Housing Market In Tokyo And Sydney

Housing Market In Tokyo And Sydney

Length: 1914 words (5.5 double-spaced pages)

Rating: Excellent

Open Document

Essay Preview

More ↓
The housing market in Tokyo and Sydney

As the development growing faster and faster, new technology and commodities seems hard to sustain people’s appetites, however housing as a most traditionally costly and important commodity in human life is always to be the major issue for economists, socialists, government to concern with. Moreover the housing prices are emerged to be varied and oriented into different direction in different area or nations in this world. But in generally, the Housing price was tending to be increased in last few centuries. There are many factors would effect and determined the housing price, for an instance, demographic reason of population growth; Event reason of disaster would wipe out houses make the area to rebuild etc. But here we only analyze the economic factors would influenced the housing price. In generally the unemployment rate, income, inflation rate, foreign direct investment and public policies etc are all economic factors would be the reason to pull or push the demand and supply to cause the price change of housing. The model of the hedonic-based regression approach (GANG-ZHI FAN ET AL January 2006) is most commonly used and has been utilized extensively to investigate the relationship between house prices and housing characteristics. However, this approach is subject to criticisms arising from potential problems relating to fundamental model assumptions and estimation such as the identification of supply and demand, market disequilibrium, the selection of independent variables, the choice of functional form of hedonic equation and market segmentation. Tokyo and Sydney are to be the two typical examples to illustrate the determinant of the housing price. Especially we will analyses from more specific, for an instance: housing boom and public policies.

Determinants in Sydney and Tokyo:

To extend more widely and more specific about the determinants of the house price, we will illustrate Sydney and Tokyo as the particular example to investigate with. Firstly, compare to the hedonic regression the demand and supply equilibrium would use to determinate these complexities. Basically both city would use demand and supply model to constitute with their circumstance to determinate the prices. But both cities use the different variables to determined the price here As the TSUNAO OKUMURA ( July 1996) stated in ‘Housing Investment and Residential Land Supply in Japan: An Asset Market Approach.’ , it is shown that housing price can determined by the market equilibrium is defined by ‘(i) the household optimization behavior, from which the demand for housing stock and residential land is derived, and (ii) housing industry optimization behavior, from which housing investment and the supply of residential land are derived.

How to Cite this Page

MLA Citation:
"Housing Market In Tokyo And Sydney." 123HelpMe.com. 24 May 2019
    <https://www.123helpme.com/view.asp?id=165429>.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Fixing the Housing Market Essay

- To really be able to fix the housing market, we have to look at how it got so bad to begin with. Banks were giving loans out to people who couldn’t afford to repay them. That was, what I see, as the most detrimental situation regarding the housing market. Are the banks only to blame. Absolutely not. Those people who took those loans with little thought of repercussions also caused this mess. We shouldn’t be borrowing money so loosely and the banks should not have made it so easy. Regardless of cause and effect, we are in this situation and must find ways to deal with it....   [tags: housing market, USA, economy,]

Research Papers
999 words (2.9 pages)

Impact of Urban Renewal on the Sydney Suburb of Pyrmont Essay

- Analyse the impact of urban renewal on the Sydney suburb of Pyrmont. The suburb of Pyrmont on the shores of Sydney Harbour has been transformed by the processes of urban renewal into a thriving cosmopolitan residential area, an efficient and sophisticated business centre, and a popular recreational and tourist hub. Through my own observation of the Pyrmont area, I have seen how the painstaking urban planning efforts for the area have come to fruition, and a focal point of the Harbour foreshore created as a result of this....   [tags: Sydney Harbour, industrial growth, tourism]

Research Papers
1210 words (3.5 pages)

An Investigation into the Housing Market Essay

- An Investigation into the Housing Market Economics Describe and analyse the changes of housing in the local area over the last 5 years The housing market is one of the most talked about topics in the news. I assume this is due to the high influential potential it holds to the rest of the economy. In this essay I will focus on the causes in house prices. I will investigate how prices have changed nationally and locally. I interviewed an Inter counties estate agent to help my investigation and get his views on the situation....   [tags: Housing Economics Essays]

Research Papers
1240 words (3.5 pages)

The 2008 Housing Crisis: A Brief Overview of Causes Essay examples

- ... In the 1990s, the federal government desired more people to own homes in the United States and lenders were urged to make home loans more attainable for a wider consumer base (Melicher & Norton, 2014, p. 168). Banks were now relaxing credit and income standards for mortgage loans. Lending Practices Lending practices were one of the most significant contributors to the housing bubble and subsequent crisis. Up to this point, banks and other lending institutions were very particular about the creditworthiness of the individuals to whom they would lend money....   [tags: market, housing bubble]

Research Papers
1640 words (4.7 pages)

Essay on Tokyo Rose: Iva Ikoku Toguri

- ... A myth began to be dispersed and soon the women were all called “Tokyo Rose” as a whole (Tokyo 3). The reporters of that time were obsessed with finding the biggest story, locating and interviewing the notorious “Tokyo Rose” (Lerner 163). To accomplish their goal, they rewarded anyone who could supply information on the whereabouts of her. A Radio Tokyo employee, Kenkichi Oki, labeled Toguri as “Tokyo Rose” (Iva 1; Lerner 164). As a result, the reporters pursued Toguri and paid her two thousand dollars for her admission to being “Tokyo Rose” and for a private interview (Tokyo 3)....   [tags: Radio Tokyo]

