Cost of Living in Japan (Vs. Rest of the World)

For decades, Japan—and Tokyo in particular—had a reputation as one of the most expensive places in the world to live. However, since the recent rapid depreciation of the yen against the U.S. dollar, euro, British pound, and other major currencies, the tables have turned. Japan is now a relative bargain.

Let’s unpack just how much it generally costs to live in Japan compared to the cost of living in some other parts of the world.

Overall

While there are exceptions, Tokyo, Japan’s most expensive city, is currently a good deal.  According to the online cost-of-living index Numbeo, assuming a monthly budget of 650,000 yen (about US$4,300) per month in Tokyo, you would need to spend the following in each of these cities to maintain the same standard of living (assuming you rent in both places):

• vs. London:  1,163,650 yen ($7,700)
• vs. New York:  1,551,000 yen ($10,250)
• vs. Paris:  930,800 yen ($6,200)
• vs. Sydney:  1,027,900 yen ($6,800)

These assumptions are based on the following average monthly net salary (after-tax take-home pay):

• Tokyo (base):  417,000 yen ($2,800)
• London:  609,000 yen ($4,000)
• New York:  889,000 yen ($5,900)
• Paris:  467,000 yen ($3,100)
• Sydney:  581,000 yen ($3,800)

Of course, it is always a good idea to triangulate available facts whenever possible. In addition to Numbeo, another similarly reliable online resource is Expatistan, which also tracks a wide range of prices in different cities around the world.

Housing

Housing expenses are typically the largest expense for most people and include rent or mortgage payments, property taxes, utilities (electricity, gas, water, and garbage collection), and homeowner’s insurance (if applicable).

Rent

First, the old saying about real estate, “location, location, location” is certainly true and will have an outsized impact on the cost of a particular property.  The available size of detached houses and apartments in the central districts can be quite small, especially if you are on a budget. 

When we say “small,” we are talking about an apartment that may be no more than 80 square meters (approximately 860 square feet), which may be much less space than you are used to.  On the one hand, you would be lucky to find something like that, but a 200 square meter apartment would come at a considerable premium.

That said, Tokyo is now generally considered less expensive to rent than London, New York and Paris. Sydney can vary depending on the specific location, but overall can be slightly more expensive than Tokyo.

Assuming a monthly budget of 390,000 yen (about US$2,600) for a 3-bedroom apartment in central Tokyo, you would need to spend more in each of the following cities to rent a similar apartment:

• vs. London:  803,000 yen ($5,300)
• vs. New York:  1,242,000 yen ($8,200)
• vs. Paris:  503,000 yen ($3,300)
• vs. Sydney:  669,000 yen ($4,400)

Condominium Purchase Price

Assuming a similarly sized downtown property costs 1,150,000 yen (about $7,600) per square meter in Tokyo, you would need to spend more money in each of the following cities to buy a similar apartment (pricing per square meter):

• vs. London:  2,634,750 yen ($17,400)
• vs. New York:  2,558,500 yen ($16,900)
• vs. Paris:  1,957,700 yen ($12,900)
• vs. Sydney:  2,480,500 yen ($16,400)

Mortgage Payments

Given the relatively low interest rates available for home purchases in Japan (e.g., 1.65% for a 20-year fixed-rate mortgage), mortgage payments will generally be significantly lower, even for properties in Tokyo.

Property Taxes

While rates can vary depending on effective tax rates and assessed property values, in general, Tokyo tends to have the lowest property tax rates among these five cities.  Sydney and Paris generally fall in the middle range.  New York and London tend to have the highest property tax rates.

Utilities

While there are a few exceptions to the rule, Tokyo remains a relative bargain for the time being.

