How an Average Family in Tokyo Can Buy a New Home
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How an Average Family in Tokyo Can Buy a New Home


[G] In Tokyo, you can buy a brand new single detached home for about 300,000 US dollars you might ask, how is this possible in the city that in 2016, Monocle declared the most liveable city I know, i know, Monocle is a British lifestyle magazine Not the UN Human Development Index, where Japan ranks 20th But still, I feel safe in saying that Tokyo is a major world city and I think a lot of people would be surprised that a new detached home can be in reach for the average family. So I’m going to get to that housing story, but first I have to sidetrack a bit and to find a few things This video will be about buying a new home in Tokyo, a city in Japan. It is important to distinguish this because there is also the prefecture of Tokyo or Tokyo metropolis. A prefecture is like a state or province Also equally important to distinguish is that we’re not talking about the Tokyo metropolitan area, which includes multiple prefectures and cities and has over 30 million residents Nope, that’s not the Tokyo we’re talking about either. We are talking about the 23 special wards of Tokyo that contain roughly 9 million people In English, the wards call themselves cities, but they’re closer in terms of function to what a borough of London would be. In any case, the specific ward within Tokyo, I’ll be looking at today is Edogawa. Sidenote, Edo is the old name of the city of Tokyo and Gawa means river. So the ward name literally translates into Edo River. Edogawa city is on the eastern edge of Tokyo If you go any further and across the Edogawa River you’ll find yourself in the prefecture of Chiba. Now you might be thinking, okay, so this place is on the outskirts of Tokyo Well now not really. It’s a 34 minute train ride from Mizue Station to Shinsen-Shinjuku Station which is at the heart of the Shinjuku, the major government and business district in Tokyo. It’s a 14 minute train ride from Kasai Station to the literal heart of Tokyo, Nihombashi Station. Where the Nihombashi Bridge is located. Nihom means Japan and Bashi means bridge, so the name directly translates into Japan Bridge. and it’s the point from which all distances to the capital are measured. My point with the map and distances is that depending on where you live in Edogawa and where you want to go in Tokyo, you can be anywhere from a 15 to 16 minute train ride away Even though Edogawa is on the eastern edge, you’re still very close to the thick of things in Tokyo not often the boonies and yes you can go out to the boonies in the prefecture of Tokyo, like when I visited Okutama in the far west. Even though we could easily get to more popular parts of Tokyo from Edogawa Edogawa is still a populous area with all the amenities you could want You don’t need to own a car, besides commuting to work, you don’t really need to leave the area if you don’t want to. To get an idea of the density of Edogawa, the population is roughly 700,000, all living in 49 square kilometres. That’s 13,750 people per square kilometre, to compare, The Bronx, a borough in New York has 13,231 people per square kilometre. Although I’ve never been to The Bronx and can’t compare the feel of the neighbourhoods, on paper the density as well as the proximity to major attractions are quite similar. So what does the housing look like? Let’s go on a quick tour Right now we are looking at homes that are 30 to 50 years old most of these homes no longer have any value, so if an owner were to sell they’d most likely be bulldozed and rebuilt. Accordingly, it’s quite common to witness demolition scenes like this. Once the homes are demolished, new ones are put in their place and it’s not uncommon for two houses to be built where there use to be one. And here’s what some recently built housing looks like Some called these “pencil” homes, as they’re tall and skinny not all of them are pencil shaped though. In addition to single family homes there are a couple main kinds of multi-family housing, these are called apartos, which come from the word apartment. They’re generally 2 or 3 storey units, built of wood and they would normally be rented by singles or couples. When people talk about cheap Japanese housing with paper thin walls I think this is usually the type of buildings they’re referring to. These are called mansions, as in mansion and despite the grand name, they’re apartment buildings made with reinforced concrete. They’re are generally 3 or more stories and the units will be bigger than the apartos and thus be better suited for families. Some of these buildings will be for rental, while others will be condos that are owned by individuals. Some mansions are also owned by the city and used for affordable rental housing you often see many of these buildings clustered together. A dead giveaway is that if you see numbers on the sides of the buildings. You might find yourself wondering, is the housing really affordable for the average earner in Japan and if so, why? One thing you need to know is that in the past 25 years, Japan has grown in population by about 3 percent. Whereas countries like the US and Canada have grown around 30 percent. After the bubble burst in Japan in the early 90’s, land prices never recovered to their formal peaks. It’s been expected that owning a house is not an investment but a depreciating asset. In recent years, pricing has levelled out and even grown in Tokyo but with the population of Tokyo set to decline in the future property growth is far away from being certain. Despite the precipitous drop in housing prices after the bubble land is still expensive in Tokyo. For example, this plot of land in Edogawa is roughly worth 3 thousand dollars a square metre Where I used to live in Burnaby, a city in metro Vancouver It’s about 2 thousand 5 hundred a square metre, so fairly comparable. However, since lot sizes in Burnaby can be from 5 to 10 times the size of those in Edogawa the density in Burnaby is only 2,464 people per square kilometre. Edogawa is 5 times as dense, which is a big reason why homes in Edogawa can be in reach for the average household. If you want a single detached house where I used to live it’s go big or no home. A tricky part when talking about affordable, is that you need to define exactly who it’s affordable for. The median annual household income in Japan is 37 thousand dollars in comparison, it’s 41 thousand in Canada and 44 thousand in the US. By the way, this median stat means that half the families make more than that amount, and half make less. Now that 37 thousand dollar number is for the whole of Japan. In Edogawa, it’s 43 thousand.
