Odakyu-sen

Good morning Dr. Bubb, The Kanto is the largest plain on the island of Honshu, and has Tokyo as its main city. If you head west, past Mt. Fuji, on past Nagoya and the further mountain ranges, you come to another plain, the Kansai plain, whose main city is Osaka. If Tokyo can be likened to London, then Osaka is a bit like Manchester. (The mentality between the Kansai-Kanto love-hate relationship can be similar--the Osakans consider the Tokyoites to be up themselves; the people from Tokyo think folks in Osaka to be a bunch of greasy, money-grubbing commoners.) It's the usual friendly two-major-city rivalry one sees everywhere. Both cities are the center of a vast network of public and private railways that bring people in from the surrounding regions. The system works provided that three conditions exist. 1) The commuter lives within a 1.5-km walking or cycling radius from the station. 2) The commuting time to the terminal is not much more than 1 hour (30-50 km). 3) The cost of a round-trip on a commuter pass costs no more than half and hour of labour. For example, if you earn 2,000 yen/hour, the cost of a daily commute should be 1,000 yen or less. As a result, the average worker lives in high-rise buildings that ring the railway stations. Out in the countryside and in smaller regional cities with populations of less than a million, ordinary workers tend to live in detached houses and drive or take the bus to work. When the "Baburu" burst at the end of the eighties, it was a nasty shock for people who sincerely believed that the divine asset (land) could never fall in value. I recall plots of land for detached residential houses selling for 17.5 million yen at the early days of the rise (about 1985) and thereafter rising to 40 million a couple of years later. This was when the exchange rate was about 250 yen to the pound. (And this was in my suburb of Fujisawa, some 50 km southwest of Tokyo, about 1.5 km from the station and a further 55 minutes into Tokyo (Shinjuku terminal) on the Odakyu railway line. The 2-generation inheritable mortgage appeared on the market (for your grandchildren to pay off). People would pay 50 million yen in the early 90s for a 65-square meter apartment in a high-rise within walking distance of a station a hour away (50 km) from Tokyo. These same apartments have since fallen to about 30 million yen over the last 12 years. Can we say negative equity, anyone? I lived through the Japanese economic bubble. I don't believe in mass hysteria, but I have experienced the mass-delusion that accompanies a real estate bubble. I believe you are going through it (or the beginning of the end of it) now. It's like a party that just keeps on going. And when it is over, people look at each other in amazement and ask each other "How could we have been so stupid?" The thought that anyone in their right mind could have paid so much for a shoebox (or "rabbit hutch" as they are known in Japan) will seem so bizarre in a few years. Later this decade, the average person will look back at 2005 prices and shake his head in utter disbelief--yet now, to most, it seems to be the natural state of things. Save this text, and then read it again in August 2009 and see how the attitude of the general populace has changed. "We must have been crazy! I can see it all now!" The only problem is that at the time, you can't. (Although some of us have had a peak behind the curtain....)

I meant 1930's-style, i.e., resembling the 1930s (the good bits). I said this was an optimistic view.

This is a utopian/optimistic vision. It would be after the Boomers have died off, after say, 1955 + 80 years = 2035 or thereabouts. I have not considered the international aspect; only the domestic. It will be less materialistic society--but not because of political ideology, but more due to natural circumstances and the invisible hand of the free market. There is a danger that certain groups could seek power by the choking off of life-supporting resources. Either citizens' groups or the government will have to act to prevent this from happening. Being less consumption-oriented doesn't mean we have to be less consumer-oriented. There will still be opportunities for the creation of new products, services, businesses and industries that meet consumer needs and create wealth while using resources more efficiently. The emphasis can be on investment rather than speculation; skill acquisition rather than instant gratification; and the dismantling of the welfare nanny state. - Gee, I'm ranting well this morning- Somebody stop me!