Assuming 27,800 yen ($184) per month to cover the cost of electricity, heating, cooling, water and garbage collection for an 85 square meter apartment in Tokyo, you would need to spend the following amounts for the same services:

• vs. London:  53,700 yen ($355)
• vs. New York:  25,400 yen ($168) 🡪 Curiously, a relative bargain!
• vs. Paris:  33,900 yen ($224)
• vs. Sydney:  32,100 yen ($212)

Mobile Telephone

Assuming 3,890 yen ($26) per month to cover the cost of a routine monthly plan with calls and 10GB+ of data in Tokyo, you would need to spend the following amounts for the same package:

• vs. London:  2,900 yen ($19) 🡪 Curiously, a relative bargain!
• vs. New York:  9,300 yen ($61)
• vs. Paris:  3,000 yen ($20)
• vs. Sydney:  4,000 yen ($26)

Internet

Assuming 4,900 yen ($32) per month to cover the cost of a routine monthly plan for 60 Mbps or more, unlimited data, cable/ADSL in Tokyo, you would need to spend the following amounts for the same package:

• vs. London:  6,000 yen ($40)
• vs. New York:  10,600 yen ($70)
• vs. Paris:  5,000 yen ($33)
• vs. Sydney:  8,300 yen ($55)

Fire Insurance

These costs are highly dependent on location and many other factors, making it difficult to make accurate comparisons.  In Japan, fire insurance (sometimes called homeowner’s insurance) is mandatory throughout the country. 

While earthquake insurance is an optional rider to such policies, it is generally a good idea to purchase this inexpensive additional coverage.

Food

As the old saying goes, “you gotta eat.”  Right now, Tokyo foodies are feeling no pain!

Groceries:  Even when examining the prices of a few representative items, Tokyo remains relatively inexpensive.

Bread:  Assuming 265 yen ($1.75) for a 500 gram loaf of fresh white bread in Tokyo, you would need to spend the following:

• vs. London:  292 yen ($1.93)
• vs. New York:  715 yen ($4.73) 🡪 Crazy!
• vs. Paris:  298 yen ($1.97)
• vs. Sydney:  428 yen ($2.83)

Chicken:  Assuming 1,037 yen ($6.85) for a 1 kg fillet of chicken in Tokyo, you would need to spend the following:

• vs. London:  1,461 yen ($9.65)
• vs. New York:  2,453 yen ($16.20) 🡪 Crazy!
• vs. Paris:  2,360 yen ($15.59)
• vs. Sydney:  1,285 yen ($8.49)

Potatoes:  Assuming 440 yen ($2.91) for a 1 kg bag of potatoes in Tokyo, you would need to spend the following:

• vs. London:  232 yen ($1.53) 🡪 Curiously, a relative bargain!
• vs. New York:  644 yen ($4.25) 🡪 Crazy!
• vs. Paris:  360 yen ($2.38)
• vs. Sydney:  373 yen ($2.46)

Eating out:  Assuming a 7,500 yen (about US$50) three-course lunch or dinner for 2 people at a mid-range restaurant in Tokyo, you would need to spend more money in each of the following cities to purchase a similar meal:

• vs. London:  15,300 yen ($101)
• vs. New York:  19,700 yen ($130)
• vs. Paris:  11,500 yen ($76)
• vs. Sydney:  12,800 yen ($85)

Transportation

This covers the cost of getting around, including car payments, gas, public transportation fares, car insurance, and maintenance.

Public Transportation: Assuming a 200 yen ($1.32) one-way subway ticket in Tokyo, you would need to spend more money in each of the following cities to travel the same distance by public transportation:

• vs. London:  534 yen ($3.53)
• vs. New York:  439 yen ($2.90)
• vs. Paris:  344 yen ($2.27)
• vs. Sydney:  493 yen ($3.26)

Tokyo’s extensive subway network is often not only the fastest way to get around the city, but it is also much less expensive than the cost of riding the metro, the tube, or other underground rail network in other major cities around the world.

Car-related Expenses:  Owning and operating a car in any of these five major cities is essentially a discretionary expense, as public transportation is a much cheaper option for getting around town.