Research Papers
950 words (2.7 pages)

The Root Of The Housing Crisis Essay

- Recent figures show nearly 3 percent of all U.S. home mortgages are now in foreclosure, and experts are saying that number will rise for at least another year. The foreclosures add to the growing pool of unsold homes in a market that has been deteriorating for the past two years. This is driving down prices of all homes, most of those whose owners have never missed a payment. That’s why it is in everyone’s interest to stop this wave of foreclosures and get the unsold inventory off the market as quickly as possible....   [tags: U.S. Housing Market]

Research Papers
959 words (2.7 pages)

The Rise Of The Housing Market Issues Essay

- Upon reading the article and doing some extra research for this paper, I can confidently say that the policies had little in the overall cause of the housing market issues. This does not mean they didn’t have any part to play, just that they aren’t the smoking gun in this case. There are several factors that are involved in an economic situation of this size, not simply the overall policies in place to help stir the economy. The role that monetary polices holds within economies to help battle against inflation and deflation....   [tags: Inflation, Monetary policy, Interest]

Research Papers
723 words (2.1 pages)

The Case Of The Toronto Housing Market Essay

- The housing market is very unique as unlike other goods and services, houses have permanence, it is a fixed location good causing the rules of supply and demand to be taken to new extremes. In the case of the Toronto housing market we can view in almost real time the role supply and demand play on he ever increasing house prices, additionally the fundamental economic issue of scarcity is made extremely apparent by the limited size of the city of Toronto. In the early chapters of Cocktail Party Economics, the foundational economic concept of scarcity is brought up as a handful of statements: “a good man is hard to find” or “there’s not enough time in the day” (Pg....   [tags: Supply and demand, Economics]

Research Papers
709 words (2 pages)

Affordable Housing Crisis Essay examples

- Affordable housing in the United States describes sheltering units with well-adjusted housing costs for those living on an average, median income. The phrase usually implies to applied rental or purchaser housing within the financial means of lower-income ranges specific to the demographics of any given area. However, affordable housing does not include those living in social housing owned by government and non-profit organizations. More specifically, the targeted range for housing affordability sets below 30 percent of a household's annual income, including all applicable taxes, utility costs and home owners insurance rates....   [tags: Income, Housing]

Research Papers
1080 words (3.1 pages)

Chicago’s Public Housing Essay example

- 1. The big picture: What are the broad, general dimensions of this problem or story, here in Chicago as of 2010. As of 2010, “the ghetto” has been defined as the poor areas with dense African American populations. Nowadays the word ghetto not only describes a place, but is also used as an adjective to describe an area, or type of people in general. Chicago’s ghetto is typically referring to the south side of the city. The Chicago Housing Authority which was founded in 1937 was responsible for the majority of housing available for the city’s African American population, which was quite a controversial topic....   [tags: Public Housing]

Research Papers
1104 words (3.2 pages)

In equilibrium, the real price of housing investment (or stock) and that of residential land are determined. In household optimization problems, housing stock and residential land are considered assets, and the asset market approach, and especially the consumption capital asset pricing model, is applied to the housing market.’ (Tsunao Okumura 1996). In contrast to Sydney, as the Peter Alson (August 2005) addressed ‘we develop and estimate a long-run equilibrium model that shows the real long-run economic determinants of house prices and a short-run asymmetric error correction model to represent house price changes in the short run.’ Peter Alson (August 2005). As peter showed the paper indicate that, in the long run, real house prices are determined sharply and positively by real income and the CPI. However, the paper also find the real house price is determined significantly and negatively by the real mortgage rates, unemployment rate, equity prices and the housing stock. And in additional short-run asymmetric error correction model helps us to find that there are significant lags in adjustment to equilibrium. ‘When real house prices are rising at more than 2 per cent per annum, the housing market adjusts to equilibrium in approximately four quarters. When real house prices are static or falling, the adjustment process takes six quarters’ (peter Alson 2005). The analysis above is showed the characteristic determinants of housing price in both cities in last decade from different demand and supply aspect.

Housing boom and public policy:



From the Table (Appendix and OECD) above showed the fluctuation of real house price in recently few decades. The Australia real house price has experienced significant increased or boom in this post war to present. First, there has been a substantial long-run increase in observed real house prices. ‘Real house prices rose by approximately 180 per cent between 1970 and 2003, equal to a compound rate of approximately 3.3 per cent per annum.’ As the quality of the house remain the same. The real house prices rose by approximately 2.3 per cent per annum and approximately doubled between 1970 and 2003. The year 2003 was almost certainly a peak house price year, during this 33-year period, there were four significant house price booms: ‘from 1971 to 1974, from 1979 to 1981, from 1987 to 1989 and from 1996 to 2003 (the most prolonged price boom).’ (Peter Alson pp97 2005) After each of the first three booms, real house prices tended to be constant or fall for a few years. These are the major events that aftermath of the housing boom. The Australian housing boom in post war period is mainly drive by the government heavily investment to overcome the housing shortage. That’s according to Tony (1998) who states the Australia experienced a self-help housing boom after World War Two and Government policy played an important part in overcoming a serious housing shortage. ‘It argues that the basic factor motivating amateur builders was the absolute scarcity of accommodation rather than its high cost. There were significant regional variations in the extent of self-help activity. These are best explained by the extent of public housing provision. Where state governments invested heavily in public housing the re was less self-help activity.’(TONY DINGLE 1998)

