An average family in Tokyo can own a new house for $850/month • Hacker News Board

Re: An average family in Tokyo can own a new house for $850/month

#81

Post by throwawaythekey » Mon, Apr 27, 2020, 3:19 AM UTC

jseliger wrote: post #13

codesuki wrote: post #9

I think this headline is misleading in 2 ways. 1. yes you might get a house at this price but it's either 1-2 hours out of the city center (which is fine, just saying Tokyo is large.) Or alternatively it's in bad neighborhoods. (bad is relative if you are from the US) 2. your house will most likely look like this: https://www.ii-ie2.net/dat/5ba1164d.jpg Sayonara sunlight, hello neighbor. here are listings: https://ww…

Sayonara sunlight, hello neighbor. This is the sort of thing that markets solve really well. If you want a dwelling unit with those properties, pay for it. If they're less important to you than cost, don't. If one is $300,000 and the other $600,000, it's very reasonable to choose affordability and go to a park.

From my observational experience, and limited study on the issue, markets don't seem to be solving this optimally, at least in Melbourne, Australia.

Overall, the market for apartments seems to be supply constrained. The main factors:

1. Government approval is required to build large apartment buildings. In general, this seems to lag behind demand.

2. Large buildings take a long time to build

3. There have been a number of years of high immigration, especially in and around the CBD.

All of these factors combine to cause high prices. In a high price environment, many residents are stretched for cash. They essentially have to pick the lowest price apartment available. It's not uncommon to have multiple people sharing a room in order to decrease costs. This creates a high price floor. Mid range apartments don't tend to be much more expensive, simply because many residents are already super stretched financially and unable to afford the extra marginal cost.

As a property developer in a high floor, low marginal payoff environment your financial incentive is now to build as many low cost apartments as possible.

>> The majority of Victoria’s newest apartments are so small they would be considered unliveable in Sydney…More than three-quarters of new one-bedroom apartments built across the state are 50 square metres or less, which means they probably would have been illegal in Sydney, London and Adelaide. [1]

Making these apartments meet a reasonable minimum standard could only be less than 5% of the total cost [1]. To achieve this governments have tried to intervene by increasing minimum standards [2].

What concerns me the most is the longer term impacts. When demand drops off (as covid is pointing to), you have a massive supply of low quality apartments. Is the end result of this many vacancies and people living in shoe boxes when they could've been somewhere nicer?

There are a few long bows there, but as someone who lives in a relatively sunny but not quite sunny enough apartment that is my take.

[1] - https://blogs.crikey.com.au/theurbanist/2015/05/18/apartment... (great blog for planning issues)

[2] - https://architectureau.com/articles/victorias-draft-apartmen...

Re: An average family in Tokyo can own a new house for $850/month

#82

Post by giraffecat » Mon, Apr 27, 2020, 3:43 AM UTC

p1esk wrote: post #69

giraffecat wrote: post #66

Earlier quoted context omitted.

Santa Barbara is a terrible place to consider for buying/building a house. Sky high property taxes and inflated property values are begging the local economy to dry out due to rental prices (The Bay is cheaper if you compare similar apartments with similar interior/exterior). The city can't expand because of geology, and it refuses to build up to preserve the "historical view of the Riviera". Sure it's a pretty city,…

The Bay is cheaper if you compare similar apartments with similar interior/exterior Santa Barbara is significantly cheaper than bay area in terms of renting or buying real estate. The 2br apartment I'm currently renting in SB is $2.6k/mo. A very similar apartment in Redwood City is over $4k/mo.

There are plenty of 2br apartments for ~$2.5k on the east side of the bay (San Leandro, Richmond, etc.), and you will have better job opportunities as well.

Re: An average family in Tokyo can own a new house for $850/month

#83

Post by jessriedel » Mon, Apr 27, 2020, 3:51 AM UTC

wenc wrote: post #50

codesuki wrote: post #9

I think this headline is misleading in 2 ways. 1. yes you might get a house at this price but it's either 1-2 hours out of the city center (which is fine, just saying Tokyo is large.) Or alternatively it's in bad neighborhoods. (bad is relative if you are from the US) 2. your house will most likely look like this: https://www.ii-ie2.net/dat/5ba1164d.jpg Sayonara sunlight, hello neighbor. here are listings: https://ww…

> 2. your house will most likely look like this Not sure what's wrong with that? That looks pretty amazing actually. I live in a unit that looks similar to that near downtown Chicago. My unit is north facing, and even so, there's more than enough sunlight.

