14 ms·
That explains it! I hadn't thought about the systemic flywheel caused by real estate valuations. Where if depreciation is a market assumption, values depreciate
by ethbr0 4y ago
That explains it! I hadn't thought about the systemic flywheel caused by real estate valuations. Where if depreciation is a market assumption, values depreciate, which impacts financing options. And people expect values to depreciate, so people don't maintain and renovate, which ultimately fulfills the depreciation prophecy.
- bobthepanda 4y agoThis systemic expectation also has other effects. - construction is really big business in Japan, and as a result has deep ties to politics and is a usual beneficiary of Japanese stimulus programs (of which there have been many, since Japan has tried and failed at spending its way out of deflation) - NIMBYism on buildings is much lower than in the US or Europe, due to the expectation that they are temporary - because of the lack of NIMBYism, Japanese architects get a lot of leeway to build cutting edge projects, and so are very well represented in the world of star-chitecture