For fear of getting mauled by wading into this topic. Ryan1986 says "Have they noticed that Japan is about the same size as our state of Victoria, but has 5 times the population of the whole of Australia, yet Japan has recently seen over a decade long bear market in Property".
I'm no expert on Japan (and three long duration visits there definitely do not make me an expert) but I think the go is that in order to house all those people (127,000,000 of them) they get by with a little unit or house with very little if any land component. Remember the adage "Land appreciates, buildings depreciate". A typical dwelling in Japan has 4.77 rooms and the average total floor area is 94.85 square metres. Let's compare Sydney (our biggest city) with Tokyo and we can see some interesting reasons why our property market may be bullish v their bearish outlook.
- Sydney has a younger population: 34 years v 44.7 years; Suggests Sydneysiders are still young enough to want to buy a property and have time on their side in terms of being able to pay it off.
- Significantly lower population density 2058persons/sqk v 6000persons/sqk. We clearly have a better opportunity for properties with bigger land component than they do and remember the adage above.
- Considerably faster population growth 2.5% v 0.77% Generally speaking the higher the growth the more dynamic society feels. Growth of population can be connected with economic, cultural and social development of a city, which attracts more and more people who want to live in it. This in itself fuels demand and we all know about economics 101.
Ryan1986 this might explain why Japan has been in a bear property market for so long while Sydney continues to chug a long the way it does. As a personal question do you rent, own or are you mortgaged?
