According to data released by Tokyo Kantei on July 30, the average price of a brand new apartment in Japan was 6.53 times the average annual income, while a second-hand apartment (less than 10 yrs old) was 4.56 times the average income.

While apartment prices are rising, income levels are still declining. The average annual income in 2012 fell 4.6% to 4,170,000 Yen. This is the third year in a row where incomes have fallen.

In greater Tokyo (Tokyo, Kanagawa, Saitama and Chiba Prefectures), the price-to-income ratio of second-hand apartments was 6.12, and in Tokyo City the ratio was 7.24.

The ratio was the highest in Tokyo City, with new apartments costing an average of 9.84 times the annual income and second-hand apartments costing 7.24 times the annual income. The average income in Tokyo in 2012 was 6,130,000 Yen – the highest in the country.

Price-to-income ratios by area:

NEW APARTMENTS
2012 2011
Tokyo City 9.84 9.43
Kanagawa 9.10 7.77
Saitama 8.22 7.84
Chiba 7.40 6.44
Greater Tokyo 8.74 7.91
Osaka 6.91 7.36
Kyoto 9.55 8.94
Hyogo 7.85 8.35
Nationwide 6.53 6.27
SECOND-HAND APARTMENTS
2012 2011
Tokyo City 7.24 7.35
Kanagawa 6.07 5.70
Saitama 5.39 5.39
Chiba 5.39 4.38
Greater Tokyo 6.12 5.76
Osaka 4.80 4.71
Kyoto 5.98 5.66
Hyogo 5.28 5.30
Nationwide 4.56 4.32

According to the Demographia International Housing Affordability Survey for the 3rd quarter of 2012 (link), the average price-to-income ratio in other countries is as follows:

  • Hong Kong: 13.5 
  • Australia: 5.6 (Sydney: 8.3)
  • New Zealand: 5.3 (Auckland: 6.7)
  • UK: 5.1 (London: 7.8)
  • Canada: 3.6 (Vancouver: 9.5)
  • US: 3.1

About the data:

The price to income ratio was calculated by dividing the average price of a new 70 sqm (753 sqft) apartment by the average annual income.

Click here to read about 2011’s data.

Source: Tokyo Kantei, July 30, 2013.

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