6 ms·

> I don't think you understand how the value of these assets is supposed to rise. When you buy a flat in the center of town, it's supposed to increase it's valu

> I don't think you understand how the value of these assets is supposed to rise. When you buy a flat in the center of town, it's supposed to increase it's value for being in the center while town is expanding. Why is it "supposed" to be this way? It doesn't work this way in a lot of Asia. People don't want old, used homes and they lose value over time. Cities often don't have one specific point in the center (America's zoning is absolutely horrendous and forces this to happen) and so businesses, restaurants, shopping, activities, and so on are fairly equally spread across towns. When American cities expand, they build more houses farther away but further condense business in the downtown core. But that's a problem that's politically invented and not so much a problem elsewhere.

Izkata 5y ago
> People don't want old, used homes I don't think that's what they were describing. They were describing new homes, not old: I think the "supposed-to-be" pattern is up for 10-30 years after first being built, as the area is still growing and becoming more desirable, then down once the growth no longer outpaces the aging.
wiseowise 5y ago
> Cities often don't have one specific point in the center (America's zoning is absolutely horrendous and forces this to happen) and so businesses, restaurants, shopping, activities, and so on are fairly equally spread across towns. That is absolutely not true. There's a reason why it is called center in the first place. Amsterdam, for example is completely flooded by tourists in the center and not so much outside of it.
- trinovantes 5y ago
  They specifically said cities in Asia Look at the real estate market in Singapore or Tokyo where housing prices are more reasonable
  - lasc4r 5y ago
    I was trying to get an idea of what Japanese house prices are, but I couldn't find much beyond the cost of a new house. Which is less than in the US, but not by much more than 10-20%. I understand houses in Japan don't typically appreciate in value like they do in the US though. They like to buy new and don't see it as an investment. I assume a huge factor has to simply be that Japan's GDP and population growth has been basically flat for ~25 years.
    - kukallan 5y ago
      I don't know a lot about Japans housing market, but I've read plenty times that houses are not built to last in Japan which probably has something to do with the low housing prices. https://www.theguardian.com/cities/2017/nov/16/japan-reusable-housing-revolution https://www.theguardian.com/cities/2017/nov/16/japan-reusabl...
      - goodtempe 5y ago
        yes and this is on purpose. This is also partly because the safety standard is ever-evolving due to the precarious nature of Japan. Thus, updating house to the latest safety standard would cost more than just flat it over and rebuild a new one. That's why, the most expensive part is the land and not the building itself.
  - forgingahead 5y ago
    Singapore housing prices are in no way "reasonable". There is a large public housing component (80%), but those have also been increasing in price compared to median income, and decreasing in size. For the private market, average prices are now 15x the median yearly salary. [0] Singapore is facing the same issue every other locality is with housing prices: prices have no fundamentals any more and are just inflating upwards out of reach from the median buyer. One can compensate slightly with smaller homes, but that has an impact on fertility rates and other quality of life indicators. [0]: https://www.straitstimes.com/business/invest/property-no-longer-the-best-retirement-investment-dbs-report https://www.straitstimes.com/business/invest/property-no-lon...
jimkleiber 5y ago
I appreciated this other perpsecitve. It also helped me think about building codes and how old homes in the US can get grandfathered into old codes, not having to update to many of the new codes. But what if they did? What if our governance said old homes must be updated? Then old homes would probably be worth less because it costs a lot to retrofit sometimes. I may have some or many of those details wrong, just thought it was another example of how political decisions drive housing prices one way or the other.
- sokoloff 5y ago
  I think you’d see a lot less progress in building and energy codes if existing buildings had to comply with all the code changes.
  - bombcar 5y ago
    You also see this with houses that could duplex or quadplex in place - but it won’t happen because doing so would require bringing the entire building up to current code.
- zdragnar 5y ago
  If the updates were mandated at the time of sale: You'll find a lot of people trapped in homes they cannot sell. The cost to update very old homes would far exceed what most people can spend out of pocket, and by the time they paid off the debt to do so, the codes may have changed again. Also, older couples who have lived in one place many years and are now retired generally cannot take out lots of money. Instead of being able to sell and move to a senior community or nursing home, they would be stuck with a property they cannot maintain, compounding the problem. Essentially, you would be hurting vulnerable people at the advantage of the young and wealthy. If the updates were mandated as the code changed: See all of the above, but now you're forcing people out of their homes even faster.
  - jimkleiber 5y ago
    Oh, I wasn't saying that I believe that is a policy we should enact, I was merely saying that political decisions like that could switch a home from being an asset that increases in value over time to one that decreases in value over time. I agree there are challenges in both having homes that appreciate and homes that depreciate.
robjan 5y ago
The properties themselves lose value over time but the title or lease to the land under the property still increases in value exponentially.