The title says "house" for a "family", and the pictured structure is not normally what people think when they hear that, being significantly smaller than even a typical townhouse. In particular, a "house" suggests something larger than a small apartment.

Obviously there's nothing wrong with an apartment or microhouse, but it makes the quoted rent less impressive.

Re: An average family in Tokyo can own a new house for $850/month

#84

Post by E14n » Mon, Apr 27, 2020, 3:59 AM UTC

codesuki wrote: post #9

I think this headline is misleading in 2 ways. 1. yes you might get a house at this price but it's either 1-2 hours out of the city center (which is fine, just saying Tokyo is large.) Or alternatively it's in bad neighborhoods. (bad is relative if you are from the US) 2. your house will most likely look like this: https://www.ii-ie2.net/dat/5ba1164d.jpg Sayonara sunlight, hello neighbor. here are listings: https://ww…

The big issues that consistently affects real-estate around Tokyo is proximity to a station and the age of the building. The basic rule is that a condominium must be within 10 minutes walk from a station, and a free standing house up to 15 minutes walk. A house around 30 years old is worthless, and a house younger will be some fraction of its original purchase price. There are exceptions but this is a pretty good rule of thumb. Land is generally the only thing that appreciates in value and only if its in a desirable location. As a point of reference, we live in an 90m^2 home 45min from Tokyo station and it was less then the above price.

Re: An average family in Tokyo can own a new house for $850/month

#85

Post by [deleted] » Mon, Apr 27, 2020, 4:15 AM UTC

codesuki wrote: post #9

I think this headline is misleading in 2 ways. 1. yes you might get a house at this price but it's either 1-2 hours out of the city center (which is fine, just saying Tokyo is large.) Or alternatively it's in bad neighborhoods. (bad is relative if you are from the US) 2. your house will most likely look like this: https://www.ii-ie2.net/dat/5ba1164d.jpg Sayonara sunlight, hello neighbor. here are listings: https://ww…

[deleted]

Re: An average family in Tokyo can own a new house for $850/month

#86

Post by p1esk » Mon, Apr 27, 2020, 4:31 AM UTC

giraffecat wrote: post #82

p1esk wrote: post #69

Earlier quoted context omitted.

The Bay is cheaper if you compare similar apartments with similar interior/exterior Santa Barbara is significantly cheaper than bay area in terms of renting or buying real estate. The 2br apartment I'm currently renting in SB is $2.6k/mo. A very similar apartment in Redwood City is over $4k/mo.

There are plenty of 2br apartments for ~$2.5k on the east side of the bay (San Leandro, Richmond, etc.), and you will have better job opportunities as well.

My impression was the best of Silicon Volley jobs are located somewhere between San Mateo and San Jose. Am I wrong?

Re: An average family in Tokyo can own a new house for $850/month

#87

Post by wenc » Mon, Apr 27, 2020, 4:43 AM UTC

jessriedel wrote: post #83

wenc wrote: post #50

Earlier quoted context omitted.

> 2. your house will most likely look like this Not sure what's wrong with that? That looks pretty amazing actually. I live in a unit that looks similar to that near downtown Chicago. My unit is north facing, and even so, there's more than enough sunlight.

The title says "house" for a "family", and the pictured structure is not normally what people think when they hear that, being significantly smaller than even a typical townhouse. In particular, a "house" suggests something larger than a small apartment. Obviously there's nothing wrong with an apartment or microhouse, but it makes the quoted rent less impressive.

Well I guess that’s true from a North American perspective. I’ve lived in several countries, and from my perspective, in Asia and much of Europe, that structure seems like it would be considered a passable family home in an urban area. Most urban folks have a different relationship with space — smaller spaces are ok if one is close to transit and city amenities.

Re: An average family in Tokyo can own a new house for $850/month

#88

Post by danielscrubs » Mon, Apr 27, 2020, 4:56 AM UTC

twblalock wrote: post #34

claudeganon wrote: post #3

Zoning is important, but let’s also remember that single-family housing isn’t really a speculative investment vehicle in Japan like it is here. You can either have private equity buying up foreclosed homes and house flipping tv shows or housing being used as housing that most people can afford. America chooses the former, Japan, the latter.

