According to a recent study, mortgage loans designed specifically for couples are on the rise as prices for newly built condominiums in the greater Tokyo area soar and the number of dual-income households increases.
So-called couple loans, i.e. two separate loans to cover the costs of purchasing a property, are particularly popular with young couples, as they can borrow larger sums than if they were to take out a loan individually.
According to human resources group Recruit Holdings Co., married people with couple loans accounted for 33.9 percent of contracts for new condominiums in and around the capital in 2023, the highest share since the study began in 2018, while single mortgage holders accounted for 65.0 percent.
Photo taken from a Kyodo News helicopter on June 26, 2024 shows a cluster of condominiums in Tokyo’s Harumi district. (Kyodo) ==Kyodo
The average purchase price for a condominium in the greater Tokyo area was a record 60.33 million yen ($410,000), up 1.43 million yen from 2022, while the average amount of money borrowed was 52.35 million yen, up 2.72 million yen.
The trend was also observed in the Tokai and Kansai regions in central and western Japan, respectively.
Couple loans were chosen more often by people in their twenties and thirties than by other generations, at 16.5 percent and 18.6 percent, respectively, compared to an average of 10.8 percent for all borrowers, according to a study conducted in January 2024 by a research institute of Sumitomo Mitsui Trust Bank.
“There are more people who want to own real estate on an equal basis with their partner as more women work full-time,” says financial planner Sakura Takeshita.
However, problems can arise with a couple’s loan if one of the couple’s income drops drastically due to unforeseen circumstances. Home loans in Japan usually have a maximum repayment period of 35 years.
In the event of a separation, a couples loan can complicate matters as one of the parties may want to continue living in the property rather than sell it to pay off the mortgage.
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