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From ultramodern bustling urban landscapes to serene natural scenery, Japan offers a visual feast for all. Yet, Tokyo is impossible to overlook in terms of business and career opportunities. As the most populous city globally, Tokyo also boasts the world's largest urban economy by GDP, making it a likely destination for anyone planning a move to Japan.
Tokyo ranks among the priciest cities for expatriates. In 2020, it was listed as the third most expensive city worldwide in Mercer’s Cost of Living Rankings. Despite the high cost of living, wages in Japan are generally lower compared to other nations, which can make residing in Tokyo feel even more costly. Rent is a significant expense, followed by transportation and entertainment, leaving limited funds for savings. On average, a single individual in Tokyo can manage approximately 100,000 yen per month after paying rent. However, living expenses will vary based on one's income, lifestyle choices, and personal circumstances. Below is a general overview of the cost of living in Tokyo to assist you in planning your relocation to Japan.
Housing Cost
Tokyo offers a variety of accommodation options for foreigners. For those planning a short stay, fully furnished and serviced apartments are available. These accommodations are typically larger and more costly than standard Japanese apartments, catering to high-earning professionals on business trips. Recently, sharehouses have gained popularity due to their focus on community and the chance to interact with Japanese locals. Sharehouses like Sakura House and Oak House are especially favored by foreigners for their affordability and convenient locations.
For those intending to stay longer, renting an apartment in Japan is also an option. Depending on your employer, you may even receive a rent subsidy. Rental costs can vary based on factors such as the type of housing, location, age, size, and available amenities. Rent tends to be higher in central areas, particularly along the Yamanote Line. Popular areas for foreign residents include Shinjuku, Toshima, Arakawa, Adachi, Minato, and Edogawa wards.
Across Japan, the average rent for a one-room apartment (20-40 sqm) ranges from 50,000 to 70,000 yen. These apartments typically come unfurnished, and utilities like gas, water, and electricity—where electricity is usually the most costly—are not included. However, there are affordable apartment options for foreign residents. LeoPalace is a well-known provider of comfortable apartments for foreigners, offering services in both English and Japanese.
Upfront Cost of Renting
Moving into a new apartment in Japan can come with significant upfront costs, often amounting to about 5-6 months' worth of rent. Enlisting the help of a real estate agent (fudousan or 不動産) can be invaluable in finding an apartment that fits your budget. Many agents in Tokyo are English-speaking and specialize in working with foreigners, making the communication process between tenants and landlords much smoother.
When moving in, you’ll typically need to cover several fees, including a security deposit (shikikin or 敷金), agency fee, guarantor fee, maintenance fee, key fee, insurance, and key money (reikin or 礼金). The concept of key money might be unfamiliar to newcomers—it's a non-refundable gratuity given to the landlord as a gesture of appreciation for renting out the property. The practice became widespread after the Great Kanto Earthquake, as those who could pay extra upfront secured housing more quickly. While some rentals don’t require key money, these are harder to come by, so it’s wise to budget for this expense.
Additionally, all renters in Japan need a guarantor (rentai hoshounin or 連帯保証人), who is responsible for covering any unpaid rent or damages. This could be a family member or someone you know in Japan. If you don’t have anyone who can fulfill this role, certain companies (hoshougaisha or 保証会社) offer guarantor services for a fee.
Choosing the Right Place to Live in Tokyo
The Tokyo metropolitan area is vast, encompassing 23 central wards as well as numerous smaller towns that extend far in all directions—north, south, east, and west. Deciding on the ideal location can be challenging. To help you navigate your options, here’s a guide to some of the most expensive and budget-friendly areas in Tokyo.
Tokyo's Most Expensive Neighborhoods
The priciest neighborhoods in Tokyo are typically those situated close to the city center with easy access to major JR train lines. These areas are often in commercial districts known for their chic, sophisticated, and artistic atmospheres. Daikanyama, Hiroo, Azabu, and Nakameguro are among the most expensive places to live in Japan. These neighborhoods are renowned for their scenic beauty and are home to upscale restaurants, high-rise buildings, and luxury shopping districts. Azabu, in particular, is a favorite among expatriates, as it hosts many foreign embassies and diplomats. In these areas, rent for a one-room apartment generally starts at around 120,000 yen.
Tokyo's Most Affordable Neighborhoods
Although finding affordable housing in central Tokyo is possible, many foreign residents prefer more spacious and cost-effective options located further from the city center. While upscale areas command higher rents, the more affordable neighborhoods in Tokyo have their own unique appeal. These areas are often celebrated for their historical landmarks, vibrant festivals, and proximity to a variety of international cuisine. Nishi-Kasai, Sugamo, and Takadanobaba are popular choices for single renters, with rents as low as 39,000 yen for a studio apartment, all while maintaining access to major train lines.
If you’re open to a slightly longer commute, western Tokyo neighborhoods like Koenji, Shimokitazawa, and Setagaya have gained popularity for their distinctive charm and lower living costs. Additionally, if you don't mind an extended commute, you can further reduce living expenses by residing in nearby Chiba, Saitama, or Kanagawa.
Grocery Expenses
If you stick to a traditional Japanese diet, your monthly grocery costs in Tokyo can be quite reasonable. On average, a single person can expect to spend between JPY 30,000 and 45,000 per month on groceries. We're not converting this to US dollars due to the recent weakening of the yen to levels unseen in decades. However, currency values fluctuate over time, and these phases are never permanent.
If you follow a vegetarian diet or consume a lot of fruits and vegetables, your grocery expenses may be higher, as produce tends to be more expensive in Japan.
For those with larger families or who can buy in bulk with friends, shopping at places like Costco can help reduce monthly grocery bills.
Additionally, if you choose to live in the suburbs of Tokyo, your grocery expenses are likely to be considerably lower.
Other Costs
Just like anywhere, there are various other costs, e.g., utilities, telephone, internet, transportation, and entertainment, with so many things to do in Tokyo. Most of these costs depend on lifestyle and can be kept in check with careful planning and work. The good news is that, unlike in many countries, the to-and-fro transportation cost between home and office is borne by the employer in Japan.
Although Tokyo is known for its high cost of living, it is still possible to manage on a modest budget. You can enjoy a comfortable lifestyle in this vibrant city with careful research and planning. In fact, unlike the common belief, you may find the cost of living in Tokyo to be more affordable than in many metropolitan areas of other developed countries.
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