What can a family making that afford? The maximum borrowable amount, with no down deposit, is about 300 thousand dollars with 15 percent down, that number bumps up to 350 thousand dollars. On the really cheap and small end for new single detached housing, you can get in for a bit over 200 thousand dollars. However, I’d say a low end is more like 300 thousand, with mid-range going for about 400 thousand. Custom and/or concrete housing will most likely be over 500 thousand. The biggest factor in home pricing is almost always the land which is about 70 percent of the price. but of course that really depends on the location. Let’s talk about mortgages. Beyond the sticker price, the real cost of a home includes the interest that you’ll pay on a mortgage over the years. Interest rates are always changing, but let me say that you can rather easily get a variable rate of 1 percent in Japan right now. The Japanese government also supports a FLAT 35 loan which means you can lock in a fixed percentage for up to 35 years. Depending on your down deposit, bank, and length of loan the rate can be anywhere from 1 to 2 percent. On a 300 thousand dollar house, a 1 percent interest rate for a 35 year mortgage is 850 dollars a month. At at 3 percent rate, the monthly payment becomes eleven fifty a month, a 35 percent increase. So yeah, interest rates make a huge difference. Let’s talk about zoning and this is where I got to give props to Japan’s zoning laws. In Japan, the zoning laws for buildings are prescribed at a national level which all municipalities have to follow. hey can make some exceptions, but by and large they have to follow what the national government dictates. And the zoning laws are rather straightforward. There are 12 zones The first one being a type of residental zone each subsequent zone allows for more and bigger types of buildings. It goes like this all the way up to industrial zones, for things like factories or gas refineries. The magic in the zoning laws is that whatever is allowed in zone 1, is also allowed in the following zones. With some exceptions you can build residential housing anywhere. You can also run small businesses like a little café within your home, right in residential areas. This is called mixed use, and this means that there’s nothing stopping someone from opening up a small shop in a residential neighbourhood. So that’s why you can generally walk to a convenient or grocery store and get most of your daily needs without owning a car. Once you get into the more dense zones, you see the mixed use come even more into play. This is where you can have a big 20 story condominium next to a single detached home. Everything is fair game as long as you follow the rules on how big a portion of the lot the building can sit on, how tall it can be, and how much light you can block. Not only that, you can also end up being able to build on really small parcels of land. The minimum legal street frontage for a house is 2 metres enough width for a car to be parked on the block. So while land is expensive in Tokyo the ability to purchase small parcels of land makes it possible for the middle class to own a home whether it be a condo or single detached house. From walking around the neighbourhood and seeing all the new starts the minimum parcel of land for a 3 or 4 LDK seems to be around 60 square meters or about 650 square feet. After scanning through the pile of new home flyers I picked up I’d say the average is about one-third more than that in size. So think 80 square metres, or about 860 square feet. Something interesting about the plots of land is that since they are not necessarily perfect square or rectangles the amount of usable space depends on the shape. In that way, a 75 square metre lot may be as practically useful as a 60 square metre one and you’ll see lots of dissimilar sizes right next to each other priced the same. The Financial Times talks about why Tokyo is the land of rising home construction but not prices. Takahiko Noguchi, head of planning section in Minato Ward explains why. “There is no legal restraint on demolishing a building,” he says. “People have the right to use their land so basically neighbouring people have no right to stop development.” Right, so provided you follow zoning regulations, you’re A-OK to build. Woah, woah, woah! What’s with the 80’s music. I was thinking the same thing myself. I mean, I was born in the 80’s, maybe it’s my subconscious trying to bring me back to a time a time where my father in his 20’s could afford a new home and support the entire family on his wage alone. Ah, the good old days! But back on topic. I’m sure you must be wondering Is Tokyo or Japan really a good place to live? And maybe you’re thinking The houses you showed didn’t even have yards and aren’t they small and cramped? Also, you may have heard that in Japan, homes only last 30 years and there are tons of abandoned buildings! Yeah, yeah, I hear ya. I’m making videos that talk about those topics and also have some new home tours to show you, hang tight. In the meantime, feel free to ask some questions in the comments section. And before I forget, I want to give a shout out to all those who support these mini-docs through Patreon. Thank you so much! As always, thanks for watching and will catch you on the flipside.

