5 ms·

Serious question: is there any desirable city right now that doesn't have a housing crisis? A few weeks ago the discussion on HN was about Canada, this week it'

Serious question: is there any desirable city right now that doesn't have a housing crisis? A few weeks ago the discussion on HN was about Canada, this week it's about Australia, take your pick of coastal US cities and it's the same. I've heard people moving to parts of Europe for lower-cost housing are doing well, but that presumes you have a mobile job (and visas to go with it) and banks on the fact that many parts of Europe are losing population rather quickly.

davidw 3y ago
Tokyo is pretty famous for building something like 'enough'. Vienna has a pretty good housing story. The interest rates in most of the world are bad for would-be homebuyers across the board, though. The US has a lot of 'low hanging fruit' in terms of being able to get rid of a lot of onerous zoning that could really make a dent in the housing supply. And we've seen a fair amount of progress in the short time frame that YIMBY groups have been a thing.
- linguae 3y ago
  Interest rates in Japan are still very low, though if you're thinking about moving to Japan, it is difficult for foreigners to get mortgages through Japanese banks unless they have permanent residency or have a Japanese spouse, though I've heard of some banks offering mortgages to those who lived in the country for at least two years. Who knows what interest rates in Japan will be in two years, though; the yen has weakened noticeably against the dollar since 2022 when the Federal Reserve started its interest rate hikes, yet the Bank of Japan has continued its low interest policy.
- dzhiurgis 3y ago
  Japanese property is famously cheap for being small, but other factor is land being a 30 year lease. Build same size + on land you buy and it will be more expensive despite efficiencies of large domestic market.
- seanmcdirmid 3y ago
  > Tokyo is pretty famous for building something like 'enough'. Tokyo builds a lot because they tear down homes after 30-40 years to rebuild them. You can't judge Tokyo's property market by new housing starts, and the fact that housing depreciates (rather than appreciates) scares away all the speculators.
  - drt5b7j 3y ago
    Wait what? There's a lot there, tell us more. Why do they rebuild every 30 years?
    - phs318u 3y ago
      https://web.archive.org/web/20230917073306/https://www.nytimes.com/2023/09/11/opinion/editorials/tokyo-housing.html https://web.archive.org/web/20230917073306/https://www.nytim... In Japan, the real estate system is designed to ensure affordability of homes. In Australia, the real estate system is designed to encourage and maximise real estate investment as a no-effort wealth multiplier for (literal) rent-seekers. See for example the policy of "negative gearing" where the tax system subsidises those buying investment properties. Those that took advantage are such a powerful block that no politician of any stripe has the gumption to sunset this policy.
      - seanmcdirmid 3y ago
        That’s only true after Japan’s massive property bubble crashed. Before that housing was as unaffordable as it currently is in China.
    - seanmcdirmid 3y ago
      https://japanpropertycentral.com/2014/02/understanding-the-lifespan-of-a-japanese-home-or-apartment/#:~:text=According%20to%20the%20Ministry%20of,it%20is%20around%2037%20years https://japanpropertycentral.com/2014/02/understanding-the-l....
    - seanmcdirmid 3y ago
      See the link I posted. The average age for a house before rebuild is 27 years old.
linguae 3y ago
The Tokyo metro area is quite affordable compared to desirable metro areas in the United States and Canada, as well as other East Asian metro areas outside Japan. While I'd struggle to find a place for $500,000 in Silicon Valley, $500,000 in the Tokyo metro area could buy a nice place, especially if one commutes from the suburbs. The public transportation system in the Tokyo metro area is top notch, even in the suburbs.
- alephnerd 3y ago
  A deflated housing bubble in the 90s and (relatively) lower salaries is also a reason in Tokyo. The median household income in the Bay Area is $128,000 [0] versus around $50-60,000 in Japan [1], with median house priced at $1.3m and ~$300k respectively. Both are pretty unaffordable for people earning normal salaries. The median in NSW (where Sydney is located) is around AUD$62,000 [2] but the median house go for AUD$1.3m [2] [0] - https://www.census.gov/quickfacts/fact/table/sanfranciscocountycalifornia/EDU685221 https://www.census.gov/quickfacts/fact/table/sanfranciscocou... [1] - https://www.stat.go.jp/english/data/kakei/156.html https://www.stat.go.jp/english/data/kakei/156.html [2] - https://www.abs.gov.au/statistics/labour/earnings-and-working-conditions/employee-earnings/latest-release https://www.abs.gov.au/statistics/labour/earnings-and-workin... [3] - https://www.ratecity.com.au/home-loans/mortgage-news/median-house-unit-prices-sydney-its-regions https://www.ratecity.com.au/home-loans/mortgage-news/median-... [4] - https://www.forbes.com/advisor/mortgages/real-estate/bay-area-housing-market/ https://www.forbes.com/advisor/mortgages/real-estate/bay-are... [5] - https://www.nippon.com/en/japan-data/h01311/ https://www.nippon.com/en/japan-data/h01311/
  - linguae 3y ago
    That is definitely true. I currently live in a one-bedroom apartment near Silicon Valley; I can't afford to buy a house anywhere near the Bay Area unless I wanted to commute from Stockton, which has a very high crime rate. Conversely, I could afford a really nice place in Tokyo with my Silicon Valley income, but if I transferred to my company's Tokyo branch and took a local salary, my salary would go down substantially. Even so, I'd still be able to afford a home in a suburb of Tokyo (even $250,000 can get you a place out there). As someone who travels to Japan frequently, my dream is to own a vacation home there. Outside of Tokyo homes can be even cheaper; I've seen listings in rural parts of Japan for places as low as $40,000!
kurthr 3y ago
CA is losing population too and building houses in those desirable locations. Why don't prices go down? These are financialized assets bought on credit. Some 8-10% of SF rental and 2% of owned housing is vacant (over 25% of commercial), but you don't see prices go down. Building 1% per year would involve a project on every single residential city block. That would have huge externalities. Why should current residents deal with the mess so more people can move in? So builders can get rich charging $1000/sqft? The quick way to lower prices would be to annually tax vacancies (if you can't show a CA resident/corp paying rental income on a residential/commercial property) then pay the sales tax income the city would have received from those in an occupied location. This would encourage people to lower rents/prices to fill vacancies. Prop13 has made the property taxable rate so low that many people would rather have an empty rotting hulk than an occupied older property since it would lower their leverage on asset appreciation. A residence tax wouldn't be limited to the Prop13 assessment (5-10% of current value). If there is ever a bubble pop, prices would likely to stay low for a generation. Just like Japan. It's not that different from bitcoin/NFT (other than some people live in them).
- cwalv 3y ago
  > Prop13 has made the property taxable rate so low that many people would rather have an empty rotting hulk Doesn't prop13 only apply to primary residence?
  - bugglebeetle 3y ago
    No, it insanely applies to commercial properties as well.
    - kurthr 3y ago
      So you can sell the LLC that "owns" the property and maintain the low tax assessment.
- seanmcdirmid 3y ago
  California's property bubble did pop in the late 80s/early 90s (ironically, or maybe related to, Japan's bubble pop). It recovered since then. Most people leave California because "it's too crowded, no one goes there anymore" (leading to high housing costs) problems, not because of other reasons. Eventually an equilibrium will be reached, and prices shouldn't drastically pop unless something else happens (like a tech sector crash).
wwtdtgotiatl 3y ago
> desirable city Sydney has topped net internal migration for years now. It's desirable for everyone who doesn't live there, actual locals are getting out at a ridiculously high rate.
drt5b7j 3y ago
Chicago? Prices don't seem to be going up.

