11 ms·

Japanese also don't consider housing to be equity or investment, it depreciates in value every year. A house is just a house not something to speculate on or st

Japanese also don't consider housing to be equity or investment, it depreciates in value every year. A house is just a house not something to speculate on or store money in. https://www.reuters.com/article/us-japan-economy-land/japan-average-land-prices-rise-for-1st-time-in-27-years-government-survey-idUSKCN1LY10J https://www.reuters.com/article/us-japan-economy-land/japan-...

itsaidpens 7y ago
This very nearly almost made me aroused. What a wonderful idea.
- Waterluvian 7y ago
  I ranted about this concept recently when I went to buy my family a house. I can't believe it exists somewhere.
dev_dull 7y ago
Even before you mix in build-friendly government policies, Japan has had decades long population decline and extremely difficult immigration process. This is literally the opposite of the major US cities which have seen the most housing inflation. Nothing is built and everybody is moving in.
- Barrin92 7y ago
  as the article points out, there is significant net migration to Tokyo both from the country itself and from abroad, which makes the situation indeed comparable. I seriously wonder if people here even bother to at least skim the article. In fact Tokyo has grown significantly faster than New York or Los Angeles over the last fifteen years. (population up by about 1.2 million compared to 500k respectively).
zizee 7y ago
I believe this is partly a cultural artifact of Japan being earthquake prone. The severity and frequency of earthquakes used to make it difficult to build housing that would last.
- 0xB31B1B 7y ago
  Do you have any evidence to back this up? My sources say that this is a long held artifact of the shinto belief system and culture. This is a clumsy way to state this but they essentially that houses accumulate spirits over time and become “haunted”. Old dwellings are valued less because they are “dirtied” or “burdened” with an accumulated cruft of spiritual... somethingness. Haunting here isn’t a literal translation but it’s the best I can do in a short time. It’s kind of how Marie Kondos whole schitck is about treating your things as if they have “personness” or “the quality and dignity of being actively present and deserving of respect”.
  - uncletaco 7y ago
    Can you show your sources? And is it possible that you both can be right?
  - manfredo 7y ago
    I don't have a source off hand, but I've heard that the average lifespan of a Japanese house is 30-40 years. Sure, there are some historic houses and estates that have lasted for much longer than that, sometimes even centuries. They're built with the intent that a couple will raise a family in them and so there's not much reason for houses to last longer than that. Energy costs are also some of the highest in the world so getting the latest insulation technology and other efficiencies is important.
  - deleted 7y ago
    [deleted]
  - mikekchar 7y ago
    I'm sure some people believe this (although this is the first time I've heard of it). However, Japan is really a secular society. People observe religious rituals, but I literally don't know a single person that actually follows the Shinto religion strictly (and my wife's father and brother were Shinto priests!!!) Most people build a new house because that's the dream: to live in exactly the house you want to live in. If you buy an old house, then you are putting up with somebody else's choices. That and the fact that until recently houses weren't built to last. You seriously don't want to live in a house built in the 1950's. It wouldn't even take an earthquake for it to fall down around you and kill you ;-) Housing standards have improved dramatically over time and the difference between at 10 year old house and a new house was historically stark (well, at least since WWII). These days it's starting to even out and I see the used house market starting to pick up a bit (personally, I even prefer the houses built 10 years ago to the ones they build now -- It seems nobody wants windows in their new houses any more...)
Tuna-Fish 7y ago
The way this is achieved is by making sure that there is never a housing shortage, by building enough to keep the prices low. It's never an investment because prices never appreciate, so no-one would even try to invest in it.
- sanxiyn 7y ago
  You can still do this even if you already made a mistake. Remember Japan had an extreme real estate bubble in 1980s.
  - coliveira 7y ago
    This is probably the reason: they don't want to repeat the same mistake. Unfortunately the US doesn't seem to learn from its mistakes.
- throw0101a 7y ago
  Sure, the "house" depreciates, but what about the land / dirt? This is what I always find interesting in real estate, especially in the pricey areas: we use the mental shortcut of saying "I bought an expensive house". No, you didn't, you bought expensive land. If you "bought a house" for $3M, the structure itself would probably take <$500K to rebuild if it's <3000 sq. ft. (300 m^2): the rest of the money went to dirt ownership.
  - BurningFrog 7y ago
    If it's legal to build something new on the lot this kind of thinking is valid. So, somewhat caricatured, this is true in Japan, and untrue in California.
  - sarbaz 7y ago
    But this doesn't really apply to apartments, which are probably much more common in Tokyo
geebee 7y ago
