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From an upvoted comment:

Size of an apartment isn't very good measure of how rich some is. Let's say a house that would make you filthy rich in Tokyo might be considered tiny rathole in Australia.

(It's comparing a capital city against a country, which isn't a fair comparison)

For the same size, and for for a vaguely comparable city population (comparing Tokyo against Sydney, rather than Bourke), is residential real estate in Australia significantly cheaper than real estate in Japan?

Reasons why I'm skeptical about this claim:

  1. People have stereotypes about asian people living in very crowded conditions.
  2. People have a stereotype about the "real Australia" being the outback, even though Australia is a very urbanized country. By contrast, people's stereotypes about Japan usually feature metropolises such as Tokyo.
  3. People have a stereotype about prices in general in Japan being very high, probably based on reports about Japan during the bubble economy. Including the oft-cited claim that the land under the Imperial Palace had an estimated value greater than all the real estate in California.
  4. My experience with real estate in Sydney! (That, and the experience of a Japanese person also living in Sydney, who mentioned that she'd also heard westerners claim that Japan real estate is very expensive)

Another examples of people claiming Japan real estate prices are expensive: link.

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Andrew Grimm
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  • The original comment was Tokyo vs Australia. It was to make a point about comparative value, it wasn't suggesting that the entirety of Japan is like Tokyo or that Australia has no cities. It's not a very useful comparison, but in what way is that not a "fair" comparison? Would you have asked a similar question if the claim had been Tokyo vs Rural Japan, or the average across all of Japan? You've then asked a different question: is real estate in Tokyo more expensive than in Sydney? Can you provide an example of notoriety for that claim? – Ian Mar 08 '13 at 10:15
  • btw. "For the same size, is real estate cheaper in Australia than Japan?" is valid question, but if you want to compare as per my comment, you should ask "Is average size of house owned/rented in Australia significantly bigger than in Japan?". – vartec Mar 08 '13 at 10:50
  • @Ian I explained why it wasn't a fair comparison. Also, notoriety added. – Andrew Grimm Mar 08 '13 at 11:03
  • @AndrewGrimm You said "It's comparing a capital city against a country, which isn't a fair comparison". But what is the criterion for fair? Is "a planet is bigger than a leaf" an unfair comparison because they're not the same type of thing? The comment wasn't suggesting that a single city was similar to an entire nation, only that an average real estate price for each was notably different. As I already asked: would you have complained if the comment had said that "Let's say a house that would make you filthy rich in Tokyo might be considered tiny rathole by the national average" – Ian Mar 08 '13 at 11:38
  • @Ian I probably wouldn't have complained if it compared Tokyo versus the rest of Japan, because I wouldn't have been worried that stereotyping of nationalities and/or ethnicities was involved. – Andrew Grimm Mar 10 '13 at 01:31
  • why skeptical about the assertion that real estate prices in densely populated Japan are higher than in sparsely populated Australia? It's common sense, and seen all over the world. When I bought a house outside Amsterdam 5 years ago, a friend in the US who was a real estate broker showed me what I could have bought in rural Texas for that money, it was at least about 10 times the size. Lower population density makes land much less scarce, which lowers prices accordingly. – jwenting May 27 '13 at 11:16
  • Please give references for your claims that people have these stereotypes. You don't need to justify your skepticism in order for a question to be answered, but if you do, those additional statements should be referenced, especially because the question can be answered without them. –  May 27 '13 at 15:45
  • @jwenting you must not be familiar with real estate prices in Australia. – Andrew Grimm May 29 '13 at 03:04
  • @AndrewGrimm indeed, but neither are you I guess. And do realise that prices will differ wildly across a country, especially one the size of Australia. Wouldn't surprise me in the least if you could get a 100 hectare ranch in the interior cheaper than a 50sqm apartment in Sydney for example. – jwenting May 29 '13 at 05:36

2 Answers2

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It depends on the city, according to Numbeo

Price per Square Meter to Buy Apartment (8th March 2013) 

                      Adelaide        Tokyo            Difference
 in City Centre       3,200.00 A$     6,154.31 A$       +92.32 %
 Outside of Centre    3,000.00 A$     7,180.02 A$      +139.33 %
 Contributors               70              86    
 (past 18 months)

It depends which cities you pick, here's the two capital cities (8th March 2013)

