For new condo apartments, the report found that government charges can add up to as much as C$124,582 per unit. That's about 50% higher than the average unit in the U.S. and about 30% higher than the average unit in Canada (see above chart for the list of cities). While all of us in the industry can appreciate this, I don't think most homeowners and tenants understand this. Hopefully they're reading this post.
Chart: Bloomberg
River Davis' recent article in the Wall Street Journal about Tokyo's generally flat home prices had me, again, wondering about demographics. I mean, aren't their demographics working in reverse? They have an aging population, low immigration, and a low birthrate. But Tokyo, which represents about 11% of Japan's total population, is still growing. And their home price index looks like this compared to San Francisco and New York:
Davis' argument, which of course has been made by others before, is that deregulation has allowed housing supply to actually keep up with demand. Land use policies were relaxed to allow taller and denser buildings to be built and some degree of decision making (I'm not sure how much) was moved to the central government in order to counteract the NIMBY problem that invariably attaches itself to local politics.
The University of Toronto School of Cities recently looked at the changing economic geography of Fortune 500 companies across the US from 1975 to 2017. Here is a diagram of the results taken from CityLab:
New York sits at the top with 70 corporate headquarters as of 2017. But the San Francisco Bay Area is now the second largest center with 35 headquarters – a testament to tech.
The study does, however, omit service firms, as these weren’t tracked in Fortune’s list back in 1975.
Also noteworthy is the specialization that has taken place across specific cities and regions. Here is another excerpt from CityLab:
America’s headquarters geography reflects the substantial variation and specialization of the U.S. economy. New York leads in finance and business services, consumer services, and goods and materials. But Houston leads in energy, San Jose in tech, and Chicago in retail and wholesale. Chicago also ranks second in consumer services, and goods and materials, and Dallas takes third in energy. Other cities like Nashville and Minneapolis take third in consumer services, and goods and materials, respectively.
The full article can be found, here.
For new condo apartments, the report found that government charges can add up to as much as C$124,582 per unit. That's about 50% higher than the average unit in the U.S. and about 30% higher than the average unit in Canada (see above chart for the list of cities). While all of us in the industry can appreciate this, I don't think most homeowners and tenants understand this. Hopefully they're reading this post.
Chart: Bloomberg
River Davis' recent article in the Wall Street Journal about Tokyo's generally flat home prices had me, again, wondering about demographics. I mean, aren't their demographics working in reverse? They have an aging population, low immigration, and a low birthrate. But Tokyo, which represents about 11% of Japan's total population, is still growing. And their home price index looks like this compared to San Francisco and New York:
Davis' argument, which of course has been made by others before, is that deregulation has allowed housing supply to actually keep up with demand. Land use policies were relaxed to allow taller and denser buildings to be built and some degree of decision making (I'm not sure how much) was moved to the central government in order to counteract the NIMBY problem that invariably attaches itself to local politics.
The University of Toronto School of Cities recently looked at the changing economic geography of Fortune 500 companies across the US from 1975 to 2017. Here is a diagram of the results taken from CityLab:
New York sits at the top with 70 corporate headquarters as of 2017. But the San Francisco Bay Area is now the second largest center with 35 headquarters – a testament to tech.
The study does, however, omit service firms, as these weren’t tracked in Fortune’s list back in 1975.
Also noteworthy is the specialization that has taken place across specific cities and regions. Here is another excerpt from CityLab:
America’s headquarters geography reflects the substantial variation and specialization of the U.S. economy. New York leads in finance and business services, consumer services, and goods and materials. But Houston leads in energy, San Jose in tech, and Chicago in retail and wholesale. Chicago also ranks second in consumer services, and goods and materials, and Dallas takes third in energy. Other cities like Nashville and Minneapolis take third in consumer services, and goods and materials, respectively.
The full article can be found, here.
The result is housing numbers that look and compare like this:
In Tokyo last year, housing starts came in around 145,000, according to Japan’s land ministry. This figure is on par with the total number of new housing units authorized last year in New York, Los Angeles, Boston and Houston combined, based on the U.S. Census Bureau data. The same feat was achieved in 2017.
If we are to normalize against New York, it looks like this:
And the belief seems to be that it is working:
“A reason why housing prices in Japan are not rising as fast as in New York, for example, is the large number of housing starts,” says Masahiro Kobayashi, a director general at the Japan Housing Finance Agency, a state-run entity which supports the housing market by purchasing home loans.
One sentence that really stood out for me in the article is this one here: "Private consultants were given permission to issue building permits to speed up construction." If any of you have tried to pull a building permit for a large project in Toronto, you'll know that it can take a very long time (understatement). Maybe it is the same in your city. Should we be looking at this?
Charts: WSJ
The result is housing numbers that look and compare like this:
In Tokyo last year, housing starts came in around 145,000, according to Japan’s land ministry. This figure is on par with the total number of new housing units authorized last year in New York, Los Angeles, Boston and Houston combined, based on the U.S. Census Bureau data. The same feat was achieved in 2017.
If we are to normalize against New York, it looks like this:
And the belief seems to be that it is working:
“A reason why housing prices in Japan are not rising as fast as in New York, for example, is the large number of housing starts,” says Masahiro Kobayashi, a director general at the Japan Housing Finance Agency, a state-run entity which supports the housing market by purchasing home loans.
One sentence that really stood out for me in the article is this one here: "Private consultants were given permission to issue building permits to speed up construction." If any of you have tried to pull a building permit for a large project in Toronto, you'll know that it can take a very long time (understatement). Maybe it is the same in your city. Should we be looking at this?
Charts: WSJ
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