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Kalzumeus spoke about "Tokyo" to represent Tokyo, Osaka, Nagoya and other large regional cities. As you might expect, these Tokyo-like cities are much more exp
by lovemenot 4y ago
Kalzumeus spoke about "Tokyo" to represent Tokyo, Osaka, Nagoya and other large regional cities.
As you might expect, these Tokyo-like cities are much more expensive at their centre than at their periphery. Nevertheless, I imagine your eyes may water when you find out just how much more so. I only know one of these cities well, and to be fair only in land values not in rentals.
In absolute amounts, Tokyo itself is of course more unequal than smaller big cities. But the relative value distribution is perhaps fairly consistent across Tokyo-like cities.
Within Tokyo-city, very central regions (Minato-ku) are valued at 4X over central urban districts (Nakano-ku), which in turn, are 8X more expensive to buy than the least valuable outer-Tokyo districts (Hachioji-shi). So there's a 32X differential in land values within that city's borders.
Now, let's zoom out from the city itself. Within just a few hours drive or rail journey, we can easily get to 300X land values: $300 in Minato buys the same area of land worth around $1 in a fairly central district of a fairly large town in Nagano. Parts of mountains obviously go for much cheaper than land in these towns, but I don't have good market data for that. My guess is a further 5X - 10X.
Undoubtedly, it is more than 1,000 times, and perhaps sometimes as much as 10,000X, more expensive to buy a plot of land in Japan, than another plot of the same size just 500Km - 1,000Km away.
One may reasonably dispute these figures in detail. I did try to be conservative. Nevertheless, they are certainly right in the order of magnitude.
Getting back to your point, I would say that in spite of the wonderful societal benefits of world-class transportation within and between cities, if the goal was to achieve ball-park economic parity across the regions then that policy in Japan has been a failure. Income & expenditure? Sure ... all of Japan looks pretty consistent. Property valuation? ... the discrepancy is almost unfathomable.
- paulmd 4y agoThat sounds like a lot, but 32x is probably less than the differential in the US between downtown manhattan and suburban Jersey or Delaware, and of course there's a whole rural level in the US far below that as well. That said, the whole "tokyo is just turbo-expensive!" thing is, in the broad strokes, generally false. Buying land in high-density commercial districts is going to be expensive, just like if you wanted to build a detached single-family home in downtown manhattan, but to put some hard numbers to it: In September 2020, the average listing price for a newly constructed detached wooden house in Tokyo of between 100-sqm and 300-sqm (1,076 sqft and 3,229 sqft) was: https://resources.realestate.co.jp/news/how-much-does-it-cost-to-buy-a-house-in-tokyo-october-2020-update/ https://resources.realestate.co.jp/news/how-much-does-it-cos... > Greater Tokyo Area: ¥36,850,000 ($354,000) > Tokyo (23 Wards + Western Suburbs): ¥42,880,000 ($412,000) > Tokyo 23 Wards: ¥59,410,000 ($570,000) > Tokyo western suburbs: ¥40,110,000 ($385,000) -- > For July to September 2020, the average sales price for a previously owned detached house in Tokyo was: > Tokyo (23 Wards + Western Suburbs): ¥46,150,000 ($443,000) -This was a year-on-year increase of 5.5% and an increase of 14.6% compared to the April to June period, when sales dropped sharply due to coronavirus social distancing measures. -This was also the highest average sales price since the July to September (3rd quarter) 2018 period of ¥47,020,000. > Tokyo 23 Wards: ¥57,170,000 ($549,000) -This was a year-on-year increase of 5.7% and an increase of 15.8% compared to the April to June period. -This was also the highest average sales price since the July to September (3rd quarter) 2018 period of ¥57,170,000. > Tokyo Western Suburbs: ¥32,730,000 ($319,000) -This was a year-on-year increase of 10.1% and an increase of 5.7% compared to the April to June period. -- Honestly those prices aren't bad at all for "the densest metropolis in the world", especially considering the excellent transportation and other infrastructure that remove the need for cars (and they have cheap healthcare/etc by US standards as well). That is for 1k-3k sq-ft detached family homes, so that's not $300k for a shoebox, that's $300k for an average home by western standards. Undoubtedly some difference in materials/etc but it's not uncommon to see houses going for $750k-1m in 2nd-tier or 3rd-tier tech cities in the city proper and $500k+ on the outskirts. The bigger factor, by US standards, is that salaries are much lower, obviously that is a much bigger number if you're making $50k a year at the peak of your career, but again, with US housing prices generally being 2-4x japanese prices, it probably ends up being similar-ish. I have a friend that was subletting a room who got the boot because the owner was selling, got $750k for an average single-family home in a second-tier or third-tier city with insane tax rates.
- smcl 4y agoTIL my 69m^2 flat in a mid-sized Central European city is "worth" broadly the same as a larger house in the Greater Tokyo area :-O
- robocat 4y agoIn any place where house prices are mostly influenced by home buyers (not investors), the price trends upwards to the ceiling amount that people can afford on their interest repayments: that figure is constrained by income, interest rates, and the percentage of income that is spent on housing. Market sentiment also matters (tends to be less rational!) Perhaps limited house prices in Tokyo are more a reflection of normal incomes of employees? https://resources.realestate.co.jp/buy/guide-home-mortgage-loans-japan/ https://resources.realestate.co.jp/buy/guide-home-mortgage-l... https://www.tytoncapital.com/projects/get-foreign-mortgage-housing-loan-japan/ https://www.tytoncapital.com/projects/get-foreign-mortgage-h...