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Since houses don’t wear out or get used up, like clothes or food, and you can sell them when you’re done with them, they’re inherently an investment.

jlokier 5y ago
Sure, they're an investment too, but properties bought primarily to live in, with investment as a handy side effect, do not have the same effect on housing availability and affordability. Each such purchase reduces supply by 1, but also reduces demand by 1, and gives someone relative stability. So purchasing to live in is not what "property investment" refers to in this context. It has a narrower meaning than "anything you could conceivably think of as an investment". Aside, houses do in fact wear out, need regular repair, and eventually most get demolished because regular repair isn't good enough.
imtringued 5y ago
They do. It's the land that goes up in value.
- chrisseaton 5y ago
  Houses get more valuable the older they are. Most people don't want new houses.
  - jlokier 5y ago
    That's true up to a point, but many houses decay beyond profitable repair eventually. It depends how they are constructed and maintained. In some cultures, houses are not expected to last a long time. Japanese houses famously depreciate with time and lose all their value after about 20 to 30 years. In other cultures, houses that could last a long time don't get maintained if the people living in them are too poor to do so. Depending on the materials, and construction aspects like breathability, the house could still last a long time, or the materials could decay, crumble, become mouldy etc to the point that the only economical thing to do is tear the house down and rebuild. Old houses (especially mansions) that are particularly historically interesting or very old may have preservation orders on them, limiting how you are permitted repair and rebuild. Sometimes this means repair will cost so much that only a rich person could afford to do it, and the repaired result would be worth less than the cost of that repair, so the transaction value of the property drops to a nominally low value (it's really negative value), but it's only available to someone who can afford to repair it. These properties tend to be inherited, and then the new owner can't afford to look after them.

jlokier 5y ago

Sure, they're an investment too, but properties bought primarily to live in, with investment as a handy side effect, do not have the same effect on housing availability and affordability. Each such purchase reduces supply by 1, but also reduces demand by 1, and gives someone relative stability. So purchasing to live in is not what "property investment" refers to in this context. It has a narrower meaning than "anything you could conceivably think of as an investment". Aside, houses do in fact wear out, need regular repair, and eventually most get demolished because regular repair isn't good enough.

imtringued 5y ago

They do. It's the land that goes up in value.

chrisseaton 5y ago
Houses get more valuable the older they are. Most people don't want new houses.
- jlokier 5y ago
  That's true up to a point, but many houses decay beyond profitable repair eventually. It depends how they are constructed and maintained. In some cultures, houses are not expected to last a long time. Japanese houses famously depreciate with time and lose all their value after about 20 to 30 years. In other cultures, houses that could last a long time don't get maintained if the people living in them are too poor to do so. Depending on the materials, and construction aspects like breathability, the house could still last a long time, or the materials could decay, crumble, become mouldy etc to the point that the only economical thing to do is tear the house down and rebuild. Old houses (especially mansions) that are particularly historically interesting or very old may have preservation orders on them, limiting how you are permitted repair and rebuild. Sometimes this means repair will cost so much that only a rich person could afford to do it, and the repaired result would be worth less than the cost of that repair, so the transaction value of the property drops to a nominally low value (it's really negative value), but it's only available to someone who can afford to repair it. These properties tend to be inherited, and then the new owner can't afford to look after them.