Japan Shows the Way to Affordable Megacities (2014)
nextcity.org
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Everywhere in the world salaries, rents and prices go hand in hand. Unless you're living on one side of a border and working on the other side (which is possible in EU) which allow you to game the system, rents and prices are based on supply and demand. Don't take it personally, but it does not make much sense to compare what you would get with a salary from one country while living in another country.
But ... it's not like low-skilled workers in SF are getting paid much either.
The average HN reader might be in a better negotiating position w.r.t. salaries in Tokyo
Some things to consider about Tokyo:
- No need for a car, insurance that comes with
- Your company will (in almost all cases) be paying for your daily transportation by car
- If you're willing to suffer in the morning with travel/take a bus to the train station, you have a range of prices for renting
- There are a lot of people living on low salaries, so there are a lot of services on the low end. 100 yen shops with high quality stuff, all things considered.
For 60,000 yen/month you can get 20m2 studio appartments (25-year-old buildings) within 15 minutes of stations like Nippori or Otsuka. If you follow the "1/3rd of salary" rule, it's reasonable if you're making a bit over minimum wage (not sure what the going rate for English teachers are)
SF is cherry picked, the most expensive place in the US. I live in Philadelphia and the commute time and cost is substantially lower. NYC would be the most appropriate comparison, and they get to work with nearly 20 minutes less commute.
I bring up commute because many people have long commutes because they simply cant afford to live closer.
Generally when the median is greater than the mean, it's because there's a long tail to the left dragging the mean down. I expect that the opposite is true: there is a long tail to the right, with a small number of people who have exceptionally long commutes.
So I'd expect the median to be lower, like it is for salaries.
There are a lot of people who do 90 minute+ commutes for sure. Even for relatively small commutes you end up with a fixed cost of about 20 minutes for just going to the station from your home or leaving to go to the office, so 30 minutes is good.
It's possible to live close to your office if you're willing to live far from trains a lot of the time though. Living 20 minutes from any station instead of 5 easily cuts 30% off the rent
...
If you strongly believe this is unlikely, name a neighborhood and I'll show you three apartment listings.
For larger families? I dunno. We're a family of 5 (1 in jr high, 2 in elementary) and really struggling to find a place to move up into from our current 2LDK. :(
I admit, we have a bunch of constraints, but I don't think they are too unusual. (want to be reasonably near to work, school, and in-laws)
[1] For those that don't know, apartments here are typically listed by number of rooms, plus if the space includes an "L" living room, "D" dining area, "K" kitchen. So "1K" would be a single room with a place to cook. 2DK would be 2 rooms, with an eating area and a kitchen.
I don't believe it is unlikely but I'd like to take you up on your services. ;)
Got anything for the Harajuku or Akihabara districts? You seem to be more knowledgeable on how/where to search for this info and I'm a bit lost. (Still have over a year to properly research this stuff on my own, but I really want to move to near one of those two districts next year.)
Has prices softened that much since then?
http://suumo.jp/jj/chintai/ichiran/FR301FC001/?ar=030&bs=040...
For folks who don't have the local color here: if you're willing to live in apartments sized for middle class Japanese folks, and that is a big if for many foreigners, Tokyo can be impressively inexpensive to live in. Shibuya is a very desirable and relatively centrally located neighborhood; think "SOMA" or, hmm, I don't know Manhattan that well but somewhere in Midtown maybe?
(If you optimize for commute down to the minute, prestige of building, or living space, you can end up paying a lot of money. Though even in an apartment that scores well on all three my rent is less than the median in SF.)
All salaries include public Social Security.
Engineers that'd get $300k comp offers from big5 tech here would make $80k--$150k, provided you go to a web/mobile company. If you go to an older industry you will make less.
Various finance firms on the east coast can also send recruiting e-mails, touting their >400K comp. I think the key to that one is having work experience in an investment bank, as well as at AMAPGOFA.
?
I guess Friends wouldn't have been that uplifting if it was shot in Rosses' cramped, leaky studio apartment.
That bit with the hanukkah armadillo and superman is still one of the funniest things I've seen on TV.