I don't think that high oil prices/post-crash will result in Big Brother or Mad max scenarios. This is my 2-yen's worth of a vision of the future. The falling birthrate will mean less pressure on infrastructure. Once the "pig-in-the-python" demographic bulge of Baby Boomers passes through the population, the drain on public finances into pensions will decline. Houses will remain abundant, and their prices will remain nominally static. In a 100-square meter dwelling, there will be ample space for 2-3 children (in bunks). With more walking and cycling, plus a more frugal, healthier diet, the national health may actually improve. The role of the railways and canals for bulk transportation will increase. Air cargo (except for high-value products) will decline. Physical distribution will slow down (UPS, couriered stuff). We will still have the Internet for the distribution of ideas and information. As the U.K. will have to become more self-reliant in terms of food production and distribution, there will be a rising sentiment of "service to the community, King and country" and the "national good" (A little like in Japan at present). By this I mean farmers and other food produces will have to consider the needs of the nation as well as their own economic benefits. City dwellers may not own the means of food production, but the farmers will not have the right to ignore the nutritional needs of the urban population. This can be a constructive, unselfish sentiment--but the spectre of chauvanistic nationalism may reappear. The U.K. will become more like the Kanto-Kansai districts on the Pacific coast of Honshu, Japan. There will be high-density housing within cycling distance of railway stations (and large multi-storied bicycle parks adjacent to the stations). Fuel will be 3-4 times its current price. Most urban dwellers will not have cars, but there will be a thriving car rental service for holidaying. SUVs and far-away holiday houses will be harder to maintain (except for retirees who with to live in them full-time). In some ways, we may return to a 1930s-style of life, with an emphasis on single-income-earner households, no car, mum (or dad) at home sewing and repairing the home. We will make things last longer and we will make do with stuff. Children will walk to school. We will ride our bicycles to the local shops each day for unprocessed foods that we will take home and cook for our families. We will know all the people in our neighborhood. There will be plenty of work for the unemployed youth in the fields tilling the soil and learning useful skills if they choose not to study. I am optimistic. By being forced to be less wastefull and greedy, we may once again discover the simple things in life like community service, slower lifestyles, the importance of learning useful skills, and advanced research into workable alternative energy sources. -Rant mode off- Comments?

I look forward to seeing September's version of this graph.

Judging by the site's Price/Earnings ration graph, the band from 1994 to 1998 was optimal for getting value for money in a house purchase. Perhaps the point at which mortgage arrears figures drop about 20% off their peak marks the time to begin house hunting? Just my 2 yen's worth.

Perhaps we have a 2-layered scenario. Layer 1) Bubble pops, market slides until its nadir in 2010, say. Layer 2) Boomers start to retire and sell off assets from, say, 2015 onwards (those born in 1950 turn 65 in 2015). The boomer assets coming onto the market must increase the supply of housing. Plus, the X and Z generation will be fewer in number, so demand will be lower. Methinks we could indeed be in for a Nihon-rashii (Japanesey) slide in house prices. My 2-yen's worth. Rebuttle, anyone?

BP, For those of us living overseas, please post a report of how the Radio Five show went for us to read. Sky-high house prices FORCE both husband and wife to work to pay off the mortgage, hence fewer children and empty houses during the day. Not good for society. Three times average annual gross salary for a 3-bedroom dwelling should be the goal. (Just my 2 yen's worth.)

School rolls also declining in Japan. Too expensive to have kids there, too. On the other hand, once the price of a typical 3-bedroom detatched house (120 sq. meters of floor area) approx. 1-hour commuting time from Tokyo falls below 25 million yen, (still 50-70 million yen 50-60 km out from Tokyo) then couples might be able to afford to have 3-4 children. Japanese culture is very pro-child, so a rebound in birthrate is possible if the environment improves. Such an inflexion is probably 20 years off, after the boomers die off and land prices drop by a further 50%, but Japan could become primed for a population boomlet. The Japanese government knows that mass immigration is not an option. A large influx of people not wishing to integrate into Japanese society would rip the fragile social fabric to shreds. (I feel a generalization coming on.....) (Pardon me.) "Cultural identity and heritage is still valued in Japan." (There, that feels better...)

I think that if prices continue to fall in Japan, I might consider buying a coastal property on the Izu Peninsula (or maybe lease one of the many "summer homes" that are unoccupied around Atagawa or Shimoda). Prices may even fall to sensible levels in a couple of years' time. Still, I had better wait until the kids leave home before moving back to Japan.

Children are part of the answer to the question of the meaning of life. (There are 41 other parts, but I am not sure what all of them are.....)