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This sounds great but you have to factor in that up to very recently, houses have been fairly poorly built in Japan as they prefer to demolish and build anew. A

This sounds great but you have to factor in that up to very recently, houses have been fairly poorly built in Japan as they prefer to demolish and build anew. Average lifespan of a house in Japan is 20-30 years. Which means that it doesn't always make sense to renovate these abandoned houses. Some reading: https://www.theguardian.com/cities/2017/nov/16/japan-reusable-housing-revolution https://www.theguardian.com/cities/2017/nov/16/japan-reusabl... https://www.economist.com/finance-and-economics/2018/03/15/why-japanese-houses-have-such-limited-lifespans https://www.economist.com/finance-and-economics/2018/03/15/w... http://freakonomics.com/podcast/why-are-japanese-homes-disposable-a-new-freakonomics-radio-podcast-3/ http://freakonomics.com/podcast/why-are-japanese-homes-dispo... https://www.theguardian.com/sustainable-business/disposable-homes-japan-environment-lifespan-sustainability https://www.theguardian.com/sustainable-business/disposable-... https://www.japantimes.co.jp/community/2014/03/31/how-tos/japans-30-year-building-shelf-life-is-not-quite-true/ https://www.japantimes.co.jp/community/2014/03/31/how-tos/ja...

masklinn 8y ago
> This sounds great but you have to factor in that up to very recently Has that changed? I assume you get the actual property, not just the house sitting on it. The land is what japan generally values.
- ska 8y ago
  Houses are depreciating assets. It's the land that has value most places.
  - TheGRS 8y ago
    Japan seems to be the exception actually, in the US houses certainly are appreciating assets, market crashes and such notwithstanding.
    - ska 8y ago
      Usually the land they are on is appreciating. The houses themselves depreciate. Sometimes the distinction doesn't matter - but here one of the things we are talking about people knocking down serviceable houses to build new ones. This approach can sometimes even be compelling if land prices rise to a degree completely out of character with the homes originally built on them. See, for example, SF bay and Vancouver.
  - ska 8y ago
    I seem to have been unclear, when I said "houses are depreciating assets" I meant the structure itself. This is almost always true. However, the land it is on may well be rising in value enough to counteract the depreciation - so your house + land may well be worth more in 10 years, even though the house itself is probably worth less. Make more sense?
    - quickthrower2 8y ago
      There are three things at play: 1. Value of land 2. Value of building in perfect order 3. Lost of value of building due to wear/tear etc. If building/trades costs are rising #2 can rise too while #3 will counteract it, and it depends how much money is put into maintenance and renovations. Notwithstanding cultural issues with old houses.
      - ska 8y ago
        See the "almost" in "almost always". You can reduce the depreciation of a depreciating asset by putting money into it, sure, but that doesn't counter the point. I agree there may be some weird inversions due to a spike in labor and/or material costs - but you wouldn't want to bet on it. The usual case is they are just losing value, and requiring injections of cash periodically.
neaden 8y ago
I believe a lot has to do with advances in Earthquake safety making it preferable to have a new house.

masklinn 8y ago

> This sounds great but you have to factor in that up to very recently Has that changed? I assume you get the actual property, not just the house sitting on it. The land is what japan generally values.

ska 8y ago
Houses are depreciating assets. It's the land that has value most places.
- TheGRS 8y ago
  Japan seems to be the exception actually, in the US houses certainly are appreciating assets, market crashes and such notwithstanding.
  - ska 8y ago
    Usually the land they are on is appreciating. The houses themselves depreciate. Sometimes the distinction doesn't matter - but here one of the things we are talking about people knocking down serviceable houses to build new ones. This approach can sometimes even be compelling if land prices rise to a degree completely out of character with the homes originally built on them. See, for example, SF bay and Vancouver.
- ska 8y ago
  I seem to have been unclear, when I said "houses are depreciating assets" I meant the structure itself. This is almost always true. However, the land it is on may well be rising in value enough to counteract the depreciation - so your house + land may well be worth more in 10 years, even though the house itself is probably worth less. Make more sense?
  - quickthrower2 8y ago
    There are three things at play: 1. Value of land 2. Value of building in perfect order 3. Lost of value of building due to wear/tear etc. If building/trades costs are rising #2 can rise too while #3 will counteract it, and it depends how much money is put into maintenance and renovations. Notwithstanding cultural issues with old houses.
    - ska 8y ago
      See the "almost" in "almost always". You can reduce the depreciation of a depreciating asset by putting money into it, sure, but that doesn't counter the point. I agree there may be some weird inversions due to a spike in labor and/or material costs - but you wouldn't want to bet on it. The usual case is they are just losing value, and requiring injections of cash periodically.

neaden 8y ago

I believe a lot has to do with advances in Earthquake safety making it preferable to have a new house.