Navigating Japanese Residential Asset Classes and Terminology
When you start looking into various real estate portals or review information from an agent, it may be unfamiliar territory. In this section, we clarify the various property types, ownership structures, physical structures and layout basics.
What are the investable asset classes in Japan?
While it may seem intuitive, the names for property types in Japan sometimes contradict their western counterparts. These are main residential asset types in Japan.
Investment property (投資物件)
Condominium unit in mansion (投資用マンション)
Whole building / Multi-unit mansion (一棟売りマンション)
Whole building / Multi-unit apartment （一棟売りアパート）
Holiday House (別荘)
Land for development
Other – i.e. office, retail, parking lot, etc.
Personal housing （住宅物件）
Condominium unit in a mansion (マンション)
House (一戸建て)
Holiday House (別荘)
Land for development （土地から建てる）
Mansion – or "mansion" (マンション) - multi-story, typically reinforced concrete (RC) residential buildings with elevators. High-rise residential towers are called “tower-manshon” (タワマン)
Apartment - or "apaato" are small-scale, 2 or 3-story residential building made of wood or light steel
House - or “ikkenya”（一軒家）
Holiday House – or “bessou” (別荘) typically owned in other prefectures nearby your home-base
Land - or "tochi," (土地) presents an opportunity for development for the various asset types
Ownership Structure
Broken down into two structures, freehold and leasehold. There are both benefits and demerits to each, detailed below.
Freehold or 所有権 (shoyuken) - complete ownership of both the land and any structures on it indefinitely. In situations involving unit-level ownership or subdivisions such as in mansions and condominiums, each owner has a proportional share of the land and building.
Leasehold or 借地権 (shakuchiken) - ownership of the building on leased land for a specified period, with a mandatory lease payment for the land on which the property is situated. The typical duration of a leasehold for residential properties is often around 50 years and declines as ownership continues
Structure
In Japan, residential and commercial buildings are commonly constructed using three main structural types: wood, steel and Reinforced Concrete (RC). Each type has its characteristics and is chosen based on factors such as building purpose, cost, earthquake resistance, and architectural design.
Photo Source: https://invest-online.jp
Reinforced Concrete (RC) Structures:
Advantages: Reinforced concrete provides excellent strength and durability. It is also fire-resistant, offers good earthquake resistance and strong sound insulation.
Disadvantages: Higher cost for both construction and demolition due to heavier materials.
Steel Structures:
Advantages: Second most economical after wood, stronger seismic resistance and resistant to pests and decay.
Disadvantages: Still susceptible to earthquake and strong winds, poor sound insultation and rust.
Wood Structures:
Advantages: Cost-effective construction, allowing for short construction periods and inexpensive costs for construction and demolition
Disadvantages: Lowest earthquake and wind resistance, and poor sound insulation performance compared to other construction types
Room layouts
The Japanese unit layout is categorized into the “LDK (Living, Dining, Kitchen)” property layout abbreviations. For instance, a 1LDK apartment refers to a one-bedroom unit with a shared room spacious enough to accommodate a Living and Dining area, along with a Kitchen. Japan’s most common layout, the 1K, signifies a one-bedroom unit with a door separating the bedroom from the Kitchen, which also functions as a corridor.
Photo Source: https://www.kencorp.co.jp
Tthe "J" or “jyou” (帖) commonly seen in the floorplan refers to the Japanese metric of a traditional tatami mat which is approximately 1.65sqm. For example, a 10帖 bedroom would be approx. 16 sqm and does not include the space outside the room such as the corridor or bathroom. Additionally, the 'tsubo' (坪) metric also commonly used, is equivalent to 2 jyou or tatami mats and is approximately 3.3 sqm.
Balcony and outdoor spaces, common areas (e.g., outside corridors), and lofted areas below the regulated ceiling height of 1.4m are also not included in the area calculation of your apartment and house.
