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> but I don't expect greater than inflation appreciation on the house. Even expecting the house to hold its value is rather strange. You would naturally expec
by jlmorton 7y ago
> but I don't expect greater than inflation appreciation on the house.
Even expecting the house to hold its value is rather strange. You would naturally expect the value of a home to decrease by some amount each year. Most of us would prefer a modern home to an older home. The only reason it does not is because supply of new homes is restricted.
In well functioning markets like Tokyo, that's exactly what we see: homes tend to lose value each year until around 25-30 years most are simply torn down and re-built.
So in Tokyo, not only is the average rent sharply lower than a city like San Francisco, the housing is also more modern. The average age of a home in Tokyo is 20 years. More than half of Tokyo's housing stock has been built since the year 2000.
In San Francisco, more than half of the housing stock was built before 1940.
- jerf 7y ago"You would naturally expect the value of a home to decrease by some amount each year." If you deduct maintenance from your home value, it more-or-less does. I don't see why a maintained home "should" decrease in value, though. A lot of the value of a home is in the structure, which tends to wear much more gracefully than, say, a car's body.
- asdff 7y agoThere is little that maintenance can do to prevent a 100 year old foundation from 'settling' in a pretty precarious way. Or finding out one day that the water pipe is a 100 year old wooden pipe that is now rotted through. As a house gets older, maintenance ($) turns into renovation ($$) then critical overhaul ($$$), even in the houses with good bones.
- PeterisP 7y agoI'd expect the value of a properly built and maintained house to decrease very slowly (e.g. the building I live in is ~110 years old and not that much worse than when it was built), and while that's still a negative, on the other hand the value of the land would appreciate even (and especially if) there's active building of new homes, so the total value of house+land can be quite stable even if supply is not restricted. It won't skyrocket, though.
- mc32 7y agoHousing in Tokyo is also built to have a useful lifespan of 30 years, so framing it as them being “new” lacks background information.
- jelliclesfarm 7y ago10 years is the norm. They build it..raze it down and rebuild it.
- asdff 7y agoA 40 year old house in tokyo is probably half mold by weight at that point. No wonder.
- deleted 7y ago[deleted]