Is Tokyo Expensive?

Concrete jungles to beautiful nature, Japan has a lot to treat the eyes. However, business-wise and job prospectuses-wise, it’s impossible to ignore Tokyo. After all, this most populated city in the world is also the largest urban economy in the world by gross domestic product. So, there are high chances that a foreigner heading to Japan, may end up in Japan, sooner or later.

Because of it's reputation as one of the most expensive cities in the world for foreign expats, you may be wondering about the cost of living in Tokyo, if you plan to move here.

In 2020, Tokyo was ranked as the third most expensive city in the world on Mercer’s Cost of Living Rankings. Although Tokyo is so expensive wages across all industries are low in Japan compared to other countries, therefore living in Japan can seem more expensive. Rent takes up a large portion of living costs. Next comes transportation and entertainment, living only a small portion of your paycheck left for savings. After paying rent, a single person living in Tokyo can survive on about 100,000 yen a month however, living costs will differ depending on your salary, and living conditions. Below we put together a general guide on the cost of living in Tokyo to better plan for your move to Japan. 

Housing Costs

There are many types of accommodations available to foreigners in Tokyo. For expats who are staying for a short period, there are fully furnished and serviced accommodations available. They’re usually larger and more expensive than typical Japanese apartments, and they’re meant to accommodate high-earning working professionals on business trips. Share houses have recently grown in popularity due to the emphasis on community, and the possibility of interacting with Japanese natives. Share houses like Sakura House and Oak House are popular among foreigners in Japan due to their low cost and convenient locations.

Foreigners are also able to rent apartments in Japan if they’re like to stay for a longer duration. Depending on the company you come with, there’s a possibility to have your rent subsidized. The price of rent can vary depending on the type of housing, its location, age, size, and amenities. Rent is usually higher in the center of the city, especially along the Yamanote Line. Shinjuku ward has the largest number of foreign residents followed by Toshima, Arakawa, Adachi, Minato, and Edogawa ward.  

The average cost of rent across Japan, for a one-room apartment (20-40sqm), is between 50,000 and 70,000 yen. Apartments are typically not furnished and do not include utilities. Utilities you need to pay for are gas, water, and electricity—electricity is usually the most expensive of the three. There are some low-cost apartments available to foreign expats. LeoPalace is well known for providing comfortable apartments for foreign residents and they offer services in English and Japanese. 

Moving Costs

The cost of moving can be pretty high in Japan since you normally have to pay a fees upfront which can cost you about 5-6 months of rent. You can use a real estate agent (fudousan or 不動産)to help search for apartments within your budget. Many real estate agents in Tokyo speak English and work with foreigners. They’re a great help to smooth over the process of communication between tenets and the landlord. 

Move-in costs usually require a security deposit (shikikin or 敷金), agency fee, guarantor fee, maintenance fee, key fee, insurance, and key money (reikin or 礼金). Newcomers to Japan might be unfamiliar with the key money fee. It’s a non-refundable gratuity present made to the landlord as a thank you gift for them allowing you to live on their property. Requiring key money became popular after the Great Kanto Earthquake when people who were able to pay extra money up front were able to secure housing quicker. Some places don’t require key money but they are a little difficult to find, so we suggest you come prepared to pay that fee. All renters are required to have a guarantor (rentai hoshounin or 連帯保証人) who is financially liable in case a renter fails to pay rent or make the necessary repairs on their apartment. This can be a family member or any person you know in Japan. However, if you aren’t able to find someone some companies can act as a guarantor (hoshougaisha or 保証会社). 

Where to Live in Tokyo 

The Tokyo metropolitan area is quite expansive. There are 23 wards in central Tokyo, then several smaller towns outside of the center that stretch far out north, south, east, and west. It can be difficult to choose the best location, here is a guide on the most expensive and affordable areas of Tokyo to consider. 

The Most Expensive Areas of Tokyo 

The most expensive areas of Tokyo are going to be closest to the central area with access to the major JR lines. They’re also going to be in more commercial areas, with a reputation for being stylish, sophisticated, and artistic. Daikanyama, Hiroo, Azabu, and Nakameguro are some of the most expensive places to live in Japan. These areas have a lot of picturesque scenery and are well-known for their upscale restaurants, high-rise buildings, shopping districts. Azabu is particularly popular among foreign residents since this is where you’ll find many of the foreign embassies and diplomats in Japan. Rent in this area starts at around 120,000 for a single-room apartment. 

The Most Affordable Areas of Tokyo

While it is possible to find affordable housing in central Tokyo, foreign residents often opt for cheaper and often larger housing further away from the center. Although the most expensive areas tend to be on the upscale side, that doesn’t mean the more affordable places of Tokyo aren’t just as charming. Many of the cheaper areas of Tokyo are known for their historical landmarks, eccentric festivals, and proximity to more international food. Nishi-Kasai, Sugamo, and Takadanobaba are all considered affordable areas for single renters. Rent can be as low as 39,000 yen for a single studio apartment and you still have access to the main train lines. If you don’t mind traveling a bit of way to get to the center, neighborhoods in western Tokyo such as Koenji, Shimokitazawa, and Setagaya have all become popular due to their unique charm and cheap living costs. In case you do not mind a longer Commute, you can make the cost of living more affordable by living in Chiba or Saitama, or Kanagawa.

Tokyo is a very expensive city, but it’s not impossible to make a living here on a minimum wage. With a little research and proper budgeting, you’ll still be able to live nicely in this beautiful city.