Why Japanese houses depreciate: prices by building age

The short answer

Japanese buildings lose value with age far faster than in most Western markets; Japanese land does not follow that rule. In closed sales reported to MLIT for 2021–2025, a second-hand condo in Tokyo’s five central wards sold for a median ¥1,833,333/m² when 0–5 years old, ¥1,350,000/m² at 11–20 years and ¥850,000/m² at 41 years or more (-54%). In Fukuoka City the oldest band is -68% against the newest; in central Kyoto -63%.

Four things drive this: a tax system that writes a wooden house off over 22 years and a reinforced-concrete one over 47 years; two step changes in the building code (1981 and 2000) that make older stock harder to finance and insure; a long habit of scrap-and-build; and, until 2022, a mortgage-deduction rule that excluded older homes by age. Detached houses behave differently because most of the price is land: in central Tokyo a 21–30-year-old house still sells at -4% of the per-m² land price of a new one.

Price per m² by building age: condos

Median closed price per m² of second-hand condos (中古マンション等, price ÷ private floor area) by age at the time of sale, 2021–2025 combined. Age = year of sale minus year of completion. In brackets: number of sales and the change versus the 0–5-year band. Only closed prices reported by brokers are used; a cell with fewer than 20 sales would be left blank.

Tokyo five central wards = Chiyoda, Chuo, Minato, Shinjuku, Shibuya (21,649 sales with a known build year). Kyoto four central wards = Kamigyo, Nakagyo, Shimogyo, Higashiyama. Pooling five years mixes the 2021 and 2025 price levels, so the absolute figures sit below today’s; see Tokyo prices for annual numbers. Older bands also contain smaller units and different locations, so the gap is not pure age.

Note the shape: in Tokyo the curve is gentle until about 30 years and then drops sharply. The 41+ band is dominated by buildings completed before the 1981 code change; our earthquake and flood risk page shows that when buildings of similar age on either side of 1981 are compared, the pure “old-code” discount is only around 5–15%, so most of the fall is age itself. In Fukuoka and Kyoto, where land is cheaper and the building is a larger share of the price, depreciation is steeper and starts earlier.

Detached houses: the land stays

For houses (宅地(土地と建物)) MLIT reports price ÷ land area, which is the figure Japanese valuers use because the building is often carried at little or nothing. Same period and method.

554 Tokyo and 776 Kyoto house sales with a known build year. Fukuoka houses are not in our download (condos only). Central-Tokyo house sales are few per band; read the 31–40 band (n=36) as indicative.

In central Tokyo a house 41 years or older still fetches -41% versus the per-m² price of a brand-new one; in Kyoto -52%. The usual reading is that an old house is traded as land with a tear-down on it: the buyer pays roughly the land value, sometimes minus demolition. That is a rule of thumb, not a law: a well-kept or architect-designed house, or a Kyoto machiya, can carry real building value, and a house on a plot that cannot be rebuilt (see the akiya page on 再建築不可) can be worth less than “land value”.

The tax rule: 22 years for wood, 47 for concrete

The National Tax Agency’s depreciation overview (No.2100) states that statutory useful lives are set in the appendix tables of the Ministry of Finance ordinance on useful lives of depreciable assets (減価償却資産の耐用年数等に関する省令). Its summary table of main assets gives, for buildings used as housing:

These lives were written for business accounting, but they shape prices in three ways. Banks lean on remaining useful life when setting loan terms, so a 25-year-old wooden house is hard to finance over 35 years. Investors can only deduct building cost over the remaining life, which makes new buildings more attractive on paper. And appraisers’ cost approach starts from the same tables. For a home you live in, the NTA applies a gentler schedule when you later sell: the building’s acquisition cost is reduced using a life of 1.5× the business life (No.3261 gives yearly rates of 0.031 for wood and 0.015 for reinforced concrete, applied to 90% of the building cost), so a wooden home is written down over about 33 years for capital-gains purposes.

1981 and 2000: the building-code cliffs

• 1 June 1981 — the “new seismic standard” (新耐震基準). Buildings whose permit was issued on or after this date must be designed not to collapse in a major earthquake, not just to survive a moderate one. Buildings permitted before are “old-code” (旧耐震). Because the MLIT data carry the completion year, buildings completed in 1982–83 may be either.
• June 2000 — the “2000 standard”. A further revision aimed at wooden houses: ground surveys for foundations, specified metal connectors at joints, and balanced placement of load-bearing walls. For wooden houses the market treats 2000 as a second cliff.
• The code dates matter for money, not just safety: older buildings cost more to insure against earthquakes, may be refused by some lenders, and were excluded from tax relief (next section).

Ward-by-ward hazard maps and the share of old-code stock are on Tokyo earthquake and flood risk by ward.

Mortgage deduction: the age limit is gone, the 1982 line remains

Japan’s mortgage tax credit (住宅借入金等特別控除) used to shut out older homes by age. For homes occupied from 2022 onward, the NTA’s page No.1211-3 states the condition for an existing home as: built on or after 1 January 1982 (昭和57年1月1日以後に建築されたもの); otherwise the home must be certified as meeting the seismic standard, for example by a 耐震基準適合証明書 issued by an architect after an inspection completed within two years before purchase. In practice this moved the market’s line from a fixed age to “1982 or later”, which is one reason the 41+ band in our table falls away so sharply. Non-residents do not normally qualify for the credit anyway; see property tax for foreigners.

What it means if you buy

• Separate land from building in your head. Ask the broker for the assessed value split (固定資産税評価額) and for the land price per m² in the area.
• Yield and depreciation are linked. Older buildings show higher gross yields partly because the price already assumes further decline; see rental yield by ward.
• Age bands move with you. A 15-year-old Tokyo condo bought today will be in the 21–30 band when you sell in ten years; in our data that band is -7% versus 11–20 years, before any market move.
• Resale value is set by the next buyer’s financing. Pre-1982 stock and wooden houses past 22 years face a smaller pool of financeable buyers.
• Depreciation is not universal. Well-managed concrete buildings in prime locations hold value; central Tokyo prices rose strongly in 2021–25 across all ages (price history).

FAQ

Sources

1. MLIT Real Estate Information Library, transaction-price data, closed prices reported by brokers (成約価格情報), 2021–2025, downloaded 29 September 2026: reinfolib.mlit.go.jp. Age = sale year minus completion year; medians by band with at least 20 sales; our file data/depreciation-by-age.json, method on about.
2. National Tax Agency, No.2100 減価償却のあらまし (useful lives are set in the appendix tables of the ordinance 減価償却資産の耐用年数等に関する省令): nta.go.jp; its table of main assets (PDF: wood/synthetic resin residential 22 years, wood-frame mortar 20, reinforced concrete residential 47): 2100_01.pdf (checked 7 October 2026)
3. National Tax Agency, No.3261 建物の取得費の計算 (non-business buildings: 1.5× useful life; rates 0.031 wood, 0.015 reinforced concrete; law as of 1 April 2026): nta.go.jp (checked 7 October 2026)
4. National Tax Agency, No.1211-3 中古住宅を取得し、令和4年以降に居住の用に供した場合（住宅借入金等特別控除） (built on or after 1 January 1982, or seismic certificate from an inspection within two years): nta.go.jp (checked 7 October 2026)
5. Seismic code dates (1 June 1981 new standard; June 2000 revision for wooden houses) and the old/new split in the MLIT data: see our Tokyo earthquake and flood risk page.