Purchasing a New Car:  Assuming 2,407,000 yen ($15,900) for a new Toyota Corolla sedan in Tokyo, you would need to spend the following to purchase an equivalent vehicle:

• vs. London:  5,008,000 yen ($33,000) 🡪 Crazy!
• vs. New York:  3,917,000 yen ($25,900)
• vs. Paris:  4,874,000 yen ($32,200)
• vs. Sydney:  3,356,000 yen ($22,200)

Gasoline:  Assuming 173 yen ($1.14) for a liter of gasoline in Tokyo, you would need to spend the following to fill up your tank:

• vs. London:  288 yen ($1.90)
• vs. New York:  153 yen ($1.01) 🡪 It helps to be world’s largest producer of oil!
• vs. Paris:  309 yen ($2.04) 🡪 Crazy!
• vs. Sydney:  204 yen ($1.35)

By the way, for all those Americans who are used to calculating the price of gasoline in gallons, the equivalent price of a gallon of gasoline is as follows:

• Tokyo:  655 yen ($4.33)
• London:  1,090 yen ($7.20)
• New York:  153 yen ($3.82)
• Paris:  1,170 yen ($7.73) 🡪 Probably not too many SUVs on the road here!
• Sydney:  772 yen ($5.10)

The cost of used cars offers even more value in Japan.  Car insurance also tends to be inexpensive in Japan.  While the cost of parking may be free or negligible in rural Japan, it can really add up in central Tokyo. 

Also, don’t forget that when you buy a car in Japan, you must prove to the police that you have a place to park your new vehicle. 

Finally, highway tolls in Japan tend to be very high – especially compared to the “freeways” of California.  However, the highway authorities tend to keep Japan’s roads in very good condition thanks to routine maintenance.

Taxis and Ride-Share:  Assuming an initial cab fare of 500 yen ($3.30), which increases after a certain incremental distance, in Tokyo, you would need to spend more money to travel the same distance by taxi in each of the following cities:

• vs. London:  763 yen ($5.04)
• vs. New York:  756 yen ($4.99)
• vs. Paris:  1,023 yen ($6.76) 🡪 Crazy!
• vs. Sydney:  790 yen ($5.22)

Uber and other ride-sharing services tend to charge a premium in Tokyo, due to regulatory restrictions and an apparent strategy to pursue passengers who want a value-added experience rather than just an economical way to get from point A to point B.

Alternative, Low-Cost Options:

No joke-if you really want to save money (and stay in shape), why not just walk or ride a bike?  It won’t cost you a thing!  Scooter rental is, moreover, now an option in most major cities in Japan, and it’s cheap.

Healthcare

Thanks in large part to the country’s mandatory national health insurance program, which even covers dental care, managing healthcare costs in Japan is a relative bargain.

The United States has by far the highest healthcare costs compared to Japan, the United Kingdom, France and Australia.  These countries all have universal healthcare systems funded by taxes or social security contributions.

Co-payments, or the portion of medical costs that the patient is responsible for paying, depend on several factors in Japan:

Patient Age:  Co-pay rates vary depending on your age group.

• Children (under 6): Typically have the lowest co-pay rate, around 30%.
• Adults (18-69): Standard co-pay rate is 30%.
• Elderly (70+): Co-pay rates can be 10% or 20% depending on when you turn 70 and your income level.

High-Cost Medical Care Benefits:  Japan has a system to help people cope with high medical bills. If your out-of-pocket expenses exceed a certain amount per month, the government will pay a portion through the High-Cost Medical Care Benefits program. This significantly reduces your out-of-pocket costs.

Specific Procedure:  The base cost of the procedure itself can influence the co-pay amount.

Childcare and Education

While there are not enough daycare centers in some parts of Tokyo and competition to get your child into one is fierce, for the most part, Japan ensures that its citizens and foreign residents have access to quality childcare at a reasonable cost.

While there are not enough daycare centers in some parts of Tokyo and competition to get your child into one is fierce, for the most part, Japan ensures that its citizens and foreign residents have access to quality childcare at a reasonable cost.