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100 thoughts on “How an Average Family in Tokyo Can Buy a New Home

  1. CORRECTION: The stats I gave for median annual household incomes in the United States and Canada are not quite right. I explain why in this video https://www.youtube.com/watch?v=61FnnmvFhHY. The numbers should have been higher for both countries.

  2. I have my businesses in indonesia. I live in indonesia. But i woildnt mind at all to buy a house in the outer part of tokyo for family holidays once or twice a year. Wouldnt be a bad Investment, can also put the house in rnb whilst we're not there.

  3. This is great! Really explains the housing situation well. People think Tokyo is so expensive, but (comparing to other large cities) it's not so much. Plus I'm trained as a planner, so totally into the nerdy zoning analysis 😉

  4. Edogawa and neighbouring wards are the least popular residential area in tokyo metropolitan area because of bad reputation so it's cheap although it's one of 23 wards. cheaper than Omiya in Saitama which is like 40 mins by train from shinjuku.
    kanagawa prefecture is the most popular residential area in tokyo metropolitan area.
    the average price for house is 10 million yen cheaper than apartments in tokyo metropolitan area because house is far from station. if you go chiba side, rent and house price are cheaper.
    the average house price in tokyo metropolitan area is 54 million yen or 490k usd.

  5. Guys,girls trust me,this guy has the most superfiscal shallow knowledge of this or any subject in Japan. I live here over 30 years. He sounds like a computer voice of wikipedia,

  6. Does anyone want to buy a house in Detroit? talk about stinky Americans who have to use soap.

  7. Housing in Canada is faaaaar more expensive. A house like that would cost upwards of 1.2-1.3 million CAD in Vancouver or Toronto.

  8. i couldnt stand living 3 feet from any other building with paper walls and a max width of 2 meters for a room. also the fact that there just pavement everywhere and no grass or trees near the road reminds me of wolfenstien's Nazis just concrete and giant structures everywhere(now dont get me wrong how they do it looks insane like the sith empire in star wars, how the japanese do, it looks terrible)

  9. Youtube comments are full of amusements sometimes….
    https://chrome.google.com/webstore/detail/threelly-ai-for-youtube/dfohlnjmjiipcppekkbhbabjbnikkibo

  10. I really like the mix-use zones of the residential areas, really makes you feel connected with the communities, where in America I can't even get out of my home owner community without a car..

  11. the houses are on the small side is that normal in tokyo, because i have a friend living on the north site of Japan and the houses are bigger there

  12. I live 45 minutes from NYC in the surrounding suburbs and the housing shortage is severe and prices are out of control. A 3 bedroom from the 1960s goes for $500k minimum, and most homes are single-family since zoning laws and codes here are incredibly strict and the NIMBY mentality runs rampant here. I haven't seen that many new houses built here since I was in middle school, and I've lived here since birth (2001). Development takes forever and politicians don't seem to care, a common theme in many American cities.

  13. Don't you ever come to Philippines again and disrespect everything about the country. I hope next time you go there you get mugged and beaten you damn midget.

  14. Wow35 year loan the banks dont even want you to do 25 years here houses would be so much more affordable if you have 35 years to pay them off.

  15. Vancouver ain't that bad. Try the SF bay area where the median price of homes is 1 million usd plus. My brother and 2 of my friends recently bought homes. 1.2 to 1.3 million each… and 2 of the 3 homes were unupgraded homes built in the early 80s…. 😪

    No one can afford to buy anything here unless they're engineering couples making $350k to 400k plus a year.

