Amid Price Surges and Population Decline, Is Buying a House in Your 50s Still Wise?

Even within Tokyo’s 23 wards, there are still areas worth targeting

Many middle-aged readers may feel a lingering sense of regret for not having bought a home when they were younger. Some may have hesitated because property prices seemed too high, while others were content to rely on company housing allowances and simply let the years slip by.

In the meantime, according to a survey by the Real Estate Economic Institute, the average price of a new family-oriented condominium in Tokyo’s 23 wards has hit a record high of 130.64 million yen, while even secondhand condos now average over 100 million yen — far beyond the reach of most ordinary buyers.

What about rentals? Data from LIFULL HOME’S shows that the average rent for a single-person unit in the 23 wards is 118,396 yen, and for family units 237,195 yen — a sharp increase across the board. So what should renters in their 50s, approaching retirement, do?

“If you loosen your criteria — for example, consider older buildings, bus-access areas, or properties farther from stations — there are still plenty of places to buy or rent within the 23 wards, even if the central five wards are difficult,”

says real estate consultant Tomoyuki Akitsu.

The five central wards — Chiyoda, Minato, Chuo, Shinjuku, and Shibuya — have become completely unaffordable for ordinary buyers. However, traditional downtown areas like Katsushika, Adachi, and Arakawa have not seen the same dramatic surge. Larger wards such as Setagaya, Ota, Suginami, and Nerima also present opportunities.

“Even within a single ward, there’s a clear split. For instance, in Setagaya, properties near Sangenjaya Station have skyrocketed, but those over 20 minutes on foot from a station have remained relatively stable. Older buildings are naturally cheaper. Even in areas where you need to take a bus to the station, the address still says ‘Setagaya,’” Akitsu explains.

A surge of inherited properties from the dankai junior generation (baby-boom echo generation) is expected to flood the market

Even within Tokyo’s 23 wards, neighborhoods with long histories are seeing a rise in promising properties. This trend is linked to the onset of inheritance among the dankai generation — those born between 1947 and 1949 — who are now reaching advanced age. Typically, the first inheritance (primary succession) occurs when a husband passes away and the wife inherits the property. After 2030, this will shift to secondary succession, in which those wives’ children — sons and daughters — inherit instead.

“The dankai generation has a high rate of homeownership, often with older houses in Tokyo. When their children — now the dankai junior generation — inherit, they often already own their own homes or condominiums. As a result, these inherited properties end up in surplus. They may be rented out or sold, adding more supply to the market. Going forward, such second-inheritance homes will continue to flow into the market,” explains real estate consultant Tomoyuki Akitsu.

Another factor is the rise in interest rates. The Bank of Japan has ended its long-standing negative interest rate policy. While the pace and scale of rate hikes will depend on future economic conditions, a gradual rise in rates is inevitable. As long-term interest rates increase, mortgage payments will rise accordingly. Meanwhile, Japan’s declining population is also beginning to affect Tokyo — projections show the capital’s population will start to decrease by 2040.

“Outside the city center, population decline will likely make homes easier to buy or rent. Higher interest rates will reduce the amount people can borrow, making properties harder to sell and eventually forcing price reductions. Combined with the increase in inherited homes from the dankai generation, the growing supply will revitalize the secondhand housing market — and increase opportunities to find hidden gems,” Akitsu adds.

While middle-aged and older renters may still have options, it’s also a race against time. Whether to keep renting or finally purchase a home — the window for that decision is narrowing.

Around 55 is the final cutoff

“You can’t take out a loan unless you’re actively working and have a stable income, so once you fully retire, you won’t be able to get a mortgage. Also, housing loans have an age limit for full repayment, which varies by financial institution, but generally, the loan must be paid off by the age of 70 to 80. Therefore, if you’re 55 and borrow from a bank that requires repayment by age 80, the maximum loan term is 25 years.

When the repayment period is shorter, the total amount you can borrow decreases, and even if you can borrow, your monthly payments will be higher. Realistically, it’s best to take out a loan with a repayment period of 25 years or more. Thus, if you’re taking out a housing loan, around age 55—when your income is still relatively high—is the final line, and taking out a 25-year loan while making extra payments when possible is the practical approach.

Even for renters, landlords conduct income screenings, so it becomes difficult to rent a new property without sufficient income. In the future, the balance of supply and demand may make it easier for seniors to rent compared to now, but as you age, if you don’t have a steady monthly income, it will still be harder to rent.”

It’s important to clearly envision your post-retirement life while you still have income.

“Renters should start simulating now whether they’ll be able to afford rent after retirement. After retiring, your income decreases. It also becomes harder to pass rental screenings, so if there’s an area you want to live in, move there while you’re still working. And naturally, if you can no longer afford rent, you’ll have to move out, so you’ll need to have sufficient savings.

If you plan to buy, act while you’re still working. Think not only about the purchase itself but also about life after the purchase. Buying a used condominium, for example, costs several million yen in brokerage fees and taxes, and if you take out a loan, you’ll pay several million yen in interest over time. Additionally, homeowners must pay property taxes, and especially for condominiums, there are monthly repair reserve fees and management fees.”

It’s also important to recognize that your values will change after retirement. Once you retire, you won’t need to commute, and your social obligations will decrease. Your lifestyle will change dramatically.

“People tend to evaluate properties through the lens of their working years, thinking that properties far from stations are inconvenient or low in value. But once you no longer have a daily commute, even a 30-minute walk from the station doesn’t matter.

Compared to properties near stations, suburban areas already have lower rents and are easier to buy into. If you loosen your conditions—such as accepting properties farther from stations, older buildings, or without auto-lock—you’re more likely to find a property within reach, whether renting or buying.”

Whether you buy or rent, it seems necessary to reassess your current lifestyle while you still have income, and think carefully about which conditions you can compromise on in order to live better in the future.