4 ms·
> According to Nomura, a brokerage, the value of the average Japanese house depreciates to zero in 22 years. (It is calculated separately from the land, which i
by laurieg 3y ago
> According to Nomura, a brokerage, the value of the average Japanese house depreciates to zero in 22 years. (It is calculated separately from the land, which is more likely to hold its value.) Most are knocked down and rebuilt.
This is talking about the assessed value of the house. It also implies that when a house reaches 22 years it is instantly knocked down and rebuilt, which is not true.
> The frequency of earthquakes also plays a part. Large tremors tend to be followed by tougher building regulations.
Even without the regulations, the level of destruction is hard to understand. Walking through a suburb of Kumamoto after the big earthquake in 2016 it seemed like every third house had partially collapsed. Landslides and flooding are also common.
Housing in Japan seems a world apart from housing in the UK. In Japan, I have lived in the same rented apartment with no rent increases for a decade. This is unimaginable in the UK. Strong tenants rights mean that once you are in a place you can more or less expected to be in there until you want to leave. The letter of the law on rent increases is that they must be justified by the surrounding market, but the cultural trend is to wait until a tenant has moved out.
Articles about cheap or free houses in the countryside of Japan pop up every now and again but the reality is most of these houses are worthless. Unoccupied, it only takes a few years for a leak to spring in the roof and the wooden house will rot away to nothing very quickly after that. They are located far from any kind of desirable jobs and services. Sometimes the owners, usually children who have moved to Tokyo for work, don't want to sell. I remember looking at one place, in a state of partial collapse, with the dates the family had come to visit written onto the wall by the front door. Yearly visits for over a decade but few repairs meant that the house probably wouldn't be around for much longer.
- resolutebat 3y ago> In Japan, I have lived in the same rented apartment with no rent increases for a decade. This is unimaginable in the UK. This is also because Japan has been at zero or negative inflation for the past decade, while the UK has not. Also, essentially the entire country outside of Tokyo is shrinking in population, which obviously depresses property prices.
- Tade0 3y ago> Also, essentially the entire country outside of Tokyo is shrinking in population, which obviously depresses property prices. I wish this was a significant effect, but my country peaked in population in the late 90s and had Japan-level fertility (and suicide BTW) rates since, but we got hit with the same insane housing price increases as everyone else.
- Schiendelman 3y agoWhat country?
- Tade0 3y agoPoland. Second chart shows average transaction prices per square metre in Warsaw - yellow is new apartments, blue indicates used: https://zametr.pl/ceny-mieszkan/warszawa https://zametr.pl/ceny-mieszkan/warszawa Around 2017, when there was little to no inflation, prices started going up. This can't be explained by things like the influx of Ukrainians, since that originally started en masse after the annexation of Crimea in 2014. Also there's no such effect in 2022. What is known though is that starting in 2014 investment properties started becoming an increasingly large proportion of the market - going from single-digit percentages in 2012 to 42%+ right before the pandemic.
- HDMI_Cable 3y agoWhat country? Perhaps the combined effect of deflationary pressure, Japanese-specific zoning laws, and shrinking population has created this lack of housing crisis.
- midoridensha 3y ago>It also implies that when a house reaches 22 years it is instantly knocked down and rebuilt, which is not true. Yes, this is an annoyingly common misconception about Japanese housing. Just walking around a few random residential neighborhoods in Tokyo should disabuse anyone of the notion that homes here are all knocked down after a mere 22 years. Buying secondhand homes here (whether stand-alone homes or condos) is very, very common. Misinformed articles like this are too common in western press.
- ozim 3y agoSomehow I trust article more because they base it on statements from housing broker who seems to have much more data than single person living in Tokyo. Maybe housing broker has skin in the game to push people to sell their houses for 0 to the broker as a scam.
- midoridensha 3y agoYou trust some random housing broker more than your own eyes?
- freetime2 3y ago> It also implies that when a house reaches 22 years it is instantly knocked down and rebuilt I don't think it implies that. It just implies that the real-estate market values the land about the same as the land and house combined. Of course the current inhabitant might well value the house more than the market - selling a house and moving (or demolishing a house and rebuilding) is inconvenient and includes a lot of hefty fees and taxes after all - which is why people continue to live in their homes for years or decades after the value of the dwelling drops to nothing and even turns negative.
- anticodon 3y ago> Even without the regulations, the level of destruction is hard to understand. It's not only in Japan. I've seen this in other Asian countries as well. Perfectly good and relatively new building is destroyed to build another building that is not very different in size/structure. I guess, it's something different in attitude towards environment. E.g. I wouldn't like my city to be rebuilt constantly. I like old buildings, history related to them. In Asia they probably feel different.
- blitzar 3y agoI have renovated properties before. It can be far cheaper (like half the cost) to bulldoze a property and rebuild it from scratch, especially if you are trying to update to sensible modern standards from 60's/70's/80's "standards".
- michaelt 3y agoI suspect there's a self-sustaining cycle. If you know the building will be torn down in 20 years, there's no point in spending $$$ on maintainability and long-life building materials. And hence after 20 years, it might be thoroughly worn out.
- deleted 3y ago[deleted]
- appplication 3y agoIn the US, investment properties are depreciated over 27.5 years, also calculated independently from land, so not that different.