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In Japan existing housing stock depreciates. The net result is better than appreciation in my experience. L Right now the net result is buildings can be rebuil
by Danieru 7y ago
In Japan existing housing stock depreciates. The net result is better than appreciation in my experience. L
Right now the net result is buildings can be rebuilt when needed. All my friends can afford to buy a home. RE prices are reasonable and thus have reasonable rates of return.
The total cost of buying a new house is similar to America as the lower interest rate compensates for the depreciation. The difference is thus smaller down payments and lower monthly payments. If you want a similar net return to America then you can invest the difference in RE or equities.
Thus young people can buy homes easily while the total wealth building is not reduced. The generated wealth will be more diversified and thus less dependent on housing valuations.
- zemo 7y agoyeah I'm not sure anyone is arguing that the appreciation of housing values is a good thing, just that it's an emergent thing and it's not that surprising. Much of this paper is corroborating Piketty, whose central thesis is more or less that the rate of return on capital is too high, and that the consequence of the high rate of return on capital is increasing wealth inequality. We're in essence creating a system that says that if you want to make more money, owning stuff is better than doing stuff. That's a pretty lamewad system imho, as it encourages the growth of the rentier class as the expense of the working class.