Free word search
Category
2026 Rental Increases: Rent Renewal Trends and Tenant Responses
2026.04.30
.png)
Rising construction costs driven by the weak yen and higher material prices have pushed up the prices of newly built condominium units. As a result, demand for second-hand properties and rental housing has increased, leading to a continued upward trend in rents.
In this article, we focus on rent renewals, outlining current market trends and key points to consider at the time of renewal.
Why Rents Continue to Rise and Key Points in Negotiation
The rise in rents, particularly in urban areas, is not driven by demand alone. Higher construction costs caused by factors such as currency depreciation directly translate into increased repair and equipment expenses borne by property owners. In addition, land prices have continued to rise in recent years, resulting in higher assessed values for fixed asset taxes.
To offset these growing costs, more property owners are choosing to raise rents at the time of contract renewal or when signing new lease agreements.
While rent increases are becoming an industry-wide trend, they can place a significant burden on tenants, often making negotiations difficult and prolonged.
Strategies for Property Owners and Management Companies at Renewal Time
For tenants, the biggest point of resistance is seeing their rent increase compared to when they first moved in. Raising rents for new tenants is generally less problematic, as they agree to the rent with full awareness from the outset. However, setting rents significantly above the local market rate can result in difficulty attracting tenants, so caution is required.
From a property owner’s perspective, reducing vacancy rates is critical. Proposing a rent increase at renewal that leads to a tenant moving out should be avoided whenever possible. For example, if a tenant renews during a low-demand season and decides to leave due to a rent increase, it may take considerable time to secure a new tenant. In such cases, maintaining the current rent may result in higher overall income than raising it.
Therefore, when implementing rent increases, minimizing the risk of tenant turnover is essential. The key lies in maintaining and improving tenant satisfaction, ensuring residents feel that the property is still worth staying in despite higher rent.
What Conditions Allow Tenants to Feel Secure Staying Long-Term?
Some tenants may find rent increases difficult to accept, even when justified by rising prices and broader economic conditions. One effective approach is to enhance or upgrade facilities in exchange for higher rent.
For example, installing parcel lockers can be done at relatively low cost. Upgrading communal mailboxes to larger, lockable units that accommodate online shopping deliveries is another cost-effective improvement. For tenants who are rarely home during the day, parcel lockers are often a must-have feature. Their installation also allows the property to be listed under additional equipment categories on rental platforms, helping attract a wider range of prospective tenants.
In response to growing demand for security, owners may also consider installing security cameras, upgrading to TV monitor intercoms, or adding auto-lock systems at building entrances. These features are frequently listed as essential requirements by tenants, making them highly cost-effective investments from a long-term perspective.
Another option to reduce the tenant’s financial burden is to offset rent increases by lowering renewal fees.
As an alternative approach, an increasing number of owners are choosing fixed-term lease contracts instead of standard lease agreements to enable smoother rent adjustments at renewal. While re-contracting is possible under fixed-term leases, rent can be reset at that time, making it easier to respond to market fluctuations. For properties near universities or in areas where tenant turnover every few years is common, this can be a viable option worth considering.
Related Articles