> You can either have private equity buying up foreclosed homes and house flipping tv shows or housing being used as housing that most people can afford. America chooses the former, Japan, the latter. Even in very expensive markets like Silicon Valley, foreclosures are typically less than 1% of total home sales. Homes are not a speculative investment either. Recent studies have shown investing in housing to be safer…

If the housing prices are growing by 6.7% year by year, and inflation is around 2%, younglings without parents money will have to be priced out and have to work ~5% harder every year which sounds fun /s ;)

I've earned a lot on owning a home, and even have friends who "earn" more per year in owning the home than their salary for a particular year.

Re: An average family in Tokyo can own a new house for $850/month

#89

Post by jessriedel » Mon, Apr 27, 2020, 5:15 AM UTC

wenc wrote: post #87

jessriedel wrote: post #83

Earlier quoted context omitted.

The title says "house" for a "family", and the pictured structure is not normally what people think when they hear that, being significantly smaller than even a typical townhouse. In particular, a "house" suggests something larger than a small apartment. Obviously there's nothing wrong with an apartment or microhouse, but it makes the quoted rent less impressive.

Well I guess that’s true from a North American perspective. I’ve lived in several countries, and from my perspective, in Asia and much of Europe, that structure seems like it would be considered a passable family home in an urban area. Most urban folks have a different relationship with space — smaller spaces are ok if one is close to transit and city amenities.

But the whole point of the headline is to try and convince the reader that Tokyo housing prices are low relative to the reader's expectation. If the small housing price example is congruent with the size of the example house, there's no story.

Re: An average family in Tokyo can own a new house for $850/month

#90

Post by mikekchar » Mon, Apr 27, 2020, 5:18 AM UTC

codesuki wrote: post #9

I think this headline is misleading in 2 ways. 1. yes you might get a house at this price but it's either 1-2 hours out of the city center (which is fine, just saying Tokyo is large.) Or alternatively it's in bad neighborhoods. (bad is relative if you are from the US) 2. your house will most likely look like this: https://www.ii-ie2.net/dat/5ba1164d.jpg Sayonara sunlight, hello neighbor. here are listings: https://ww…

Given your name, I guess you live in Japan, so I'll just give my opinion for others who have never lived here. I also think the title is misleading, though I wouldn't express it so dramatically.

One thing to consider is that Tokyo is a prefecture, not a city. There are rural areas of Tokyo (like really rural), though most of it is very suburban. Anybody who has lived in the suburbs in western countries would probably be fairly comfortable in most parts of Tokyo prefecture.

It is true that in quite a few areas of Tokyo it takes a long time to get to central Tokyo. 2 hours is at the extreme, though. I live in very rural Shizuoka prefecture and I can get to Tokyo station in 2 hours if I time the bus and shinkansen perfectly. If you are on the train line, most places are no more than an hour away. It's pretty comparable to living in satellite cities in London, but the train is much better :-)

If you are not on the train line, though, it can take quite a long time. Roads in Japan are very slow, especially in rural areas. It's not unusual for it to take me over an hour to drive 30 km or so if I need to go through several towns. So you definitely can find houses in Tokyo that will be 2 hours away from the city center, but I don't think anyone working in central Tokyo would buy those houses.

I honestly don't think the example picture is representative of houses you'll find in Tokyo prefecture. They definitely exist in areas that are desirable, though. I think saying that you're probably looking at either a 1 hour commute by train or your are going to get a house jammed in wherever it will fit is correct. But it's not both at the same time.

I don't often go to Tokyo, but I occasionally go to surrounding areas. Probably if I was looking at houses for commuting to central Tokyo, I would probably look at places in Kanagawa, Chiba and Saitama as well as Tokyo. There is actually quite a lot of choice.

The video linked in the article is well worth watching (as is anything from "Life Where I'm From" if you are interested in Japan) and is extremely balanced IMHO. Compared to other big city centers around the world, Tokyo and the surrounding area is quite affordable. Compared to Silicon Valley it's almost comically so, but Silicon Valley is really right at the other extreme.