Why some older homes in Japan are surprisingly undervalued

Adam German
Jul 10
3 min read

Why well-maintained older homes are often overlooked - and how buyers can spot hidden value in Japan’s resale market was the topic of a June 30^th Nikkei Shimbun article.

What Makes a Property Undervalued?

Buying a home below market value is a common goal - but in Japan’s real estate market, it’s easier said than done. Prices are largely shaped by supply and demand, and truly “cheap” listings tend to sell fast or never appear publicly at all.

Yet some properties - particularly existing single-family homes (SFH) - slip through the cracks. In areas where market pricing isn’t well-calibrated, opportunities can arise for buyers who know what to look for.

Why the Building Condition Is So Often Overlooked

Property values are typically driven by three major factors:

Macroeconomic trends such as interest rates, taxes, and overall housing demand

Location-specific elements including proximity to transit, local amenities, and disaster risk

Property-specific conditions such as layout, size, orientation - and the state of maintenance

Among these, building maintenance is the most often overlooked. While buyers can easily assess location or layout during a viewing, structural health is harder to judge.

Yet it’s critical. Problems like water leaks, termite damage, or decay in beams and pillars can dramatically reduce a building’s lifespan.

These issues often lie beneath the surface and don’t show up in listing photos - so they rarely influence price. As a result, two homes of the same age may be valued the same, even if one has been meticulously maintained while the other has been neglected.

That disconnect is where bargains can be found.

The Power of Maintenance Records

So how can buyers assess the true condition of a home?

The most reliable method is a home inspection (known as a building condition survey), conducted by a licensed expert. These professionals identify deterioration, advise on necessary repairs, and estimate future maintenance costs.

Home inspections are a relatively new concept in Japan when compared to other G7 nations but are becoming increasingly common in real estate transactions, and are especially beneficial for existing SFH sales.

Unlike high-rise condos, where professional management companies typically carry out long-term repair and maintenance plans set by the homeowners' association, single-family homes rely on individual owners - who may or may not have kept up with proper maintenance over time.

Home inspection sample video. Japanese language audio but the auto-generated English language subtitles are understandable. Open the Settings Menu (gear icon at bottom of play window) -> Subtitles -> Auto-Translate -> English.

The benefits for both buyers and sellers aside, each inspection can cost roughly ¥100,000 to ¥150,000 per property an upwards - making it impractical to commission an inspection for every property you view.

That’s why it’s important to ask sellers about the home’s maintenance history before investing in an inspection.

Buyers should look for clear records - such as quotes or completion reports - for recent work like:

Roof and exterior waterproofing
Anti-termite treatments
Structural repairs

If a home has undergone this kind of upkeep in recent years, it’s a strong sign that the building is in good shape - and that a single inspection may be sufficient.

Home Inspections Work in the Seller’s Favor Too

If you’re an existing single-family homeowner preparing to sell, arranging a home inspection before listing can work in your favor. Providing buyers with a ready-made, third-party report builds confidence, adds transparency, and may reduce their ability to negotiate the price down if the report says the structure is in tip-top shape.

Related content: You're better off knowing than not. Get a free Patience Realty market appraisal for your Tokyo condo, single-family home, multi-family building or land.

It also helps you stay ahead of potential issues. If significant problems are discovered later during a buyer commissioned inspection, it could delay or derail the sale. Addressing issues in advance helps keep the process smoother and more predictable.

Quick Checks You Can Do Yourself

Even in the absence of detailed records, buyers & homeowners can make basic observations to gauge condition:

Are there large cracks in the foundation or exterior walls?

Do the ceilings show any signs of water damage or discoloration?

Is there a damp or musty smell in the crawlspace or in any other area of the home?

These simple checks can offer a minimum level of insight before committing to a professional inspection.

Don’t Let Age Fool You

In Japan’s existing SFH market, value isn’t always visible. Many well-maintained homes are unfairly devalued simply because of their age. As a result, some of the best-quality homes are overlooked by buyers focused only on year-built data.

But with the right combination of seller transparency, documented upkeep, and targeted inspections, buyers can uncover homes that are healthier, safer, and longer-lasting than their prices suggest.