Has this always been the case? I remember hearing way back in the 80s various (and probably hyperbolic) stories about how the dollar value of the land in greater Tokyo was greater than the dollar value of the all the land in the entire United States, how if you dropped a $10,000 bill in Tokyo it would be worth less than the land it covered, that sort of thing. It's possible for land to be valuable and worth owning while buildings are not viewed as investments. I'm not convinced that SF owners of single family properties would necessarily be financially harmed by a major relaxation of density restrictions. It's entirely possible that the value of living space per square foot could go down while the value of land per sq foot goes up.
- harisenbon 7y ago
  You are 100% correct. Land is valuable, houses & buildings are not. The small house on my land has decreased to the point where I pay less than $100 a year in taxes on it. The land that it's on has increased by around 30x in the last 50 years.
  - hackerbabz 7y ago
    What drives the value of the land if you are not able to build a valuable structure on it?
    - brownbat 7y ago
      Location. It's valuable to be next to useful places. This value of proximity could be increasing so rapidly that it would wash out the value of any particular residential building you could put there.
      - ShorsHammer 7y ago
        A piece of land in a great location that you can't build a house/apartment or carpark on is still worthless for all intents and purposes. The only reason someone would buy it is to speculate that one day you can build something there. Zoning dictates prices, it's a struggle to get people to understand that sometimes.
mc32 7y ago
Not sure how much impact leasehold vs freehold has on appreciation/depreciation but I think many appt buildings in Japan are build on leaseholds.
avodonosov 7y ago
Here on HN was an article about Japanese economy growth (nominal) several decades ago, because companies were investing in real estate, which was constantly increasing in cost. In short, search for "Japanese housing bubble".
throw0101a 7y ago
You're not wrong, but why is this the case? One hypothesis I heard was that building codes changed quite regularly, especially with regards to earthquakes, and therefore people often wanted the latest designs. So when they built houses, they didn't spend as much effort because they knew after a few decades they'd be completely torn down: > This scrap-and-build approach is a quirk of the Japanese housing market that can be explained variously by low-quality construction to quickly meet demand after the second world war, repeated building code revisions to improve earthquake resilience and a cycle of poor maintenance due to the lack of any incentive to make homes marketable for resale. * https://www.theguardian.com/cities/2017/nov/16/japan-reusable-housing-revolution https://www.theguardian.com/cities/2017/nov/16/japan-reusabl... * https://www.rethinktokyo.com/2018/06/06/depreciate-limited-life-span-japanese-home/1527843245 https://www.rethinktokyo.com/2018/06/06/depreciate-limited-l... In North America, I believe we also do some mental gymnastics: we say that houses are expensive, but what's actually pricey is the dirt. It's just that we tend not to completely demolish structures: to the point that even if someone completely guts a house, replacing (e.g.) >75% of materials, we psychologically still call it an "old house" even though most of the structure except the frame is new (see Ship of Theseus).
- acchow 7y ago
  > especially with regards to earthquakes, and therefore people often wanted the latest designs. So when they built houses, they didn't spend as much effort because they knew after a few decades they'd be completely torn down That only explains the structure itself. But an empty, small lot of land (only big enough for one home) with no structure at all (or an abandoned, worthless structure) can be worth well over $1M in america.
  - Aeolun 7y ago
    It can be in Tokyo too. I have one right next door in fact. 2.2M for like 320 sqm. Following Japanese standards that fits 4 homes though :)
- WWLink 7y ago
  To be fair, tract houses are usually built poorly and don't age well. The 1960s tract house I currently rent is hot garbage and it would be better/safer to tear it down and rebuild, than it would to fix it up.
kimmeld 7y ago
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...
ddebernardy 7y ago
That claim seems dubious. I'd suggest it is rather because Japan is still licking its wounds in the aftermath of the late 1980s real estate bubble. https://en.wikipedia.org/wiki/Japanese_asset_price_bubble https://en.wikipedia.org/wiki/Japanese_asset_price_bubble https://japanpropertycentral.com/2018/08/japan-property-price-index-for-april-2018/ https://japanpropertycentral.com/2018/08/japan-property-pric...
- BurningFrog 7y ago
  If it's been 30+ years, it's probably time to stop thinking of it as a temporary thing.
  - ddebernardy 7y ago
    France's Glorious Thirty lasted nearly 30 years. They turned out to be a temporary thing.
    - BurningFrog 7y ago
      Nothing is forever, sure. The sun will swallow the Earth in ~5 billion years. I guess we can all do better this fine Sunday than quibble over the true meaning of "temporary".
fulafel 7y ago
I suppose the Japan speciality is that this happens even in big cities? Generally this nature of housing is taken for granted in places all over the world. Most townas and cities are not fast-growing.

itsaidpens 7y ago

This very nearly almost made me aroused. What a wonderful idea.

