3 ms·
Interest rates don’t really matter to housing prices when supply and demand are at equilibrium. It may shift that equilibrium point but Japan has had the same e
by arcticbull 4y ago
Interest rates don’t really matter to housing prices when supply and demand are at equilibrium. It may shift that equilibrium point but Japan has had the same exact interest rate policy as the US over the same time period but the price of a house in Japan hasn’t increased in nominal terms since 1990.
Everything you point out isn’t driven by interest rates but instead by artificial supply constraints on housing.
- kurthr 4y agoWell, actually Japan's interest rates haven't been falling they have been below the inflation rate (eg mostly below 1) for the last 30 years. That is literally the lost 3 decades since 89, when they had a huge housing crash. https://tradingeconomics.com/japan/interest-rate https://tradingeconomics.com/japan/interest-rate No housing is not a financial asset in Japan. However, China where they have built massive quantities of housing, it is an exceptionally expensive financialized asset, because that is where lending went.
- arcticbull 4y agoHousing isn’t a financial asset in Japan because you can build as much as you need so it doesn’t appreciate. Once supply caught up and overshot in china prices plummeted. It really is that simple.