparation works you will need. Earthquake safety, retaining walls - all of these can bring you extra expenses.
4. And be prepared to pay and pay extra money. Notary expenses can be about 100,000 yen only for changing the name from the previous owner to yours. Also, insurance is about 500,000 yen for 20 years.
5. In case you don't have money at all, you can try to buy a used house. And they are fairly cheap in Japan. You will have to pay only for the land, the house will be free because used houses have no price at all.