4 ms·

Currently in Japan, interest rates for home loan are so close to zero. About 1% for fixed rate, 0.5% for 10 year fixed rate, less than 0.4% for variable rate.

by ezoe 5y ago

Currently in Japan, interest rates for home loan are so close to zero. About 1% for fixed rate, 0.5% for 10 year fixed rate, less than 0.4% for variable rate. New homes are built rapidly and supply is plentiful. When we say home, it almost always mean condominium. Yet, the house price is rising in Japan. I can think of a few reasons for that, like mere fact that home loans are available to virtually anyone who is employed and recieve average wage, old homes quickly lose value in Japan or people ditched the countrysides and concentrate to a few major cities. I think home loan interest rate just reflect the inflation rate of the currency in that country. House price goes up simply because anyone can loan a money for. So long as the credit is available, house price stays the maximum amount of money average people can loan for and it's increasing. If rate goes up, it just mean the inflation rate goes up. The house price goes down when 1. No demand. People don't want to live that place anymore. 2. Loan is not available. 3. The government turns into Communism and give all citizen a same house for free.

yurishimo 5y ago
Japan is really cool in regards to housing. You have a sort of dichotomy of either really old houses, or brand new. I forget which YouTube video I watched that explained that it's rare to find a house older than a decade or two in a Japanese city because people don't want to live in them. Houses are constantly torn down and replaced with new ones with the latest and greatest features. I think something like that could work to reduce housing costs in the USA, but it would likely require a brand new city to be the guinea pig to prove the concept here. Something like those self-contained retirement towns that spring up, but maybe when the residents die, they rebuild them? Macabre, but interesting!
- ezoe 5y ago
  You can't just import the foreign culture without the environment that justify the culture. In Japan, the land is scarce and fragile, humidity weather, constantly facing earth quakes, typhoons. So the house will be damaged faster than the typical western countries. Each time we face the massive earthquakes, the house building regulation will be updated to mandate new and improved earthquake resistant structure so building built with old regulation lose market values. The same goes for all disasters like tsunami, flooding, land slide and all. You must also consider the fact that air conditioning wasn't popular 30 years ago. The houses built before that era were optimized for the natural ventilation. it's totally inefficient for the air conditioner. Old houses also has the Internet issues. Most of the house in Japan are massive condominium. The optical fiber was a thing after 2000s. It takes a lot of money to wire optical cable inside the existing building. So most of the buildings in Tokyo are still using VDSL. Other infrastructures like power line, water and gas starting to rust so it must be replaced. The cost of doing that to existing house is expensive in Japan and it doesn't increase the value of house that much. Especially for old houses that need replacing because it had gotten so much damage from humidity, earthquakes, typhoons and remember, it was built before the current housing regulation for the resistance for these. So it's more reasonable to just scrap it and rebuild it. I am living in a standalone old house in Tokyo unlike most of the people. Then, I realized the value of condominium in Tokyo. It works as a gated community, the segregation based on income. We are implicitly achieving the segregation by the condominium.
fomine3 5y ago
Add: interest rates for home loan is virtually minus for 10 years, thanks to gov's tax reduction for 1% of loan debt.

by ezoe 5y ago

yurishimo 5y ago

Japan is really cool in regards to housing. You have a sort of dichotomy of either really old houses, or brand new. I forget which YouTube video I watched that explained that it's rare to find a house older than a decade or two in a Japanese city because people don't want to live in them. Houses are constantly torn down and replaced with new ones with the latest and greatest features. I think something like that could work to reduce housing costs in the USA, but it would likely require a brand new city to be the guinea pig to prove the concept here. Something like those self-contained retirement towns that spring up, but maybe when the residents die, they rebuild them? Macabre, but interesting!

ezoe 5y ago
You can't just import the foreign culture without the environment that justify the culture. In Japan, the land is scarce and fragile, humidity weather, constantly facing earth quakes, typhoons. So the house will be damaged faster than the typical western countries. Each time we face the massive earthquakes, the house building regulation will be updated to mandate new and improved earthquake resistant structure so building built with old regulation lose market values. The same goes for all disasters like tsunami, flooding, land slide and all. You must also consider the fact that air conditioning wasn't popular 30 years ago. The houses built before that era were optimized for the natural ventilation. it's totally inefficient for the air conditioner. Old houses also has the Internet issues. Most of the house in Japan are massive condominium. The optical fiber was a thing after 2000s. It takes a lot of money to wire optical cable inside the existing building. So most of the buildings in Tokyo are still using VDSL. Other infrastructures like power line, water and gas starting to rust so it must be replaced. The cost of doing that to existing house is expensive in Japan and it doesn't increase the value of house that much. Especially for old houses that need replacing because it had gotten so much damage from humidity, earthquakes, typhoons and remember, it was built before the current housing regulation for the resistance for these. So it's more reasonable to just scrap it and rebuild it. I am living in a standalone old house in Tokyo unlike most of the people. Then, I realized the value of condominium in Tokyo. It works as a gated community, the segregation based on income. We are implicitly achieving the segregation by the condominium.

fomine3 5y ago

Add: interest rates for home loan is virtually minus for 10 years, thanks to gov's tax reduction for 1% of loan debt.