davidw 3y ago

Tokyo is pretty famous for building something like 'enough'. Vienna has a pretty good housing story. The interest rates in most of the world are bad for would-be homebuyers across the board, though. The US has a lot of 'low hanging fruit' in terms of being able to get rid of a lot of onerous zoning that could really make a dent in the housing supply. And we've seen a fair amount of progress in the short time frame that YIMBY groups have been a thing.

linguae 3y ago
Interest rates in Japan are still very low, though if you're thinking about moving to Japan, it is difficult for foreigners to get mortgages through Japanese banks unless they have permanent residency or have a Japanese spouse, though I've heard of some banks offering mortgages to those who lived in the country for at least two years. Who knows what interest rates in Japan will be in two years, though; the yen has weakened noticeably against the dollar since 2022 when the Federal Reserve started its interest rate hikes, yet the Bank of Japan has continued its low interest policy.
dzhiurgis 3y ago
Japanese property is famously cheap for being small, but other factor is land being a 30 year lease. Build same size + on land you buy and it will be more expensive despite efficiencies of large domestic market.
seanmcdirmid 3y ago
> Tokyo is pretty famous for building something like 'enough'. Tokyo builds a lot because they tear down homes after 30-40 years to rebuild them. You can't judge Tokyo's property market by new housing starts, and the fact that housing depreciates (rather than appreciates) scares away all the speculators.
- drt5b7j 3y ago
  Wait what? There's a lot there, tell us more. Why do they rebuild every 30 years?
  - phs318u 3y ago
    https://web.archive.org/web/20230917073306/https://www.nytimes.com/2023/09/11/opinion/editorials/tokyo-housing.html https://web.archive.org/web/20230917073306/https://www.nytim... In Japan, the real estate system is designed to ensure affordability of homes. In Australia, the real estate system is designed to encourage and maximise real estate investment as a no-effort wealth multiplier for (literal) rent-seekers. See for example the policy of "negative gearing" where the tax system subsidises those buying investment properties. Those that took advantage are such a powerful block that no politician of any stripe has the gumption to sunset this policy.
    - seanmcdirmid 3y ago
      That’s only true after Japan’s massive property bubble crashed. Before that housing was as unaffordable as it currently is in China.
  - seanmcdirmid 3y ago
    https://japanpropertycentral.com/2014/02/understanding-the-lifespan-of-a-japanese-home-or-apartment/#:~:text=According%20to%20the%20Ministry%20of,it%20is%20around%2037%20years https://japanpropertycentral.com/2014/02/understanding-the-l....
  - seanmcdirmid 3y ago
    See the link I posted. The average age for a house before rebuild is 27 years old.