                      Canberra        Tokyo
 City Centre          6,000.00 A$     6,154.31 A$       +2.57 %
 Outside of Centre    4,500.00 A$     7,180.02 A$      +59.56 %
 Contributors               69              86    
 (past 18 months)

Lastly is Sydney which is largest city in Australia (4th June 2013)

                     Sydney           Tokyo
 City Centre         10,000.00 A$     6,179.78 A$      -38.20 % 
 Outside of Centre    6,000.00 A$     5,149.82 A$      -14.17 %
 Contributors              306              98
 (past 18 months)

According to Global property guide for Australia and Japan (8th Mars 2013)

                          Australia   Japan
 Square Metre Prices      $8,717      $15,122
Oddthinking
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    Using Canberra, because it is a capital city, is misleading; it is hardly the most populous city in Australia. – Oddthinking Mar 08 '13 at 11:13
  • And Adelaide is a comparatively cheap city too. – Andrew Grimm Mar 08 '13 at 11:31
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    [Sydney comparison](http://www.numbeo.com/property-investment/compare_cities.jsp?country1=Australia&country2=Japan&city1=Sydney&city2=Tokyo). General impression: renting anywhere and buying in the city centre is more expensive in Sydney. Outside the city centre Tokyo is more expensive. Also Australians earn more... and this is just as important as the raw prices. – Ladadadada Mar 08 '13 at 18:35
  • Reading through this, I'm wondering if comparing square meters might be a flawed methodology. If the average size in Tokyo is 100 sq.m. and 150 sq.m. in Sydney, the buying the comparable property in Tokyo (i.e. 150 sq.m) might be *more* expensive due to the larger size. In other words, we need to make we are using math that corrects for comps and not just straight means. – rjzii Jun 04 '13 at 17:56
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    One problem in doing a comparison is that the depreciation of property in Japan is pretty severe; twenty year old flats, for instance, are pretty much half of their new price. – Ken Y-N Jun 05 '13 at 03:27
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    @KenY-N Indeed, I remember reading awhile back that the Japanese are more likely to tear down and build new than they are to renovate an existing home. – rjzii Jun 05 '13 at 11:41
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While "For the same size, is real estate cheaper in Australia than Japan?" is valid question which has been pretty much answered, I don't quite agree that it's what the comment was about. I was about sizes of houses. So how do these compare?

Housing and Land Survey conducted in 2003 by Japanese the Ministry of Internal Affairs and Communications concluded that the average total floor area in was 94.85m².

According to Australian Bureau of Statistics average total floor area of a new residence in years 2002-2003 in Australia has 205.7m² (227.6 m for houses). Of course that's just new buildings. So to make comparison fair, lets also take look at averages from 20 years ago — it was 149.7m².

See also: "Australian homes still the world's biggest" in The Sydney Morning Herald.

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vartec
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  • You should also include property acreage - it has tangible value, both real and monetary. – user5341 Mar 08 '13 at 15:14
  • and include total price of the property as compared to income. Does a 200sqm property in Australia cost more or less than a 95sqm property as a percentage of the buyer's income (and what about the upkeep cost). – jwenting May 27 '13 at 11:18
  • @jwenting: I'm not sure if that's relevant. Being "a rat hole" is rather comparison with sizes of other flats, rather than comparison with financial possibilities. Let me give you two 1st had examples Spain, where people would refuse to buy small flats. But they would spend absolutely impossible amounts in relation to their salaries. And get 60-years mortgages. Most Spaniards would consider 40m² flat "a rat hole", OTOH, for example in Poland it would be average size flat for a couple, but the people would spend 5-6 times less in relation to their salaries on the flat. – vartec May 27 '13 at 11:44
  • @vartec it can however be relevant. A guy in Kenia may be offered a hectare of land at $0.50 a meter, where in the Netherlands he'd pay $50 a meter for 100 square meters. But he'd not buy it because he can't afford it where in the Netherlands it'd be considered a reasonable price. They'd as you'll notice pay the same total amount, but on a completely different income. – jwenting May 27 '13 at 13:22
  • @jwenting: true, however, I purposely don't mention prices at all. I'm comparing the sizes of Japanese and Australian homes. Again, a "rat hole" isn't any absolute measure, it's rather relative to size of your peers' homes. If you live in 80m² apartment, it'll be perceived completely different if all your peers have 200+m² houses than if all your peers live in apartments 50-80m². It's also related to the fact, that "being rich" is also perceived in relation to peers, rather than absolute number. – vartec May 27 '13 at 14:01