intercst
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New construction changing supply & demand curve.
Austin’s rents have dropped 18% due to new construction.
I am surprised Austin real estate developers are building so many new apartments. An oversupply cuts revenue and profits.
Most major US cities keep new construction at levels that keep rents high.
I only skimmed the video, but I didn’t see mention of what I thought was the answer:
Falling population.
Japan has already reached the point where their population is shrinking. I believe it’s the only OECD country where that’s happening. Their population has been falling since 2008. Japan’s population is 3% smaller than it was in 2007, while the U.S.’ population is 13% larger than it was in 2007. Tokyo metro population peaked in 2018, and was falling even before the pandemic.
The country’s population is shrinking, and the population of Tokyo is shrinking. It’s not exactly surprising that in that context, housing prices might not have skyrocketed. I don’t think we need to reach to “they have easy permitting processes and good mass transit” to solve that mystery. Maybe the answer is that Tokyo’s the only “mega city” in a shrinking country (and that is itself shrinking).
[EDIT: After further review, it appears that Italy and South Korea also have declining populations. I don’t know if either Rome or Seoul is a “mega city.” Though Rome’s housing market is relatively affordable compared to what we would consider a “mega city,” Seoul’s is not.]
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Just a guess, but population density (LA is more than 2X) as well as not only the lack of available land but also the cost of available land ($6k per acre for Austin, $60k per acre for Los Angeles) are probably the leading factors.
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Not challenging you, but do you have a source for that?
However, even within the state of California, land costs can vary from region to region, city to city, and even neighborhood to neighborhood. For example, Los Angeles County has a median price of $1.38 per square foot (over $60,000 per acre).
The population in the rural countryside is falling. It’s still rising in Tokyo and the surrounding metropolitan area.
intercst
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An acre building lot in my neighborhood is $700k, and it’s far from a wealthy area.
intercst
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Is it? I had done a quick search, and the response I got was that Tokyo metro had been declining in population for almost a decade now:
Tokyo, Japan Metro Area Population (1950-2025) | MacroTrends
….but there’s lots of different measurements of what the “Tokyo metropolitan area” even means, so no guarantee that’s right. But it certainly hasn’t been seeing the kind of million+ population upswings that other major metros have.
Paris, France Metro Area Population (1950-2025) | MacroTrends
New York City Metro Area Population (1950-2025) | MacroTrends
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I was more interested in “$6k per acre for Austin.” Where?
Beats me, that is just what I read online.
Texas Land Pricing Guide 2025 | Texas Farm Credit (Prices%20fell%200.01%25%20year%2Dover%2Dyear
- Pay $7,306 per acre in Austin – Waco – Hill Country (Prices fell 0.01% year-over-year. Although it’s a minimal decrease, that’s the first time average prices per acre have dropped in this region since 2018, according to the Texas Real Estate Research Center.
So, closer to $7500 per the most recent data.
That’s for an acre of land in the middle of nowhere.
One acre lots in suburban Austin start at $300K, with desirable areas at $1MM/acre or more.
intercst
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The link doesn’t support your claim, but regardless, apartments can be built anywhere and they are certainly LESS LIKELY to be built on the most expensive lots available.
It is not uncommon for farm land in my community to be sold for $10k or less an acre that is then converted to either a planned community or apartments (or a Walmart or a Wawa - two recent farmland conversions). I see 35.4 acres for sale right now for about $17k an acre. Next community over has 65 acres going for less than $8k an acre (under contract).
Russia’s population is shrinking due to factors like a historically low birth rate, which fell to its lowest in 225 years in the first quarter of 2025, combined with high death rates from issues like alcoholism and disease, and emigration spurred by the war in Ukraine. These trends are expected to continue, causing a significant decrease in the population in the coming decades and impacting the country’s economy and future.
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Countries which are experiencing population decline include Ukraine, Bulgaria, Italy, Japan, and several Eastern European nations like Latvia, Lithuania, Poland, and Romania.
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