linguae 3y ago

The Tokyo metro area is quite affordable compared to desirable metro areas in the United States and Canada, as well as other East Asian metro areas outside Japan. While I'd struggle to find a place for $500,000 in Silicon Valley, $500,000 in the Tokyo metro area could buy a nice place, especially if one commutes from the suburbs. The public transportation system in the Tokyo metro area is top notch, even in the suburbs.

alephnerd 3y ago
A deflated housing bubble in the 90s and (relatively) lower salaries is also a reason in Tokyo. The median household income in the Bay Area is $128,000 [0] versus around $50-60,000 in Japan [1], with median house priced at $1.3m and ~$300k respectively. Both are pretty unaffordable for people earning normal salaries. The median in NSW (where Sydney is located) is around AUD$62,000 [2] but the median house go for AUD$1.3m [2] [0] - https://www.census.gov/quickfacts/fact/table/sanfranciscocountycalifornia/EDU685221 https://www.census.gov/quickfacts/fact/table/sanfranciscocou... [1] - https://www.stat.go.jp/english/data/kakei/156.html https://www.stat.go.jp/english/data/kakei/156.html [2] - https://www.abs.gov.au/statistics/labour/earnings-and-working-conditions/employee-earnings/latest-release https://www.abs.gov.au/statistics/labour/earnings-and-workin... [3] - https://www.ratecity.com.au/home-loans/mortgage-news/median-house-unit-prices-sydney-its-regions https://www.ratecity.com.au/home-loans/mortgage-news/median-... [4] - https://www.forbes.com/advisor/mortgages/real-estate/bay-area-housing-market/ https://www.forbes.com/advisor/mortgages/real-estate/bay-are... [5] - https://www.nippon.com/en/japan-data/h01311/ https://www.nippon.com/en/japan-data/h01311/
- linguae 3y ago
  That is definitely true. I currently live in a one-bedroom apartment near Silicon Valley; I can't afford to buy a house anywhere near the Bay Area unless I wanted to commute from Stockton, which has a very high crime rate. Conversely, I could afford a really nice place in Tokyo with my Silicon Valley income, but if I transferred to my company's Tokyo branch and took a local salary, my salary would go down substantially. Even so, I'd still be able to afford a home in a suburb of Tokyo (even $250,000 can get you a place out there). As someone who travels to Japan frequently, my dream is to own a vacation home there. Outside of Tokyo homes can be even cheaper; I've seen listings in rural parts of Japan for places as low as $40,000!

kurthr 3y ago

CA is losing population too and building houses in those desirable locations. Why don't prices go down? These are financialized assets bought on credit. Some 8-10% of SF rental and 2% of owned housing is vacant (over 25% of commercial), but you don't see prices go down. Building 1% per year would involve a project on every single residential city block. That would have huge externalities. Why should current residents deal with the mess so more people can move in? So builders can get rich charging $1000/sqft? The quick way to lower prices would be to annually tax vacancies (if you can't show a CA resident/corp paying rental income on a residential/commercial property) then pay the sales tax income the city would have received from those in an occupied location. This would encourage people to lower rents/prices to fill vacancies. Prop13 has made the property taxable rate so low that many people would rather have an empty rotting hulk than an occupied older property since it would lower their leverage on asset appreciation. A residence tax wouldn't be limited to the Prop13 assessment (5-10% of current value). If there is ever a bubble pop, prices would likely to stay low for a generation. Just like Japan. It's not that different from bitcoin/NFT (other than some people live in them).

cwalv 3y ago
> Prop13 has made the property taxable rate so low that many people would rather have an empty rotting hulk Doesn't prop13 only apply to primary residence?
- bugglebeetle 3y ago
  No, it insanely applies to commercial properties as well.
  - kurthr 3y ago
    So you can sell the LLC that "owns" the property and maintain the low tax assessment.
seanmcdirmid 3y ago
California's property bubble did pop in the late 80s/early 90s (ironically, or maybe related to, Japan's bubble pop). It recovered since then. Most people leave California because "it's too crowded, no one goes there anymore" (leading to high housing costs) problems, not because of other reasons. Eventually an equilibrium will be reached, and prices shouldn't drastically pop unless something else happens (like a tech sector crash).

wwtdtgotiatl 3y ago

> desirable city Sydney has topped net internal migration for years now. It's desirable for everyone who doesn't live there, actual locals are getting out at a ridiculously high rate.

drt5b7j 3y ago

Chicago? Prices don't seem to be going up.