I'd love to move back to my native NYC, but I've been priced out forever, as the cliche goes. There are entry level people earning more than I earn as an 18-year veteran in Tokyo.
Not true. There's huge variations in OECD countries. Here's a graph showing house price to income ratio. I know this intimately because I live on the far left :'(
https://www.imf.org/external/research/housing/images/priceto...
Check r/London and look for topics like "how much of your salary are you paying on your rent?". I've seen a lot of people spending 50% up to 70% of their salary on rent.
It will move up to close to 70% if my roommate moves out in August. It's a little shocking to consider that I would actually consider paying that much to stay here. I seem to really like Midtown Atlanta that much.
Once you get used to it, it's not that bad. Out of all the things you could spend your money on, having an utterly sweet pad in the dead middle of town isn't the worst thing.
It does appear to be an optimal combination for both good wages and low cost of living in my experience having traveled and lived extensively all over the world.
The single caveat I'd make on saying this is that the way that I prefer to live might be uniquely suited to Tokyo, and uniquely unsuited to Sydney. That being; I hate commuting, I want somewhere small and comfortable but otherwise as cheap as possible to live, but as close to work as possible so I can just walk to and from every day. In Sydney working in the CBD this means you'll be stuck with some status signalling lifestyle apartment coupled with the already significant premium on rentals in general which is applicable to all Sydney real estate, and it's stupidly expensive (average 2250 - 2500. You could probably get away with a rundown roach palace for a little cheaper, but the floor on Sydney rentals in my experience is just absurdly high.
By comparison I got a no frills apartment that is perfectly useful, comfortable and serviceable within 300 meters walk to my office in Shibuya no problem at all, 1100 USD per month, and everything else on top of that with the bountiful microwave dinners, amazon, and roadside eating joints by the dozen, extremely fast and cheap internet (gigabit for < 40 USD pm) doesn't increase the price by much at all.
I did not speak any Japanese at all at the time I started, and I am slowly learning it now but don't have a lot of time to dedicate to the project. I intend to gain fluency in it eventually. Unlike many of the places in the world I've lived, I would say if you intend to comfortably exist here long term, you will need to learn the language both spoken and written. It's not like a lot of places these days where English is almost an official second language or there's extensive proficiency amongst the local population.
This is my first and only time working in Japan so I have no basis for comparison to other companies here. My impression of the culture is there can be an overemphasis on hours worked rather than output produced and the quality thereof, but they're conscious that is an issue at least where I work and they're mindful of it and try to address it. They also have things that seem strange to me as a foreigner but I am more prone to just accepting and trying to do things their way (when in rome).
All in all, I'm finding it pretty good, it definitely helps that this particular field has pretty much devoured all my energy, life and thinking since I really immersed myself in it a few years ago, so working in a global hub central location where it's really having an explosive impact on a core related piece of infrastructure is pretty much a dream job for me.
There is no tip in Japan. And 8 USD for Ramen is super expensive, in Kansai you can get ramen for 5 USD or even less. Ramen should not cost that much anyway, it's super fast to make and ingredients are super cheap too.
See http://www.seriouseats.com/2012/02/how-to-make-tonkotsu-rame...
On the other hand, most of it is presentation and perception. You can get a $5 burger as well as find a $20 burger --if you search hard enough you can find a $5 with the same quality as the $20 version --so it's not always exoticism that does the trick.
To put it another way, you can do a high end anything restaurant, but takeaway makes far more sense in a high traffic location with massive rush hours, high rents and little available space, no foot traffic after 5PM and no access after 8PM.
Enough Korean people have come to Atlanta that there is a restaurant there aimed specifically at giving Koreans a taste of home, that taste involved a completely different cuisine from both American Chinese food and Chinese Chinese food.
It wasn't Golden Buddha I hope? That place is what celebrity chef David Chang probably would charmingly refer to as "bad" Chinese food that is addictive, and it's decided not nice by any stretch of the imagination. As an out of town Atlanta Korean I'm still clueless about what most Koreans know here ITP and what's around Duluth.
Yes, they absolutely loved the Jajangmyeon. (짜장면 for those curious) I couldn't eat it.