Waterluvian 7y ago
I ranted about this concept recently when I went to buy my family a house. I can't believe it exists somewhere.

dev_dull 7y ago

Even before you mix in build-friendly government policies, Japan has had decades long population decline and extremely difficult immigration process. This is literally the opposite of the major US cities which have seen the most housing inflation. Nothing is built and everybody is moving in.

Barrin92 7y ago
as the article points out, there is significant net migration to Tokyo both from the country itself and from abroad, which makes the situation indeed comparable. I seriously wonder if people here even bother to at least skim the article. In fact Tokyo has grown significantly faster than New York or Los Angeles over the last fifteen years. (population up by about 1.2 million compared to 500k respectively).

zizee 7y ago

I believe this is partly a cultural artifact of Japan being earthquake prone. The severity and frequency of earthquakes used to make it difficult to build housing that would last.

0xB31B1B 7y ago
Do you have any evidence to back this up? My sources say that this is a long held artifact of the shinto belief system and culture. This is a clumsy way to state this but they essentially that houses accumulate spirits over time and become “haunted”. Old dwellings are valued less because they are “dirtied” or “burdened” with an accumulated cruft of spiritual... somethingness. Haunting here isn’t a literal translation but it’s the best I can do in a short time. It’s kind of how Marie Kondos whole schitck is about treating your things as if they have “personness” or “the quality and dignity of being actively present and deserving of respect”.
- uncletaco 7y ago
  Can you show your sources? And is it possible that you both can be right?
- manfredo 7y ago
  I don't have a source off hand, but I've heard that the average lifespan of a Japanese house is 30-40 years. Sure, there are some historic houses and estates that have lasted for much longer than that, sometimes even centuries. They're built with the intent that a couple will raise a family in them and so there's not much reason for houses to last longer than that. Energy costs are also some of the highest in the world so getting the latest insulation technology and other efficiencies is important.
- deleted 7y ago
  [deleted]
- mikekchar 7y ago
  I'm sure some people believe this (although this is the first time I've heard of it). However, Japan is really a secular society. People observe religious rituals, but I literally don't know a single person that actually follows the Shinto religion strictly (and my wife's father and brother were Shinto priests!!!) Most people build a new house because that's the dream: to live in exactly the house you want to live in. If you buy an old house, then you are putting up with somebody else's choices. That and the fact that until recently houses weren't built to last. You seriously don't want to live in a house built in the 1950's. It wouldn't even take an earthquake for it to fall down around you and kill you ;-) Housing standards have improved dramatically over time and the difference between at 10 year old house and a new house was historically stark (well, at least since WWII). These days it's starting to even out and I see the used house market starting to pick up a bit (personally, I even prefer the houses built 10 years ago to the ones they build now -- It seems nobody wants windows in their new houses any more...)

Tuna-Fish 7y ago

The way this is achieved is by making sure that there is never a housing shortage, by building enough to keep the prices low. It's never an investment because prices never appreciate, so no-one would even try to invest in it.

sanxiyn 7y ago
You can still do this even if you already made a mistake. Remember Japan had an extreme real estate bubble in 1980s.
- coliveira 7y ago
  This is probably the reason: they don't want to repeat the same mistake. Unfortunately the US doesn't seem to learn from its mistakes.
throw0101a 7y ago
Sure, the "house" depreciates, but what about the land / dirt? This is what I always find interesting in real estate, especially in the pricey areas: we use the mental shortcut of saying "I bought an expensive house". No, you didn't, you bought expensive land. If you "bought a house" for $3M, the structure itself would probably take <$500K to rebuild if it's <3000 sq. ft. (300 m^2): the rest of the money went to dirt ownership.
- BurningFrog 7y ago
  If it's legal to build something new on the lot this kind of thinking is valid. So, somewhat caricatured, this is true in Japan, and untrue in California.
- sarbaz 7y ago
  But this doesn't really apply to apartments, which are probably much more common in Tokyo

geebee 7y ago

Has this always been the case? I remember hearing way back in the 80s various (and probably hyperbolic) stories about how the dollar value of the land in greater Tokyo was greater than the dollar value of the all the land in the entire United States, how if you dropped a $10,000 bill in Tokyo it would be worth less than the land it covered, that sort of thing. It's possible for land to be valuable and worth owning while buildings are not viewed as investments. I'm not convinced that SF owners of single family properties would necessarily be financially harmed by a major relaxation of density restrictions. It's entirely possible that the value of living space per square foot could go down while the value of land per sq foot goes up.