  16. I prefer this than “only in Japan”. He’s just too annoying. You are cool, stay that way man.

  17. Those zoning laws sound like a step up from the Byzantine ones a lot of Western municipalities have.

  18. 人类发展指数和房价有什么关系……中国人类发展指数那么低 房价世界第一 另外联合国发布的就是权威?本身联合国就是一个低效无能腐败的组织 长期跟中国勾兑 联合国教科文组织 人权理事会都被中国收买 它发布的数据有什么可信度?和英国economist 美国福布斯差不多水平 日本人类开发指数不到0.9?只排二十位?得了吧 就是骗骗你们无知百姓而已 看看日本的城市环境 看看日本的治安 还有日本的收入 福利 以及日本现在的经济形势 看看日本的教育水平 基础科研能力 企业创新能力 综合国力 国民生活水平 你就知道把日本的人类发展指数定为不到0.9 排到二十位不是日本的耻辱 而是联合国及其腐败官员的耻辱!

  19. This seriously hurts as someone who lives in Toronto. I will likely never be able to afford to buy a home here and will probably have to leave the city eventually.

  20. A person living in mumbai could afford a house in surrounding cities if he has already saved up the average indian income for 20 years. I think one can forget about getting one even in those areas if they start collecting that much now.

  21. I'm from New York City and I think that had a lot to do with why I loved Tokyo so much when I lived in Japan.

  22. Buying land or a house in Beijing, China is impossible for the average family unless u want to be in debt for like three generations…

  23. I'm jealous of their rational leaders. In the US Baby Boomer homeowners can object to affordable housing from being built for reasons like "it doesn't fit the neighborhood's character" or "it's blocking out the sun".

  24. very interesting but the last video you we're filming your new home and when you filmed your spare room ,but you said YOUR EARTHQUAKE SAFETY BAG , BUT WANT REALLY WORRY ME IS , HOW SAFE ARE YOUR HOUSES AGAIST EARTHQUAKE. You show us and upper view how close the homes are , why do all new homes which you have are one ,they are coloured GREY, there are No gardens ,.so how do you put colours outside and the reason for this question is ,. I am a great Fan of Japanese Gardens and plants my suzannah and i am from UNITED KINGDOM

  25. I love that Japan is a bit "messy", for a lack of a better word. I prefer it over American or Canadian suburbs.

  26. Do people normally have home insurance to cover natural disasters like earthquake, flooding, tsunami? Will the payout be adequate to rebuild the house?

  27. So glad you mentioned Kasai! I lived there for 3 years (back to Canada now) and am now considering buying a condo there.

  28. Can you do a video about working as a medical professional in japan? It would greatly help! Thanks

  29. That's crazy different from what I was expecting.
    I didn't think about Japan's slow population growth pretty much eliminating the need for big new expansions, leading to old houses being sold, torn down and then a new one built atop it. Where I come from it's mostly cheaper to simply buy a new plot of land in an expansion area and build your house there, saving the deconstruction costs.
    I also didn't think that property wasn't viewed as an investment in an area as crowded as Japan. Over here, the safest investment for your money is pretty much building a small apartment complex, sell a few units and rent the other ones. As long as you own the land, you're pretty much golden.

  30. These are the homes most anime MC live in, or bigger. Yeah the parents may not always be home, but when you stop to think how huge their home is you realize they have yen for days.
    Also note to self look at areas other than Tokyo for possible housing. To rich for my blood in reasonable years of work.

  31. Most livable city?? Then why do Japanese expats cry when they leave India?? They dont want to back to Japan!! I own a 3 storey house in New Delhi only a billionaire will be able to buy so much space in Japan!!

  32. wait what??? so a house that costs 300k
    about 70 percent is the land??? where i live the avrage house it self with out the land is about 250k
    and the land is around 550k

  33. I'm sorry but it seems like the voice over is running out of breath? Or like there's a saliva build up in his mouth or like the tongue somehow blocks the smooth delivery of words? Idk. It's just me. I didn't finish watching. The topic's good though.

  34. 来说说大陆房价呗,$1,000,000USD 在上海市内环可以买一个套内面积60平方米的紧凑两居室“豪宅”。日本的房价太便宜啦。我们一套顶你们十套价格有没有 XD

  35. this is really good coverage, How about sharing the post purchase, there should be many regular and some unexpected cost after owning house.|
    Tax, subsidies, insurance (fire, earthquake, tsunami), maintenance of the house.
    and I heard there's tax for transferring ownership of house. do we have similar tax for purchasing house?

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