In the second table we found Japanese housing price was fluctuate in the last few decades and the especially in 1971-1973 and from 1982-1983 and also 1988-1991 the price was climb up to the peak at different time period however the housing price is decline in recent few decades but the price of the real estate is still relative high compare with other countries. ‘An Economist survey recently showed that Tokyo and Osaka's residential property prices are the second most expensive of all western cities: an average 2-bedroom city apartment in 2002 cost over US$800,000. More important, these real estate prices are high relative to Japanese average disposable incomes: housing wealth as a proportion of annual disposable income in 1998 was 381 percent in Japan, the highest of all developed countries. The second highest, in Australia, was 355 percent(Olivia S. Mitchell a, John Piggott b 2004). The Japanese housing boom from 1986-1991 is mainly because the well-know Japanese asset price bubble. ‘The decades following World War II, Japan implemented stringent tariffs and policies to encourage the people to save their income. With more money in banks, loans and credit became easier to obtain, and with Japan running large trade surpluses, the yen was able to appreciate against foreign currencies. This allowed Japanese companies to invest in capital resources much more easily than their competitors making goods cheaper and widening the trade surplus further. And, with the yen appreciating, financial assets became very lucrative.’(Economy wikipedia) at that time period Japanese house price was reach the peak of history. When the Japanese economic indicators have reached an unprecedented high level, but due to asset price inflation can not get the support of Industry, the so-called bubble economy started to decline. The aftermath is leads the longest recession has experienced more than twenty years until now, and it makes the bank set near zero interest rate, high saving rate which people save the money in the bank rather than invest or purchase property. We can find both cities have experienced the fell or declining after the housing boom.

Public policy as economy growth stabilizer is played important role to influence the housing price. This is conducted by government, financial institution and mortgage groups would always highly link with these changes. To achieve the goal, most commonly Reserve bank or Main bank would change the different interest rate to control the economy. For an instance: Japan had adopted near zero interest rate after the economic bubble until recently to rebuild the economy. However by contrast Japan, Australian Reserve bank had increased the interest rate three times in a year to slow down the overheat housing market. Moreover, Government intervention is always involved in housing market. For an instance, Japanese housing price decrease since 1992 because Japanese’s government charge the land tax on the housing market. And by contrast to Australian in post war period to overcoming the housing shortage, government invested heavily in the housing industry. Another classic example is Reverse mortgage market in Japan, As the aging population stands high proportion in the entire population in Japan, to encourage consumption and to release the presser of the welfare for aging people, Japanese government implement an reverse mortgage policy to overcome the problem. As the stated by Olivia S. Mitchell a, John Piggott b (2004) ‘Reverse mortgages allow the elderly to borrow money against the value of their owned homes, so as to enhance their current consumption. No repayments of interest or principal must be made until the homeowner dies or vacates his home, at which point the residence must be sold and the proceeds used to repay the loan. The borrower is guaranteed tenure in his house until death, and he also receives additional income in his retirement. The RM loan is defined by being “non-recourse”—that is, no other asset may be accessed by the lender to reclaim his loan. The lender therefore faces the risk that he will not recover the full value of his loan for a host of reasons to be discussed below. As a consequence, the lender will set the maximum amount that borrowers can receive, and he will also design alternative methods of paying the borrower this amount, including in the form of a life annuity or a lump sum.’ Furthermore, Japan has experienced a very long recession, falling property prices, and extremely low interest rates. Each of these facts will impinge upon the likely success of RMs. The latter two circumstances in particular will reduce the amount of money that households can borrow in relation to their property's value, while the first will promote a lack of confidence generally and diminish the appeal of little-known financial products. Nevertheless, RMs, properly implemented, do offer Japan a sound mechanism by which it can increase the consumption of its elderly and in the long term even reduce its public pension liabilities and health care costs. These considerations underscore the practical importance of this study.
The remainder of this paper deals with the above issues in more detail, and where appropriate, compares the Japanese situation to those of other developed countries.
The future:
From the present circumstances, Sydney and Tokyo market are towards to different orientation. Obviously Australia’s housing price is unlike to change much within 18 month as the reserve Bank wont change the interest rate within this time period, the price of the house it will remain constantly for a awhile and the market is slow down by interest rate skyrocketed. The consumer will play more rationally to invest the money into the housing market as the asset bubble become bigger. By contrast to Japan, the housing market tend to be more stable, which the market is under the recessions and the housing market is try to recover in the next few years. But the housing price is still relative high compare to the other developed countries.
Return to 123HelpMe.com