In recent years in Japan, condominium rents have continued to rise, and more tenants are now looking for housing that offers greater overall satisfaction for the same monthly rent.
As a result, apartments are beginning to attract renewed attention as a practical alternative.
A recent article in a major Japanese business newspaper also highlighted this trend, noting that an increasing number of renters are choosing apartments over condominiums.
The article pointed out that, at the same rent level, apartments often offer more space and newer facilities, making them an attractive option for tenants.
In this article, I would like to take a closer look at this shift.
Before doing so, it is worth noting that there is no clear legal definition distinguishing “apartments” from “condominiums” in Japan.
In some cases, even wooden buildings are marketed as “condominiums.”
For the purpose of this article, however, we will use the common distinction: reinforced concrete (RC) and heavy steel structures as “condominiums,” and wooden structures as “apartments.”
Rising Rental Prices
While the sharp increase in new condominium prices has been widely reported, rental prices have also been rising accordingly.
According to data released by a real estate information service provider, the average asking rent for single-occupancy condominiums in Tokyo’s 23 wards exceeded ¥100,000 per month as of October 2025, continuing to set record highs.
Traditionally in Japan, housing costs of around 25–30% of take-home income have been considered a sustainable benchmark.
If monthly rent is ¥100,000, this implies a gross monthly income of over ¥400,000.
However, with ongoing inflation and rising spending on hobbies, leisure activities, and personal interests, even households earning more than ¥400,000 per month may not necessarily feel financially comfortable.
In addition, more young people are allocating part of their income to investments such as NISA accounts, choosing to limit housing expenses and direct surplus funds toward their future.
Viewing the Situation from an Investor’s Perspective
Let us now consider this trend from an investor’s point of view.
Although corporate wage increases are progressing, rental strategies that rely primarily on a relatively narrow segment — single tenants earning ¥500,000 or more per month — carry inherent risks.
If rent levels are stretched too high, tenant turnover tends to increase at renewal.
Furthermore, life events such as marriage, cohabitation, or pregnancy often prompt tenants to move to larger homes.
There is also uncertainty as to how long wage growth among younger generations will continue.
At a time when construction costs remain elevated, minimizing long-term vacancy risk has become increasingly important for investors.
Against this backdrop, apartments are once again drawing attention as a viable investment option.
Differences in Rent Levels and Rent Decline Rates
According to the same real estate data provider, the average asking rent for single-occupancy apartments in Tokyo’s 23 wards is more than 30% lower than that of condominiums.
One reason is that many older wooden apartments still exist in central Tokyo, which pulls down average figures.
Even so, it remains true that wooden apartment buildings are structurally better suited to maintaining lower rent levels—largely because construction costs differ significantly from those of condominiums.
In a previous article, I introduced a book titled Conditions for Winning Real Estate Investment, which discusses “rent decline rates” as a key factor.
One of the main causes of rent decline identified in the book is physical deterioration of the building.
That said, modern wooden apartments can maintain an appearance close to their original condition even after ten years, depending on design and exterior planning.
With proper planning — much like heavy steel structures — long-term asset value can be preserved.
Because rents are set at relatively accessible levels, wooden apartments also tend to attract tenants more consistently over the long term.
Low Cost Alone Is Not Enough
However, this does not mean that “cheap is good enough.”
Real estate professionals often point out that extremely small wooden apartments tend to lose competitiveness over time, especially against nearby RC studio units.
In fact, recent trends suggest that more tenants are seeking larger living spaces.
On social media, content showcasing spacious and comfortable interiors has become more prominent than examples focused on maximizing extremely small rooms.
In addition to space, well-designed bathrooms, kitchens, and overall facilities appear to be key reasons apartments are being chosen today.
The main competitors for apartments are typically older single-occupancy condominiums.
Many RC studio units still suffer from small layouts, outdated interiors, aging plumbing, or inefficient floor plans.
When these shortcomings are addressed, even wooden apartments can achieve high tenant satisfaction and maintain stable rent levels.
In other words, properties that are “cheap only” are becoming increasingly difficult to sustain as long-term investment assets.
Conclusion
Apartment or condominium—the structure itself is not the deciding factor.
What truly matters is how the property is evaluated by the market.
As tenants become more selective, periodic updates to both interiors and exteriors will be increasingly necessary to remain competitive.
Going forward, investment decisions will depend not only on whether a building can be constructed, but on whether it can continue to be chosen over time.