po1nt 5y ago
The thing that increases in value the most is the land underneath the house. It doesn't make a lot of sense for house to increase value as it gets older. But even the house is a subject to inflation and the effect of "back in my days we could buy a toilet bowl for $20" can be seen even here. City centers exist, just look at tourism and public transport. It's more valuable when you can rent out apartment as AirBnb, it becomes more valuable when tourists can't drive, distance from museums and shopping malls increases value and possibility that the land you own could be bought out for development of high density building is what drives the value up. Housing is not a bottle of water you can buy in groceries. Housing is one of the few things most of us buy on debt. If you increase the amount of debt people can take by lowering risks for banks, the price will rise. Also there are many other factors like that cities that complain about high cost of housing mostly have draconian municipal building codes and zonings. Even racism has a play in it, it's truly interesting topic to study.
- vanilla_nut 5y ago
  I couldn’t agree more with most of your points, but I couldn’t resist nitpicking this one: > Housing is one of the few things most of us buy on debt. Hard disagree there. Most people I know buy phones, cars, bike, washing machines, computers, sofas, desks, and damn near everything else I can imagine on financing plans. I feel like a weirdo because I tend to save up for everything and not accumulate debt! But I also grew up in a very frugal household, so maybe others were raised differently.
antman 5y ago
I will second this. At some point a few decades ago I assisted on studying EU policy plans regarding sustainability. The idea was that city and town design was supposed to have "kernels" of social activity accross their boundaries e.g. shops, schools, businesess including specifically large businesses mostly on the services sector. Also in the EU country I live in schools are managed centrally and equally, so there is no such thing as a "good school district" I read happening in other countries, which seems to expand inequality and cause financial hardship to their population for no reason other than the ideological assumption that central planning is to be avoided.
- brongondwana 5y ago
  > so there is no such thing as a "good school district" Is this actually legit full true? It might be less of a gradient than other places, but in our two years in Norway our children went to two different public schools which were in immediately adjacent suburbs - both good locations, and there was a definite difference in the management of the schools which was visible through all our interactions with them. The second school was clearly better in our experience, despite being part of the same system. Norway isn't "EU" for those purposes, but I suspect it's similar. The same way that different hire car offices or different pizza parlours in the same "chain" can have quite different quality despite theoretically operating under the same policies. (edited to add) While these things, in theory, normalise out over time as staffing changes in individual schools or individual franchisees - your kids are often only at each school for a handful of years, so there'll definitely be some attempt to find the better ones based on what you hear from parents of kids a year or two ahead... and those with enough money to just move house into the "best" zone will still get their kids into the better school.
  - jhgb 5y ago
    I don't know about Norway but in the Czech Republic, there's no "school districts" in the first place, so that would be why there's no "good school district" here. Schooling simply doesn't have geographic boundaries here.
    - 5y ago
DeathArrow 5y ago
People still live in hundred years old "used" houses in Europe and they are generally more valuable than new houses. In much of Europe the core of a city is much more expensive than the periferia.
- BoxOfRain 5y ago
  Yeah here in the UK I’d be very reluctant to buy a new build. They tend to have terrible build quality relative to the price and often look very dull and “boxy” in my opinion.
  - DeathArrow 5y ago
    That too, build quality took a lot of hits. Housing might become consumer goods. In US most houses are made from wood panels and nobody expect them to out live the owner. In Europe most houses were made from bricks and concrete and people passed them to the next generation.
    - nemo44x 5y ago
      Wood framed houses survive many hundred of years. In fact they offer many advantages to bricks.
    - sjg007 5y ago
      >In US most houses are made from wood panels and nobody expect them to out live the owner. This is just nonsense. I expect my house to outlive me.. a wood framed house has a 100 year life expectancy but that will be longer with maintenance. We have older homes from the 1800s too. Plenty of people buy homes from the 1920s.
      - spacedcowboy 5y ago
        I think we’re using different definitions of “old”. My mother’s house is about 250 years old, and that’s not uncommon where she lives. Her house is literally older than this country (I live in the US these days). Her house will probably last at least that again. My house in the Bay Area is ~65 years old, it’s timber frame & stucco. When a strong wing gusts against it in a storm, you can feel the house slightly shudder. It’s not going to fall down (I’m reasonably certain, at least it hasn’t in the last 15 years and we’ve had a few storms :) and it’s not “made from wooden panels”, but in terms of solidity and construction, it’s not in the same ball-park (to use an Americanism) as my mother’s house. Oh, and my house cost today would cost about 10x what my mother’s would… [edit: it’s kind of wild that your username is what I used to sign into Unix systems with when I was in college. Sjg are my initials and they changed our account-names every semester for some reason]
eloisant 5y ago
I'm curious, which Asian countries are you talking about?

