Sky-high real estate prices, Tokyo residents (Japan) choose to buy 'pencil houses'

As housing space in central Tokyo becomes increasingly limited and real estate prices escalate, many Japanese households have turned to “pencil houses” – small, tall houses that make the most of the land area.

Real estate prices are the main reason for the boom in buying 'pencil houses' in Tokyo, Japan. (Source: Kyodo)

"Pencil houses" have a lower initial purchase price than apartments or large houses, but high maintenance costs and limited ability to retain value make many people hesitant to buy.

According to statistics from the company One of a Kind, in 2024, Tokyo had at least 1,733 houses with land area under 50 m² for sale, an increase of 34% compared to 2018. Many of these are subdivisions from plots of land larger than 100 m².

The common design of these houses is that the first floor is the garage and toilet; the second floor is the living room; the third floor is the bedroom.

The Japanese government recommends a reasonable floor area for a family of three to be around 100 square metres. For a three-storey house with each floor measuring 35 square metres and a building coefficient of 60 per cent, the minimum land area required is around 58 square metres – much larger than today’s “pencil houses”.

A 37-year-old man living in Tokyo shared that in July 2024, he bought a 2-bedroom house + living room in Ota ward for about 70 million yen (470,000 USD).

Although the land area is only 50 m², the house is near the train station and school, enough to meet the needs of a family of three.

He believes that owning a home is still a safe way to prepare for old age.

Real estate prices are the main reason for the boom in “pencil houses” in Tokyo. According to Tokyo Kantei, the price of 100-300 m² plots in the Japanese capital has increased by 38% since 2018, while plots under 50 m² have increased by only 20%. The rising cost of materials is forcing developers looking to control costs to optimize by building on smaller plots of land.

Mr. Yamamoto Naoya, Deputy Director of Rakuda Company, commented: "The number of small houses has increased sharply since 2020 when the price of construction materials increased dramatically."

However, the new type of “pencil house” still has some potential risks.

According to LIFULL HOME'S, the price of small houses built within 20 years and put up for sale in 2024 will only increase by 13% compared to 2019, much lower than the group of houses with an area of ​​80-100m².

Maintenance costs are also higher: 3-story houses often have small porches, requiring more frequent repainting of the exterior walls. If you live in a 3-story house for 45 years, the repair cost per 3.3 m² can be 25% higher than a 2-story house.

However, in the 23 wards of central Tokyo, the average price of a new apartment in 2024 has exceeded 100 million yen. Considering the convenience factors such as commuting time and living convenience, the demand for “pencil houses” in the central area is still very high.

Source: https://baoquocte.vn/gia-bat-dong-san-cao-ngat-nguong-nguoi-dan-tokyo-nhat-ban-chon-mua-nha-but-chi-323981.html