harisenbon 7y ago
You are 100% correct. Land is valuable, houses & buildings are not. The small house on my land has decreased to the point where I pay less than $100 a year in taxes on it. The land that it's on has increased by around 30x in the last 50 years.
- hackerbabz 7y ago
  What drives the value of the land if you are not able to build a valuable structure on it?
  - brownbat 7y ago
    Location. It's valuable to be next to useful places. This value of proximity could be increasing so rapidly that it would wash out the value of any particular residential building you could put there.
    - ShorsHammer 7y ago
      A piece of land in a great location that you can't build a house/apartment or carpark on is still worthless for all intents and purposes. The only reason someone would buy it is to speculate that one day you can build something there. Zoning dictates prices, it's a struggle to get people to understand that sometimes.

mc32 7y ago

Not sure how much impact leasehold vs freehold has on appreciation/depreciation but I think many appt buildings in Japan are build on leaseholds.

avodonosov 7y ago

Here on HN was an article about Japanese economy growth (nominal) several decades ago, because companies were investing in real estate, which was constantly increasing in cost. In short, search for "Japanese housing bubble".

throw0101a 7y ago

You're not wrong, but why is this the case? One hypothesis I heard was that building codes changed quite regularly, especially with regards to earthquakes, and therefore people often wanted the latest designs. So when they built houses, they didn't spend as much effort because they knew after a few decades they'd be completely torn down: > This scrap-and-build approach is a quirk of the Japanese housing market that can be explained variously by low-quality construction to quickly meet demand after the second world war, repeated building code revisions to improve earthquake resilience and a cycle of poor maintenance due to the lack of any incentive to make homes marketable for resale. * https://www.theguardian.com/cities/2017/nov/16/japan-reusable-housing-revolution https://www.theguardian.com/cities/2017/nov/16/japan-reusabl... * https://www.rethinktokyo.com/2018/06/06/depreciate-limited-life-span-japanese-home/1527843245 https://www.rethinktokyo.com/2018/06/06/depreciate-limited-l... In North America, I believe we also do some mental gymnastics: we say that houses are expensive, but what's actually pricey is the dirt. It's just that we tend not to completely demolish structures: to the point that even if someone completely guts a house, replacing (e.g.) >75% of materials, we psychologically still call it an "old house" even though most of the structure except the frame is new (see Ship of Theseus).

acchow 7y ago
> especially with regards to earthquakes, and therefore people often wanted the latest designs. So when they built houses, they didn't spend as much effort because they knew after a few decades they'd be completely torn down That only explains the structure itself. But an empty, small lot of land (only big enough for one home) with no structure at all (or an abandoned, worthless structure) can be worth well over $1M in america.
- Aeolun 7y ago
  It can be in Tokyo too. I have one right next door in fact. 2.2M for like 320 sqm. Following Japanese standards that fits 4 homes though :)
WWLink 7y ago
To be fair, tract houses are usually built poorly and don't age well. The 1960s tract house I currently rent is hot garbage and it would be better/safer to tear it down and rebuild, than it would to fix it up.

kimmeld 7y ago

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...

ddebernardy 7y ago

That claim seems dubious. I'd suggest it is rather because Japan is still licking its wounds in the aftermath of the late 1980s real estate bubble. https://en.wikipedia.org/wiki/Japanese_asset_price_bubble https://en.wikipedia.org/wiki/Japanese_asset_price_bubble https://japanpropertycentral.com/2018/08/japan-property-price-index-for-april-2018/ https://japanpropertycentral.com/2018/08/japan-property-pric...

BurningFrog 7y ago
If it's been 30+ years, it's probably time to stop thinking of it as a temporary thing.
- ddebernardy 7y ago
  France's Glorious Thirty lasted nearly 30 years. They turned out to be a temporary thing.
  - BurningFrog 7y ago
    Nothing is forever, sure. The sun will swallow the Earth in ~5 billion years. I guess we can all do better this fine Sunday than quibble over the true meaning of "temporary".

fulafel 7y ago

I suppose the Japan speciality is that this happens even in big cities? Generally this nature of housing is taken for granted in places all over the world. Most townas and cities are not fast-growing.