Izkata 5y ago

> People don't want old, used homes I don't think that's what they were describing. They were describing new homes, not old: I think the "supposed-to-be" pattern is up for 10-30 years after first being built, as the area is still growing and becoming more desirable, then down once the growth no longer outpaces the aging.

wiseowise 5y ago

> Cities often don't have one specific point in the center (America's zoning is absolutely horrendous and forces this to happen) and so businesses, restaurants, shopping, activities, and so on are fairly equally spread across towns. That is absolutely not true. There's a reason why it is called center in the first place. Amsterdam, for example is completely flooded by tourists in the center and not so much outside of it.

trinovantes 5y ago
They specifically said cities in Asia Look at the real estate market in Singapore or Tokyo where housing prices are more reasonable
- lasc4r 5y ago
  I was trying to get an idea of what Japanese house prices are, but I couldn't find much beyond the cost of a new house. Which is less than in the US, but not by much more than 10-20%. I understand houses in Japan don't typically appreciate in value like they do in the US though. They like to buy new and don't see it as an investment. I assume a huge factor has to simply be that Japan's GDP and population growth has been basically flat for ~25 years.
  - kukallan 5y ago
    I don't know a lot about Japans housing market, but I've read plenty times that houses are not built to last in Japan which probably has something to do with the low housing prices. https://www.theguardian.com/cities/2017/nov/16/japan-reusable-housing-revolution https://www.theguardian.com/cities/2017/nov/16/japan-reusabl...
    - goodtempe 5y ago
      yes and this is on purpose. This is also partly because the safety standard is ever-evolving due to the precarious nature of Japan. Thus, updating house to the latest safety standard would cost more than just flat it over and rebuild a new one. That's why, the most expensive part is the land and not the building itself.
- forgingahead 5y ago
  Singapore housing prices are in no way "reasonable". There is a large public housing component (80%), but those have also been increasing in price compared to median income, and decreasing in size. For the private market, average prices are now 15x the median yearly salary. [0] Singapore is facing the same issue every other locality is with housing prices: prices have no fundamentals any more and are just inflating upwards out of reach from the median buyer. One can compensate slightly with smaller homes, but that has an impact on fertility rates and other quality of life indicators. [0]: https://www.straitstimes.com/business/invest/property-no-longer-the-best-retirement-investment-dbs-report https://www.straitstimes.com/business/invest/property-no-lon...

jimkleiber 5y ago

I appreciated this other perpsecitve. It also helped me think about building codes and how old homes in the US can get grandfathered into old codes, not having to update to many of the new codes. But what if they did? What if our governance said old homes must be updated? Then old homes would probably be worth less because it costs a lot to retrofit sometimes. I may have some or many of those details wrong, just thought it was another example of how political decisions drive housing prices one way or the other.

sokoloff 5y ago
I think you’d see a lot less progress in building and energy codes if existing buildings had to comply with all the code changes.
- bombcar 5y ago
  You also see this with houses that could duplex or quadplex in place - but it won’t happen because doing so would require bringing the entire building up to current code.
zdragnar 5y ago
If the updates were mandated at the time of sale: You'll find a lot of people trapped in homes they cannot sell. The cost to update very old homes would far exceed what most people can spend out of pocket, and by the time they paid off the debt to do so, the codes may have changed again. Also, older couples who have lived in one place many years and are now retired generally cannot take out lots of money. Instead of being able to sell and move to a senior community or nursing home, they would be stuck with a property they cannot maintain, compounding the problem. Essentially, you would be hurting vulnerable people at the advantage of the young and wealthy. If the updates were mandated as the code changed: See all of the above, but now you're forcing people out of their homes even faster.
- jimkleiber 5y ago
  Oh, I wasn't saying that I believe that is a policy we should enact, I was merely saying that political decisions like that could switch a home from being an asset that increases in value over time to one that decreases in value over time. I agree there are challenges in both having homes that appreciate and homes that depreciate.

robjan 5y ago

The properties themselves lose value over time but the title or lease to the land under the property still increases in value exponentially.

