At its September 2019 meeting, The Bank of Japan (BoJ) left its short-term interest rate unchanged at minus 0.1%. The 10-year Japanese government bond yield is also kept level, hovering around 0%. Interest rates in Japan have fluctuated greatly over the past four decades. They reached an all-time high of 9% in December 1973, and have been in a record low of -0.1% since 2016.

Earlier this year in spring, policymakers announced that “the BOJ intends to maintain the current extremely low levels of short-term and long-term interest rates for an extended period of time, at least through around spring 2020.”

The negative-rate policy has kept home loans affordable. A 10-year fixed-rate mortgage currently clocks in at around 0.65%, with Sumitomo Mitsui Trust Bank offering one of the lowest rates available, starting from 0.53%. This has stimulated the Tokyo property market, with prices in large cities finally nearing pre-bubble era territory again. In 2018, residential land prices in the greater Tokyo area rose by 1.3%.

With the announcement, the strong real estate market is expected to last — at least for now — while keeping mortgages extremely affordable.

By Mareike Dornhege

Similar to this:

Taking out a home loan: How much house can you afford in Japan?

Tax breaks for homebuyers in Japan

Obtaining finance in Japan