Now that I'm thinking about it, they didn't really describe Chinese food as upscale. But more as like a treat. We're super spoiled here in America with all these different kinds of cuisines.
ITP the best Chinese restaurant IMO is Chong Qing Hot Pot in Chamblee. We had good meals at Northern China Eatery on Buford Highway, but Chong Qing is way better.
I'll edit this with the best Korean restaurant when I can get back with my roomie on where it moved to. -- edit, sorry he doesn't know himself. But the original restaurant we used to go to is called Yet Tuh. The owner got fed up with the small space and moved the staff out to the sticks.
Actually you find both: really cheap and really expensive ones. It's not about the country of origin that much.
There's commoditized Japanese in the US, and there is probably premium Thai and Vietnamese.
Ramen's becoming more popular now but it seems as if there isn't a lot of demand between 50 cent package of Ramen noodles and $15-20 quality Ramen place.
Well, some people find Olive Garden as good as a high end restaurant in Rome, so for them it's "comparable".
Nongshim Shin Black Noodle Soup, Spicy, 4.58 (Pack of 10) https://www.amazon.com/dp/B017IRZLKQ/ref=cm_sw_r_cp_apap_nz6...
Theoretically there's no reason why a quality broth can't be reduced to powder form and used with instant ramen.
> Theoretically there's no reason why a quality broth can't be reduced to powder form and used with instant ramen.
I mean .. there really are. There are all sorts of aromatics and fats that can't be properly powderized. Note that, e.g., coffee is way better in fresh form than powder form, as are a huge multitude of foods.
I think the biggest issue is that dried animal fats will significantly reduce the shelf life.
I've tried a bunch of Nongshim stuff (including that one). I think it's the best instant ramen I've tried (although I've heard there's better stuff available in Asia), but it doesn't compare to the real stuff, even if you add things to it.
Good ramen isn't that cheap or easy to prepare but the time and ingredients required to make the broth can be spread over a lot of servings.
In Sydney Australia ramen can be AUD$8-20 which is about USD$6-15. In China it's about 25-60CNY or USD$3.6-9.
For some reason ramen shops outside Japan likes to advertise about their noodles.
As for your comment about China you have to differentiate between Japanese ramen and Chinese.
Not when it's good ramen. I've bought far more expensive ramen in the US, Europe, Singapore, and other places...
"What owning a ramen restaurant in Japan is like"
Peogrammers can work remotely and make western wages in Tokyo for western companies though, and some friends have very high leverage this way.
Of course, there are things that are cheaper. If you live as Japanese as you can, you can save some money. But rent prices are very high for a normal Japanese worker. As some people here already said salaries are very low.
Average income per age range[1]: 20s：348万円 (~34k) 30s：458万円 (~45k) 40s：586万円 (~58k) 50s：721万円 (~71k)
My ~55m2 room costs about ~1800$ without electricity etc. Since the owner recently changed for new people the price went up to ~2000$ Given it's a modern 'mansion' (apartment) with nice extras, in a very good location it's still cheap (wondering why every day.) I heard SF is crazy expensive, but that's a different problem. Most people here, even in IT jobs get about 2000 dollar per month. So where can they live? They can live in some 30 years old very tiny apartment or live outside of Tokyo and drive in 1 hour or more every day. Even if you live 30 minutes away by train, most trains coming from affordable areas are packed and you have to queue up to get into one, which can extend the commute time to an hour or more[2]. If you want to go to work by car be ready to pay around 300$ per month for a parking space.
Then, say you start a family. 55m2 won't cut it anymore. 80-100m2? Very few places. Very expensive. Most rooms here are between 20-35m2 made for singles.
Anyway, this maybe sounded negative but I love this city. All things considered, it's awesome and comfortable to live here.
[1] https://doda.jp/guide/heikin/2014/syokusyu/it/ [2] Source: co-worker
You're right, it's crazy how low professional salaries are, but the city is so affordable with such a wide range of housing options that you can be a nail stylist and still live in the most central neighborhoods (granted, that stylist would probably have to move farther out to raise a family).
The beer is almost 8-10x more expensive compared to where I come from though.