po1nt 5y ago

The thing that increases in value the most is the land underneath the house. It doesn't make a lot of sense for house to increase value as it gets older. But even the house is a subject to inflation and the effect of "back in my days we could buy a toilet bowl for $20" can be seen even here. City centers exist, just look at tourism and public transport. It's more valuable when you can rent out apartment as AirBnb, it becomes more valuable when tourists can't drive, distance from museums and shopping malls increases value and possibility that the land you own could be bought out for development of high density building is what drives the value up. Housing is not a bottle of water you can buy in groceries. Housing is one of the few things most of us buy on debt. If you increase the amount of debt people can take by lowering risks for banks, the price will rise. Also there are many other factors like that cities that complain about high cost of housing mostly have draconian municipal building codes and zonings. Even racism has a play in it, it's truly interesting topic to study.

vanilla_nut 5y ago
I couldn’t agree more with most of your points, but I couldn’t resist nitpicking this one: > Housing is one of the few things most of us buy on debt. Hard disagree there. Most people I know buy phones, cars, bike, washing machines, computers, sofas, desks, and damn near everything else I can imagine on financing plans. I feel like a weirdo because I tend to save up for everything and not accumulate debt! But I also grew up in a very frugal household, so maybe others were raised differently.

antman 5y ago

I will second this. At some point a few decades ago I assisted on studying EU policy plans regarding sustainability. The idea was that city and town design was supposed to have "kernels" of social activity accross their boundaries e.g. shops, schools, businesess including specifically large businesses mostly on the services sector. Also in the EU country I live in schools are managed centrally and equally, so there is no such thing as a "good school district" I read happening in other countries, which seems to expand inequality and cause financial hardship to their population for no reason other than the ideological assumption that central planning is to be avoided.

brongondwana 5y ago
> so there is no such thing as a "good school district" Is this actually legit full true? It might be less of a gradient than other places, but in our two years in Norway our children went to two different public schools which were in immediately adjacent suburbs - both good locations, and there was a definite difference in the management of the schools which was visible through all our interactions with them. The second school was clearly better in our experience, despite being part of the same system. Norway isn't "EU" for those purposes, but I suspect it's similar. The same way that different hire car offices or different pizza parlours in the same "chain" can have quite different quality despite theoretically operating under the same policies. (edited to add) While these things, in theory, normalise out over time as staffing changes in individual schools or individual franchisees - your kids are often only at each school for a handful of years, so there'll definitely be some attempt to find the better ones based on what you hear from parents of kids a year or two ahead... and those with enough money to just move house into the "best" zone will still get their kids into the better school.
- jhgb 5y ago
  I don't know about Norway but in the Czech Republic, there's no "school districts" in the first place, so that would be why there's no "good school district" here. Schooling simply doesn't have geographic boundaries here.
  - 5y ago

DeathArrow 5y ago

People still live in hundred years old "used" houses in Europe and they are generally more valuable than new houses. In much of Europe the core of a city is much more expensive than the periferia.

BoxOfRain 5y ago
Yeah here in the UK I’d be very reluctant to buy a new build. They tend to have terrible build quality relative to the price and often look very dull and “boxy” in my opinion.
- DeathArrow 5y ago
  That too, build quality took a lot of hits. Housing might become consumer goods. In US most houses are made from wood panels and nobody expect them to out live the owner. In Europe most houses were made from bricks and concrete and people passed them to the next generation.
  - nemo44x 5y ago
    Wood framed houses survive many hundred of years. In fact they offer many advantages to bricks.
  - sjg007 5y ago
    >In US most houses are made from wood panels and nobody expect them to out live the owner. This is just nonsense. I expect my house to outlive me.. a wood framed house has a 100 year life expectancy but that will be longer with maintenance. We have older homes from the 1800s too. Plenty of people buy homes from the 1920s.
    - spacedcowboy 5y ago
      I think we’re using different definitions of “old”. My mother’s house is about 250 years old, and that’s not uncommon where she lives. Her house is literally older than this country (I live in the US these days). Her house will probably last at least that again. My house in the Bay Area is ~65 years old, it’s timber frame & stucco. When a strong wing gusts against it in a storm, you can feel the house slightly shudder. It’s not going to fall down (I’m reasonably certain, at least it hasn’t in the last 15 years and we’ve had a few storms :) and it’s not “made from wooden panels”, but in terms of solidity and construction, it’s not in the same ball-park (to use an Americanism) as my mother’s house. Oh, and my house cost today would cost about 10x what my mother’s would… [edit: it’s kind of wild that your username is what I used to sign into Unix systems with when I was in college. Sjg are my initials and they changed our account-names every semester for some reason]

eloisant 5y ago

I'm curious, which Asian countries are you talking about?