Comment by SECProto
3 years ago
> The housing space metrics seem very far off from my experience
I have friend living in Tokyo paying <10万円 in rent for a (very small) single unit. A couple other friends share a larger unit and pay similar per person. All are in the 23 wards. This is unimaginable for other friends living in Paris (one of the 20 Arrondissements) and New York (one of the 5 boroughs), regardless of size. I have no anecdata on London.
Regarding size, I was far more comfortable living in a ~550sqft 1LDK in Japan than I ever was in 800sqft-1000sqft apartments in North America - everything is geared to living in tighter quarters (from furniture to fridge to food packaging) making it much more convenient than trying to fit a full size couch into a small western apartment, or trying to save by bulk buying ingredients when you don't have the space to store it.
So I think the title of the article is half right (rent is cheaper than you'd think), missing some key info (wages are also cheaper than you'd think), half of it is roughly incorrect (housing is not any more spacious than you'd think), and the article itself doesn't back it up well.
I never mentioned anything about prices though :)
550sqft (52sqm) for a single person is unheard of here. Look at the article I shared, unfortunately it cuts off at 30sqm, meaning ALL the houses of 30sqm or more make up 22% of the total. Assuming a normal distribution that peaks around 20sqm/person, you should've lived in the top 1-2% of Tokyo.
I feel like Paris' 20 Arrondissements is too small, comparable to Zone 1 of London and "Yamanote area" in Tokyo, while New York 5 boroughs is a lot bigger and more comparable with 23 Wards. But anyway let's go with it, since at least it's much better than comparing it with Tokyo Metropolitan. With Airbnb (which is usually a lot more expensive than long-term rental) I can find a bunch of places for under 1k USD:
https://imgur.com/a/FIODYlo
For London I could literally not find any, and for Tokyo also a bunch of places (you might notice that these are way further from the center than the area of Paris, but hey I said that was fair):
https://imgur.com/a/0XEvBcT
So it seems that London is particularly expensive, similar to Tokyo's Yamanote; while Paris 20 Arrondissements are at a similar place as Tokyo 23 wards.
C'mon mate you can't be for real, you can't just look at Airbnb data and make any conclusions about rent from that. They literally target different audiences.
People living in Tokyo don't check AirBNB to find apartments to rent
Unfortunately, the sites they DO use are entirely in Japanese, so you're not going to be able to get usfeful infographic data in a few minutes
AirBNB is extremely unpopular in Japan, it's not a good comparison for anything. Searching on Suumo I can see over 100,000 apartments over 50m^2 listed (which doesn't prove much of anything, but gives an idea).
Run SUUMO or Homes through Google translate and you’ll probably get a good idea of the rent level
Yes, my 550sqft (was a very rough size approximation, 5 yrs ago from memory) was certainly not in Tokyo, and the 4万 (plus utilities) that I paid for rent was seen as expensive. I was just using it as a basis to show that straight space comparisons between japan residences and north american residences aren't reasonable, as everything is geared to smaller living.
I live in a 95sqm apartment in the city for 26万/m, and I'm in an expensive area. When I was looking for apartments, I found lots of 60+sqm apartments for <20万/m even in some of the pricer areas. For standalone houses, you can find plenty of 70+sqm houses for purchase at ~5000万, which would have a mortgage of around 15万 a month.
It's important to note that you can get a mortgage at a rate somewhere between 0.6-1.6%, which means that even for seemingly high prices, you can buy something and have a surprisingly low mortgage cost.
Yes, the numbers are a bit skewed by the fact that more people live alone in Tokyo than Paris or NYC, but it's definitely true that you get more square meters per $ in Tokyo. Also, it is true that people on Tokyo on average earn less than NYC, London and Paris, but they also spend a smaller percentage of their total income on housing, so housing is cheaper in PPP terms too. I'll dig out the exact numbers tomorrow if anyone is interested, but now I'm out in one of Tokyo's extremely cheap bar districts having skewers and beers for less than $10
Do you know numbers about how much housing is sponsored by the companies in Japan? Maybe that's what is making the difference since it's not counted neither as salary, nor as the price of the house? I know some large companies sponsor partially or totally the housing of thousands of their employees, again skewing prices greatly.
For example if Tanaka's salary is $500 lower because the company is partially paying for their place, that means on paper his salary is lower, the price of the place is MUCH lower, and the ratio of housing/salary is also lower, than if he received those $500 and then used it to pay for the house.
In Tokyo, you can work as a part time janitor and make enough to live in a 500 square foot place within a 30 minute commute by train
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They aren't from my experience working in two major Japanese companies. Sometimes they'll pay your network bill if WFH is allowed, but that's basically it. Not sure about smaller companies, but honestly, I'd be surprised.
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There's a tax savings thing that companies do, where the lease is done in their name, and your rent is deducted from your paycheck. It's beneficial for both you and the employer, so it's pretty common.
I don't think it's extremely common to live in actual employer provided housing.
I lived 3 mins from Asagaya station (10 mins to Shinjuku) with my wife in a 23m2 apartment for 70k yen ($475) and loved it, very sunny apartment in a bustling neighborhood, tons of great street life, with everything I needed arranged very compactly. It requires an adjustment that location, not space, is the luxury (don’t invite friends over, go places with them). Probably part of why there are always so many people on the streets everywhere.
I lived in 250sqft with a shared bathroom in NYC for 2 years and loved it. Loved in 800 sqft in suburban America for 4 months and couldn’t handle it. In a big city with affordable Third Spaces you can simply live outside of your apartment.
The thing is that you’re not living in your apt. You live in the city with all the buzz.
In the suburbs you’ll have to get that buzz in your house somehow
Generally you move to the suburbs to get away from the buzz.
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10万円 = 100,000 yen, which is about:
USD 675.18
EURO 683.40
GBP 588.43
For anyone who is interested but too lazy to search
To be clear, in the last one year, the Japanese yen vs US dollar has declined by about 23%: 148 JPY/USD vs 114 JPY/USD. As a result, "dollarised" Tokyo real estate suddenly looks very cheap. For foreign investors / foreign captial, yes, this is true. For local residents / local investors, there is still almost zero inflation here. As a result, local real estate prices are mostly unaffected by USD/JPY FX rates.
When looking at real estate expenses from perspective of local residents, it is always best to look at local currency median income. If median income or real estate prices are unchanged relative to local currency median income, who cares(!). The rest is just an article in a financial newspaper!
We need a disclaimer since from ~last month FX has gone crazy, whether we are using old or new numbers. For me I'm still thinking 10万円 is:
USD ~1000 (a bit less, but just insignificant)
EUR 800~900
And virtually all articles you find today regarding real estate, USD vs JPY, etc. will be talking with old numbers. It's important to talk about the new numbers, but I'd wait a bit for them to stabilize before being "acktually the yen now is" in articles (I'm not saying parent comment is doing that, just warning that those people are everywhere).
In terms of costs of living and salary percentage, 100,000 yen feels like it's around $1000 or so.
For context, a new grad will probably end up making around 200,000 - 250,000 yen (before taxes) a month at a lot of places.
Note that the JPY lost about 30% of value this year, while rent (nor wages, nor cost of living) haven't caught up to those figures. For the past few years, the JPY/USD rate was around 110.