You are right that most people here live and raise kids in smaller apartments. But just because this is the status quo and you don't 'need' more I wouldn't say it's good. Why should your kid have to live in a 5sqm room? I wouldn't be able to justify that for myself and would have to move outside. I think it's the mentality here, singles, for example, spend most time at work or similar so they don't mind having a tiny, affordable home. Also most Japanese (there are exceptions) normally don't invite many people to their home etc.
My rent is comparable to what I paid in USD in various areas of the SF peninsula. However, move-in costs were outrageous. I have a pet, so that increases it some, but everything here for rent is a multiplier, ie.:
- I had to put 3x monthly rent down up front for security deposits (due to pet, average is 2 months)
- Pay the first two months rent up front
- Pay the real estate agency that helps you find an apartment (pretty much required) one month rent
- Pay a "guarantor" company half a month's rent for some kind of renter's insurance I guess
If you know prices in the bay area, paying 6.5X that rent up front is pretty painful, and not being able to recoup 2.5X your rent is also kind of rough.
I'm lucky that my salary didn't shift too much (aside from currency exchange) when I moved here, but generally salaries are much lower across the board in Japan, even Tokyo.
Food is similarly priced here as SF, depending on what you choose to eat. Some meals can be considered cheap (gyudon, ramen, etc) but you have to remember portion sizes tend to be different and meals don't typically include drinks here. It's also really nice that tipping is not part of Japanese culture, since I personally find it adds a lot to the total cost when you eat out a lot (like my fat ass).
Now, to add a huge caveat to all this, you can live cheaper in Tokyo if you choose to. When I moved here, I chose to keep my lifestyle roughly the same (though I didn't buy another car or motorcycle, so there's some savings). First, if you want to live more cheaply, don't bring a pet. You can also downgrade your lifestyle a fair bit which is an interesting difference from SF. In SF, even a small studio can go for a lot of $$$, but here, you can find small studios for $500-$1500USD relatively easily (whether they accept foreigners or not is a different issue).
TL;DR: Can definitely be cheaper depending on what sacrifices you're willing to make. With no sacrifices, about the same as SF, except up front costs.
- first month's rent
- security deposit worth a month's rent
- 15% brokers fee
Admittedly, NYC is terrible with its broker stuff but switching over to Tokyo wouldn't have been that dramatic if you were coming from this coast instead.
I thought Japan was a non-tipping culture?
Then you toss banks on top and things really spiral out of control.
there is only so much land
[1] https://www.gov.hk/en/about/abouthk/factsheets/docs/populati...
In the absence of regulations limiting building height, I think 70% is unlikely to become the norm. Just physically it seems likely that you could add 1000 square feet on top of a building for something that works out to less than 10 years worth of full-time labor. Assuming you amortize that over a 30 year mortgage, that's well under 50%.
I could see a future in which land use regulations drive up the cost of housing to 70% of income. Also a future in which people work half the number of hours they do today and spend 70% of their income on housing, which is less of a nightmare scenario.
There is a point where an additional floor becomes too expensive for the math to ever work out, but it seems to me the population of the Earth would have to more than triple for it to become as bad as you suggest.
70% is unlikely considering you still have to pay utilities, bills and food on top. That would leave nothing at the end of the month.
P.S. You'll note that expenses can be a massive percentage of "lower" rents. For instance, a studio in a small city can be $500 a month, as much as the car expenses you need to go to work.
You'd get the same thing for around €500 in European cities, and it's so much that you already need your parents to help you.
/s
My experience is in a city that has not been positively affected by globalization. I know the housing market is quite different in the tech hubs of the country.
Yet even with that, it took 3 police cars to get a dude with a ton of warrant who has been attacking local women to get off from my stairway...for the second time in 2 weeks. We keep having to call out to get drunk homeless people from my parking lot, and crack addicts hide by the door to our storage rooms.
You can pay millions and still deal with that crap. Or you can move a 30 minute drive away and have a fancy house with a yard and instead of drunk people screaming you'll hear your neighbors kids screaming at each other while playing in a pool (which most people like better).
I'm a city person, but it's not hard to figure out why people would not want to deal with the city, and why people in the city quickly become NIMBY.
Now, I hear Japanese cities a somewhat more civilized. It might be a stereotype, but if its true and people can actually respect each other in close quarters, it changes the game completely.
