Cheaper to buy a house in Tokyo than Spain

I've finally seen a statistic I've been very curious about for a long time: the average price/m2 of housing in Tokyo and for Japan as a whole.

Well, it was worth the wait, because it's quite shocking!

But first, a couple of points to introduce my interest in the matter. Unless you've been living in a cave, you're very likely aware of the great worldwide boom in property prices, particularly in Europe and the US. Prices have gone up so much in the past 10-15 years, depending on the country, that many are now either worried about a massive bubble "pop" (or "hiss", if you're Paul Krugman).

We know that Japan experienced a crazy property boom in the 80s that peaked in the early 90's. It was in the news that property prices have gone down *every single year* in Japan since 1992! That's a sobering thought- 13 straight years of negative equity for the poor sucker who bought at the top in '92.

Now, I've found it curious that property prices would go down for 13 years in a row, whilst Tokyo still routinely comes out top of the charts as the world's most expensive city. Does this mean that Tokyo is expensive for taxi rides and buying fruit, but in the single most expensive item on a household budget (housing) it's actually relatively cheap?

Last quarter, Tokyo house prices increased 0.4%, a rather modest increase, but still the first one in 13 years. And published figured showed the average price/m2 in Tokyo to be 3,355 Euros. That would make it about 40% cheaper to buy a flat in Tokyo than in Barcelona, Spain! And let's not even start to compare the economic differences between Barcelona and Tokyo- it's too embarrassing for Barcelona.

Even more shocking is the average house price for Japan as a whole is 820 Euros/m2, and continues to decline! This is below the average house price of the poorest of Spain's regions.

I'm only picking on Spain because it's where I'm spending a lot of time at the moment. But the contrast with the Japanese numbers are even greater when comparing with other parts of developed and developing Europe, and even the US.

Check out some of the utterly absurd prices being paid for dumps in NYC, and the prices in Japan will really wake you up to reality.

Posted