How an Average Family in Tokyo Can Buy a New Home

When I was young I remember reading about "Tokyo, the city of $11 hot dogs"...this was when a normal hot dog in the states was a buck or two. 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. [VIDEO] -- older homes can be much much cheaper. Here's a $1600/mo house [LINK] 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

> (single family homes with reasonable space) they make those cities unaffordable, they can't possibly scale, they are more hostile to walking, biking, and transit. None of that is actually true. [VIDEO] and [LINK] Apartments are great for those who want them, but there's nothing wrong or anti-urban about family housing. You can easily give everyone (edit: everyone who wants one) their own single-family detached housing (with privacy, and parking), inside a major city, for really cheap. It would still be 100% supportive of walking, biking, and transit, and can scale for at least the next 100 years. I can state this as a simple fact, because it is, it already exists on Earth today. Wealthier Americans just refuse to let that happen in our own cities. We simply don't build urban housing for families (even in instances where zoning rules do allow it) so families literally can't make that choice. Cities force sprawl, and then complain that decisions must be made to service the sprawl they themselves made.

Check out this video explaining why you can buy new detached homes in Tokyo for about 300k usd. [VIDEO] * Land owners have an absolute right to develop their own land - neighbors can't block you. * You can build a 60 m^2 x 3 floor house on 100m^2 of land, or more. So basically they build way denser, and reduce opportunities to block/rentseek.

Pay ~$300k for a house in Tokyo, which will cost you +/- $10k down [+] and ~$1k a month for a mortgage. Japanese underwriting standards would consider this doable at a household income of approximately $2.8k a month or so. c.f. [VIDEO] [+] I realize that number is surprising, and I would have found it surprising up until ~3 weeks ago, but I can assure you that this product is presently commercially available in Tokyo, including to people who do not exactly smash Japanese banks' definition of "desirable client."

I think a lot of it boils down to an ingrained belief that real estate should be an investment. Everyone buys a house with the expectation that its value will go up. This means that homeowners are extremely adverse to policies that might reduce home prices (like building more housing). Contrast this with houses in Japan, where it's expected that a home is a depreciating asset. Houses in the Special Wards of Tokyo can be bought for $300-400k: [VIDEO]

Housing cannot be both affordable and and a good investment. The definition of a good investment is a piece of property that has a price that increases over time. The nature of exponential growth means that eventually housing will become unaffordable if it is perpetually a good investment. Society's expectation that housing is a good investment results in people taking on significant debt to buy increasingly expensive homes. The consequence is that homeowners have a huge incentive to suppress the construction of additional housing, to inflate the values of their homes. And when housing prices do fall, people's financial lives are ruined. Contrast metros like SF, Portland, and Seattle with places like Tokyo where homes can be bought for < $400,000. A big part of this is that housing is expected to be a depreciating asset: [VIDEO]

Decent family houses in Tokyo are definitely more expensive than this, but not hugely (also Kyoto surprisingly). There's some interesting things about the Japanese housing market, for example, many homes become "worthless" after the end of the mortgage -- so they depreciate and are more like buying cars. Tokyo is also an absolutely enormous city with even more massive metro area. There's very few examples on the planet that come close. Tokyo is sometimes called "the infinite city" for good reason. This means that yes, you can pay huge money for a coffin in some areas, and little money for an entire house elsewhere in the same city. New York is kind of the same way in that respect, but is actually still smaller and less diverse. I could write a ton more, but I think this series from "Life Where I'm From" which is pointed out in the article is a fantastic overview of housing for a nuclear family in Tokyo. How an Average Family in Tokyo Can Buy a New Home - [VIDEO] Brand New Japanese House Tour - [LINK] Are Japanese Homes Really Worthless After 30 Years? - [LINK] Old Japanese Apartment vs. New House - [LINK] What a Very Old Japanese House is Like - [LINK] Living in Traditional Japanese Townhouses: Kyo-machiya - [LINK] Checking Out New Japanese House Design and Technology - [LINK] I'd also point out this young couple who are expecting their first child (Paolo from Tokyo) What a Japanese Moving Company in Tokyo is like - [LINK] $1500 Japanese Apartment Tour in Tokyo Shibuya - [LIN

>>curious why this is so. I think because real estate investors have enough capital to take over cool areas. A stark counterexample is Japan where you can own a freestanding house in a dense urban environment near public transit for $300k -- what would that cost you in London, NYC, Berlin? It seems like Japan is one of the few major cities where you could have a large family (or large studio) and live an urban life -- everywhere else you are stuck with a 2BR or 3BR apt (if your rich). How an Average Family in Tokyo Can Buy a New Home [VIDEO]

Here is a nice video explaining housing affordability in Tokyo: [VIDEO] Notes: * No one thinks of residential housing as an investment, so there is no speculation. * Building codes are such that residential can be built almost anywhere. Japan has zoning, it is just really simplified. * There is no resistance to rebuilding, so it is done a lot (why houses last only 30 years, the market demands new housing). * Housing can be built on really small lots, only 2 meters of clearance is required. * A $300k low end house is around 6-700 SQF, which might not make sense from an American context.

Oh yes, I've seen videos about Japan's approachable housing. [1]. I'm sure Korea and other Asian nations have similar approaches. I mainly wanted to highlight a market driven approach that works with the other industries in the US as opposed to a government directed one. Albeit the government provides stimulus of some type to kick start it, like how NASA drove the privatization of Space and now we have lots of launch vehicles via different companies. [1] [VIDEO]

Building taller, denser housing doesn't pop the real-estate bubble. As cities grow denser, the land gets more expensive because land is finite. The solution to housing shortages is to build more, denser housing. The existing homeowners aren't getting a bad deal - they'll still be able to sell their houses at an immense gain. It's just that the same plot of land would occupy more units of housing. This is largely how dense cities like Tokyo manage to keep housing affordable [1]. When population increases you keep housing affordable by building more houses per unit of area. 1. [VIDEO]

I think the main drives are real estate investments and centralisation... Tokyo doesn't really have these issues in part due to cultural differences but also due to better regulations on urbanism. [ ] [ ] [VIDEO]

How an Average Family in Tokyo Can Buy a New (detacted single-family) Home (for about $300k in Tokyo Proper) [VIDEO] There's more urban dwelling options than just skyscraper. Low Japanese fertility appears to be a product of their work culture; you don't have time to go on dates if you leave the office at 10pm.