(This is in pretty stark contrast to my experiences in America, where I spend most of my waking time at home, even when hanging out with friends.)
When I came to that conclusion, suddenly the density didn't bother me so much. It was a change in mindset rather than actual physical space.
[1] https://www.bls.gov/ooh/healthcare/dentists.htm [2] https://www.bls.gov/ooh/computer-and-information-technology/...
People also confuse revenue with profit. My coworker's OB/GYN has great revenue, but her insurance costs are amazing, almost as much as my salary.
From memory of my kids birth the hospital direct bills expensive equipment, certainly my buddies wife did not personally fund the construction of the birthing center room, however if my dentist wants a new x-ray or new chair AFAIK its literally cash out of his checking account.
Its comparing apples and oranges. Much like comparing U3 employment stats in an employee culture like the USA where as in Japan I understand they hire once a year for new grads and if you don't make it into a real job at a real company (and very many don't) its a lifetime of either NEET or temp work, so their concept of U3 means very little compared to our concept of U3. Their concept of U3 is kind of like our concept of U3 of military service academy recent officer graduates.
I on the other hand would never want to live downtown. I like the suburban feeling. Love it. I commute for an hour and third. Downtown areas just feel too busy for me; congested, noisy, claustrophobic.
Edit: Addendum, Toronto native.
Not sure about others but personally the yard, larger home, parking etc are a huge quality of life boost. I can sacrifice for a while, but eventually need to enjoy life a bit.
The US "beef industry" irresponsibly used antibiotics to artificially fatten their cattle, causing everyone who ate their products to also consume those antibiotics. Also, the US' own companies push sugar saturated products to their youth without any disposition to responsibility, where sugar is known and has been known to cause serious health deficits.
The US practices culling of their population to reduce density.
edit: People have trouble viewing it in this light. A simpler way is to view it through its parallel in warfare. European and "civilized" warfare is the sudden loss of large portions of the population and able bodied men through massive violence organized by their "ruling parties". "Jungle" warfare is one where the losses on the participants isn't high per encounter, but is very high over the duration of their "war".
Despite the West criticizing Mao and Stalin of killing off many of their citizens, the US can also be found to have killed off many of their own citizens through the use of subtler methods.
For example, as the US' population became aware of the detrimental effects of tobacco (whose mortal danger to health was known in the West's "ruling class and educated" for centuries), the population loss related to tobacco induced health deficits dropped, while other issues began to surface and increase. The observable culling of the population is far more active in the US than it is in Russia or China for example (once one becomes aware that it is more subtle, and more like 'jungle/islander warfare')
Just fyi, if you only include Tokyo, price nearly doubles. It doesn't make the best comparison because Tokyo + 3 prefecture = 38 million people with over 5000 square miles.
However, that chart alone is very compelling because it shows something that you don't see anywhere else; declining housing price.
Is centralized and lax housing regulations the main reason for this? I don't think the author makes a strong argument, but it's certainly a contributing reason.
http://freakonomics.com/2014/02/26/why-are-japanese-homes-di...
And in Japan, earthquake resistance codes change about every 10-20 years, meaning a 35yo house is measurably worse than a new one.
I definitely considered the age of the building when we picked our new apartment due to these concerns.
There are also good reasons to junk old cars but it would be pretty inefficient if it became a societal taboo to drive a car over five years old or to purchase a used model.
There used to be an Australian guy who went around buying and fixing undervalued houses in Japan. While out in his searches, he'd point out the many unoccupied houses.
As an aside, when is Japan going to reconsider how it calculates unemployment? As it is, their unemployment is like 3.7% yet many many younger people work for as temps, which is sort of counterintuitive for a very tight labor market.
because many of these temps younger folks are university students at the same time. In japan university is only very few hours of attendance every week, so it leaves them with tons of free time to get a side-job.
For comparison the US median home price is ~220k. But, the Median price in Fairfax VA which is 30 miles from DC is $510,000. Chantilly VA which is ~35 miles from DC is 400k.
Prices are high because we have an inflationary monetary policy around housing. Essentially all mortgages are nearly risk-free to the lender, and are essentially implicit federal obligations.
