A new global survey shows that most citizens in developed countries are facing a common challenge, feeling frustrated by the continuously rising housing costs. However, there is one affluent country that stands out as an exception – the majority of Japanese people are satisfied with their housing situation.
Residents in wealthy countries are expressing record levels of dissatisfaction with housing costs, surpassing concerns in other areas such as healthcare and education. According to data from Gallup Analytics, half of the respondents in OECD countries are unsatisfied with the affordability of housing, a proportion that has sharply increased since central banks raised interest rates to combat severe inflation.
In the United States, despite rising interest rates, housing prices are soaring. Nearly 60% of surveyed Americans stated their dissatisfaction with the affordability of housing.
However, the annual Gallup World Poll reveals that among affluent nations worldwide, Japan is the country where residents are least worried about housing costs, with over 70% of respondents expressing satisfaction with the current housing situation.
The survey, conducted from April 2023 to January 2024, interviewed over 37,000 people in 38 OECD countries, asking about satisfaction levels on 11 topics including living standards, opportunities to meet others, quality of healthcare, and the relative ease of obtaining “quality, affordable housing” in their area.
According to analysis by the Financial Times, housing is the most frustrating topic for respondents. Gallup data shows that in 38 countries, there are more individuals unsatisfied with the quality and cost of housing than those who are satisfied.
The data indicates that the age groups most dissatisfied with housing affordability are those under 30 and those between 30 and 49.
Among the 38 OECD countries, residents of Israel, Turkey, Slovenia, Portugal, Canada, and Australia rank at the bottom in terms of housing satisfaction. The United States is tied for 21st place, towards the lower end of the ranking. Among over 1,000 surveyed Americans, only 39% expressed satisfaction, a decrease from 61% in 2020 and 71% in 2013.
Only in Japan, over 70% of respondents feel satisfied with the availability of “quality, affordable housing,” placing them at the top in terms of satisfaction.
Housing prices in the United States have remained high, with Treasury Secretary Yellen telling the House Financial Services Committee on July 9 that rent and housing costs are keeping U.S. inflation rates higher than the Federal Reserve’s desired level. She also mentioned that it will take some time for housing costs to normalize.
According to Business Insider, Japan, a U.S. ally, stands out in housing affordability, with reasons including declining population and relaxed regulations, and standardized land-use policies.
Japan has consistently had lower birth rates, and its immigration policies are stricter compared to other wealthy countries, resulting in a decreasing population over decades, leading to approximately 10 million vacant homes nationwide and a decline in demand, thereby reducing housing prices and rents. Additionally, the Japanese population is concentrated in major cities.
Tokyo has been successful in housing construction. Despite the Tokyo metropolitan area housing roughly one-third of Japan’s population and still growing, efforts have been made to keep housing at relatively affordable levels, partly due to ongoing construction of numerous new residences.
Unlike many other industrialized countries, Japan’s government controls land use laws, meaning zoning regulations and rules on what types of houses can be built and where are relatively straightforward and consistent, with less opposition from communities. Since local elected officials do not control zoning, they are not influenced by NIMBYism (Not In My Backyard syndrome), a mindset that often hinders housing construction in the U.S.
These uniform national zoning laws do not deter more mixed-use communities, denser and multi-family housing, and promote a quicker, cheaper construction process. Developers are not hindered by cumbersome regulatory processes that slow down construction and increase costs.
Another reason is that most Tokyo residents do not own cars, eliminating parking issues that would drive up housing prices. In contrast, houses with parking spaces in the U.S. contribute to price hikes.
Due to Japan’s susceptibility to earthquakes, housing in Japan must adhere to stricter building codes, making new homes more attractive.
While American homes tend to appreciate over time, making them a key investment, Japanese homes may depreciate with age and become less compliant with newer, safer building codes. This factor leads Japanese homeowners not to view their homes as investment assets like Americans do, resulting in a market with low supply and high prices.
Although a slowing population growth may help lower housing costs, some experts believe that a substantial decline in the population will have significant economic consequences in the long run.