Preschool and Kindergarten:  Assuming an annual tuition of 79,800 yen (about US$530) per child in Tokyo, you would need to spend more annually in each of the following cities for a similar program:

• vs. London:  351,650 yen ($2,325)
• vs. New York:  455,900 yen ($3,000)
• vs. Paris:  125,500 yen ($830)
• vs. Sydney:  305,000 yen ($2,000)

International Elementary School Education:  Assuming a full-day, private school monthly fee per child of 2,267,000 yen (approximately US $15,000) in Tokyo, you would need to spend more money in each of the following cities for a similar program:

• vs. London:  3,826,000 yen ($25,300)
• vs. New York:  9,571,000 yen ($63,300) 🡪 Crazy!
• vs. Paris:  2,564,000 yen ($16,950)
• vs. Sydney:  2,585,000 yen ($17,100)

Public school, of course, would be significantly less expensive in all five cities.

Discretionary Spending

The degree to which you can maintain a frugal lifestyle and only splurge occasionally can, of course, greatly affect how much discretionary items impact your household budget.

Clothing:  Although fast-fashion brands offer some relief from high prices, Japan is still a steal.

• Pair of Jeans:  Assuming 7,970 yen ($52.65) for a pair of Levis 501 jeans in Tokyo, you would need to spend the following to get something similar:

• vs. London:  15,700 yen ($104)
• vs. New York:  10,400 yen ($68.70)
• vs. Paris:  15,300 yen ($101)
• vs. Sydney:  11,600 yen ($76.63)

Summer Dress:  Assuming 5,630 yen ($37.19) for a summer dress purchased at a chain such as Zara or H&M in Tokyo, you would need to spend the following to get something similar:

• vs. London:  7,624 yen ($50.37)
• vs. New York:  6,873 yen ($45.40)
• vs. Paris:  6,674 yen ($44.09)
• vs. Sydney:  10,261 yen ($67.78)

Movie Ticket:  Assuming a ticket price of 1,900 yen (about US$12.55) for an internationally released movie in Tokyo, you would need to spend more money to see the same movie in each of the following cities:

• vs. London:  2,861 yen ($18.90)

• vs. New York:  2,989 yen ($19.75)
• vs. Paris:  2,210 yen ($14.60)
• vs. Sydney:  2,369 yen ($15.65)

At these prices, even in Tokyo, you might be better off just waiting for the same movie to come out on Netflix.

Gym Membership:  Assuming a monthly fee of 8,835 yen (about US$58.38) for a fitness club with amenities in Tokyo, you would need to spend about the more money for a monthly gym membership in the following cities except Paris, which seems to offer value-for-money:

• vs. London:  9,285 yen ($61.35)

• vs. New York:  19,154 yen ($126.57)
• vs. Paris:  6,300 yen ($41.63) 🡪 Somewhat of a bargain!
• vs. Sydney:  9,979 yen ($65.94)

Now, there are many other cheaper gyms in all five cities, but they do not offer as many perks.  Of course, there is always the great outdoors, which is still free!

Cigarettes:  Assuming 600 yen (about US$3.96) for a 20 pack of Marlboro cigarettes in Tokyo, you would need to spend much more to light up in the following cities:

• vs. London:  2,861 yen ($18.91)

• vs. New York:  2,572 yen ($17.00)
• vs. Paris:  1,964 yen ($12.98)
• vs. Sydney:  4,589 yen ($30.33) 🡪 Assuming there are any Australian smokers left, it seems that the Australian government must rely on cigarette sales to fund half of its annual budget!

Perhaps the Japanese government should seriously consider increasing its revenue by doubling or tripling cigarette taxes!

Conclusion

Based on the evidence presented in this article, Tokyo is currently a real bargain compared to other major cities around the world. The cost of housing, food, transportation, healthcare, childcare, and education in Tokyo is generally lower than in London, New York, Paris, and Sydney.

While Japan’s inflation rate has been relatively modest compared to other major economies, it is slowly pushing the prices of goods and services.

For those considering a move to Tokyo or simply planning a visit, now may be an excellent time to take advantage of the city’s relative affordability. Get in now while almost everything seems cheap!