Structural inequality is dangerous. All it takes is a little insurrection and the "faith and credit" gets depleted.
Hopefully we improve the stage of things.
Per Wikipedia, New York city's land area is 790km^2. Tokyo's is 2187km^2. Tokyo Metro's population density is 6,224/km^2 (I picked the higher of the possible numbers for this). New York City's density is 10,431/km^2.
There's really no argument you can make that New York should be cheaper than Tokyo based on density alone. Tokyo's big secret is sprawl.
Further people commute to the city's center which is why they tend to have lower population density than parts of their surrounding area. Which is why https://en.m.wikipedia.org/wiki/Guttenberg,_New_Jersey has twice NYC's population density even with shorter buildings.
Leaving Tokyo for Kyoto by train I kept seeing apartment buildings and houses for the first 50km or so.
For this price you get a shack in the far suburbs of Tokyo. Anything remotely close to the center goes to 100 million yen. And prices are going up before of the Olympic Bubble, too. It's completely crazy.
I find it strange that you would think that. I would expect accommodation prices to drop in the vast majority of areas. Obviously, I am biased the other way because of the places I know.
The economy outside of major cities is pretty bad and it's only getting worse.
P.S. There is also a matter of timespan. If you look at 20-30 years, everything is going up. If you look at 1-5 years, it's stable or going down.
I spent my entire life's savings to do this and it was the best decision I ever made. When and if I leave Tokyo, I will rent it out for side income. I can't overstate the peace of mind this gives me.
Not the case in Japan.
That belief in the market drives the direction.
I never really stopped to figure that maybe it was just foreign stuff that was crazy expensive. One of the really eye opening things I've learned in the last few years is how relatively affordable housing can be...even within the Tokyo city limits. https://www.youtube.com/watch?v=iGbC5j4pG9w -- older homes can be much much cheaper.
Here's a $1600/mo house https://www.youtube.com/watch?v=As2XMhqNBx8
This needs to be considered against local incomes of course, so they're a bit less tempting to locals than to American foreigners from ultra expensive coastal cities.
Part of this seems to be the particular Japanese combination of the shrinking and aging population + continued attempts at maintaining GDP via construction works + cultural preference for new living arrangements instead of old construction. But like anyplace, you pay for where you live and there are certainly incredibly expensive places to live.
Outside of living arrangements, public transport, food, clothes, and so on...everything except for personal vehicles is relatively affordable on a foreigner's salary.
However, salaries in Japan are surprisingly (sometimes shockingly low). I think I've heard that a person working in a regular "salaryman" job can expect to earn around their age * 10,000 USD. So if you're 30, you'll make around $30k USD. This information is a bit old, so expect it to be a little higher, but this table [1] from 2014 suggests a 32.4 year old computer programmer makes an average of 4,256,000 yen per year..or about $38k. Some occupations can make significantly more...but it's interesting to find yourself on this table and consider it.
1 - http://nbakki.hatenablog.com/entry/Annual_Salary_by_Occupati...
In the US a Google engineer can be making $160k while a teacher in some southern state could be making $50k.
Remember Japan doesn't really have inflation, so... not really. When they raised the sales tax to 8% it was an unexpectedly large problem because so many vending machines suddenly couldn't just charge 100 yen as they had for a decade, and raising by 10 yen (the smallest coin accepted by vending machines) would be too big a raise
(Can confirm; age 40, 18 years with the company, base salary just over $40k.)
Can someone provide some figures on what one could rent in SV?
That's a bit deceptive though because the US has huge tracts of wilderness land that aren't forested; they're deserts, tundra, plains, etc.
Just watch any of the street tours and stroll-throughs on YouTube [0][1][2]. There is almost a serene quality despite the crowds, and so very far from the dystopian "cyberpunk" vision that we've been taught to expect from "megacities."
[0] https://www.youtube.com/watch?v=RnTvMbeXtqw
"Existing condominium units’ average prices rose by 3.73%... New condominium units’ average prices skyrocketed by 21.2%..."
