With house- or flat-sharing relatively uncommon in Japanese culture, students and young professionals create strong demand for compact studio and one-bedroom apartments. Targeting the lower end of the rental market, units in Tokyo range from extremely cramped studios of less than 100 sq ft, up to units of around 200 sq ft. These are predominantly found in low-rise wooden apartment buildings owned by local individuals or businesses.

The mainstay of the single-occupier rental market are studio and one-bedroom units of between 200 sq ft and 350 sq ft. Convenience is key to their success and such properties are commonly situated less than a five-minute walk from the nearest train station, with good access to major commercial hubs. Many units in this size range are located within modern mid- to high-rise reinforced concrete apartment blocks, and while tenant turnover can be reasonably frequent (standard leases are two years) occupancy rates remain high.

Reflecting strong demand, achievable rents per sq ft for compact single-occupier units are, on average, higher than larger two-bedroom or family-type units. Consequently, property owners are generally real estate companies or institutional investors purchasing en-bulk, or private investors seeking stable yield returns.

Given the high costs involved in owner occupation, Japanese professionals generally wait until after marriage to purchase a property for their own use. The majority of apartments for sale tend to be located in more peripheral locations, where lower land prices can provide more space for less money and the environment is better suited for raising children, including access to parks and schools. Like the rental market, units under 350 sq ft are often located in sought-after locations with convenient access to public transport. Pricing per sq ft is therefore, again, on average higher than units in the larger 350 sq ft to 900 sq ft size band.

Taken from
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