"...last year was particularly bad for housing starts in Tokyo Metropolitan Area, with 9.9% less new condominiums (40,449 units) being put on the market – the lowest level since 2010..." [1]
Basically the article has a politicized tone, comes from an urbanism advocacy group, ignores the recession, ignores Abenomics, misrepresents the true fluctuation of the real estate market in urban centers, jumps straight to "regulation" as the culprit, and is strikingly dismissive of environmental concerns.
[1] https://www.globalpropertyguide.com/Asia/Japan/Price-History
https://en.wikipedia.org/wiki/Motor-vehicle_inspection_(Japa...
Its possible given that Japanese don't like used houses that something similar exists for purchase of a used house, perhaps an inspection that costs $25K would discourage used house purchases.
https://en.m.wikipedia.org/wiki/Lost_Decade_%28Japan%29
"...Tokyo [...] is still growing at a rapid clip, despite the fact that Japan as a whole hit its population peak in 2008."
This is probably not sustainable.
There's no point where I go "Yep, mortgage is paid off, I don't plan on ever moving, or if I do, I can sell this house for enough to pay for another house that I can just move in to."
Any single month or year might be cheaper, but it still costs a lot more in the long run to perpetually be paying for your house.
Here's a link to a paper about it: http://www.nri.com/global/opinion/papers/2008/pdf/np2008137....
> Unlike people living in Western nations, residents of Japan have not benefited from an increase in the value of the nation’s housing stock. Houses here last only about 30 years on average, effectively making them a durable consumer good, whereas in Western countries a house is a capital good that will retain its value almost in perpetuity as long as it is properly maintained. The market value of Japanese houses falls even faster than they can be depreciated for tax purposes; after 15 years the typical house is worth nothing.
A big part of my net worth is the equity in my house. I'd be much poorer if my home depreciated to zero after 15 years.
The JCB japan central bank started money printing easy money by dumping interest rate after the last Japanese property bubble. https://en.m.wikipedia.org/wiki/Japanese_asset_price_bubble
House prices should be cheap as the population decreases but the house are already built.
“Housing is seriously unaffordable in Tokyo-Yokohama, with a 4.4 Average Multiple (average house price divided by average household income). Osaka-Kobe-Kyoto has an Average Multiple of 3.5 and is thus rated as moderately unaffordable. Despite these ratings, Japan has the most affordable housing of any megacities (over 10,000,000 residents) in the Demographia Survey.”
If you think real estate in Japan is "affordable", you need only talk to Japanese people. Salaries here are low, and the economy has been stagnant for decades. Younger people tend to live with their parents until marriage, and if you ask them why, they'll tell you: they can't afford to live on their own.
Yes, Construction is rampant, but that's mostly because buildings here are ripped down every few decades, not because cities are necessarily building more or larger buildings. There's just tons of churn.
I've said it before, and I'll say it again: if you want affordable cities, a big part of the "secret" is tanking your economy for a few decades.
But to make that comparison fair, you need to control for a lot of important factors. I've named a couple of big ones. There are others (like land area - Tokyo is huge. SF and Vancouver are tiny and constrained by geography.)
This article simply asserts that Tokyo is affordable (which, again, it is not), and that its "affordability" is due to construction. There's no real data here that supports that conclusion. It might be "relatively" more affordable than the frothiest global markets, but SF and Vancouver have been experiencing much higher population growth over the last decade, and SF in particular has been ground zero for a massive speculative bubble. The comparison is apples and oranges.
Arguing that Japanese cities are "more affordable" than other, less-affordable cities is a truism; by definition, every city that is less expensive than another city is doing something that makes it cheaper. This fact alone provides no useful information. But some people really want to believe that Japan's building habits are the answer, and not, say, their 30-year recession, or sprawl, or any of dozens of other factors.
Perhaps "buried the lede" is not the right phrase for this kind of thing, but it's still nonsense.
And even if it were bad by global standards, I'm pretty sure stagnant wages and declining housing costs is a way better situation than ours with declining wages and rapidly increasing housing costs.
Tokyo added around 1.5 million people from 2000 to now. That takes a lot of construction.
Whether or not you consider that "a lot", it's not an exceptional number. It's also impossible to know how that translates to "new units" without knowing a lot of other factors.