4 ms·

A direct consequence of how the West treats real estate as an investment. People bet 10 x their yearly income on a property, and then they will do anything in

A direct consequence of how the West treats real estate as an investment. People bet 10 x their yearly income on a property, and then they will do anything in their power to make that value rise, or at least not fall: NIMBYism. They will block any effort that potentially lowers the value of their property. And I don't think you can blame them, as we can't expect them to voluntarily lose a lot of money.

givemeethekeys 3y ago
People bet a much bigger multiple in Asian countries. US real estate is cheap. Not to mention, the incredible 30 year fixed mortgage.
- yowzadave 3y ago
  I don't think this is true in Japan? https://cheaphousesjapan.com/house-prices-in-japan/ https://cheaphousesjapan.com/house-prices-in-japan/
- bugglebeetle 3y ago
  Not in Japan they don’t. Housing, outside of central Tokyo, is a depreciating asset (and even sometimes is there). Japan also has fixed rate mortgages that are currently offered at a lower interest rate than in the US.
  - tonyarkles 3y ago
    I'm not sure if this is still the case but for quite a while house prices in Japan seemed to be basically just the land value. It was expected that the first thing you'd do after buying a 20-30 year old house was to demolish it and build your own. And since population growth in Japan has flatlined and gone negative it's not a big surprise to me that they don't have a ton of demand for new land/housing.
    - bugglebeetle 3y ago
      This is still mostly the case for single family homes. There is some uptick in resale of “used” homes built since the 2000s, as construction standards have improved dramatically since then, relative to prior years. For additional context, there is very lax enforcement of home building standards for anything single family, both to encourage new construction and because the general principle is it will be torn down in 20-30 years, so why bother. This is of course also leads to a bit of a vicious cycle (which some see as wasteful) where it’s safer to tear down and build new because who knows how whatever you’re buying was built.
      - pezezin 3y ago
        You are spot on. I have been living in Japan for the last 5 years, and the construction quality is absolutely abysmal here. Thermal and noise insulation is almost non-existant (very funny here in Aomori), and the overall layout of the cities and the houses is a complete mess. I read recently that the government passed a new law forcing higher construction quality standards, but let's see what happens...
    - shiroiushi 3y ago
      >And since population growth in Japan has flatlined and gone negative it's not a big surprise to me that they don't have a ton of demand for new land/housing. This is a myth. There's tons of demand for housing in Tokyo, and other large cities. There's no demand in small, remote towns, and the population is moving from rural areas to the big cities, plus there's more immigration, so demand hasn't fallen.
- bart_spoon 3y ago
  Some Asian countries, perhaps. In Japan, real estate is a (in)famously bad investment. Lots of real estate actually loses value over time, more like a vehicle in the US.
  - deleted 3y ago
    [deleted]
  - givemeethekeys 3y ago
    Japan, where the economy has been flat and the population has been falling for a while now is perhaps not a great counter example. Oddly enough, according to this: https://resources.realestate.co.jp/living/how-affordable-is-it-to-buy-a-home-in-japan-compared-to-other-countries/ https://resources.realestate.co.jp/living/how-affordable-is-... homes in the US are still more affordable than those in Japan. I only did a quick search and clicked on the first result, btw, so take that with a boulder of salt.
- urthor 3y ago
  30 year fixed mortgages are actually not as good of an idea as you'd think. I actually spent a significant part of my early career working with real estate economists. A bunch of economists I know actually lost money fixing their mortgages in 2008. They fixed at too high a rate and weren't prepared for the low interest rates environment.
  - givemeethekeys 3y ago
    Did they know that they could refinance as rates drop?
    - pixl97 3y ago
      Yea, if you owned a home and didn't refinance when rates dropped below 3% you were crazy.
- fomine3 3y ago
  For comparison to Japan, "Flat 35" loan is widely available. Even "Flat 50" is a thing.
deleted 3y ago
[deleted]
JumpCrisscross 3y ago
> direct consequence of how the West treats real estate as an investment It's a direct consequence of NEPA privatising environmental review together with our lack of tort reform.
- rayiner 3y ago
  Yes.

givemeethekeys 3y ago

People bet a much bigger multiple in Asian countries. US real estate is cheap. Not to mention, the incredible 30 year fixed mortgage.

yowzadave 3y ago
I don't think this is true in Japan? https://cheaphousesjapan.com/house-prices-in-japan/ https://cheaphousesjapan.com/house-prices-in-japan/
bugglebeetle 3y ago
Not in Japan they don’t. Housing, outside of central Tokyo, is a depreciating asset (and even sometimes is there). Japan also has fixed rate mortgages that are currently offered at a lower interest rate than in the US.
- tonyarkles 3y ago
  I'm not sure if this is still the case but for quite a while house prices in Japan seemed to be basically just the land value. It was expected that the first thing you'd do after buying a 20-30 year old house was to demolish it and build your own. And since population growth in Japan has flatlined and gone negative it's not a big surprise to me that they don't have a ton of demand for new land/housing.
  - bugglebeetle 3y ago
    This is still mostly the case for single family homes. There is some uptick in resale of “used” homes built since the 2000s, as construction standards have improved dramatically since then, relative to prior years. For additional context, there is very lax enforcement of home building standards for anything single family, both to encourage new construction and because the general principle is it will be torn down in 20-30 years, so why bother. This is of course also leads to a bit of a vicious cycle (which some see as wasteful) where it’s safer to tear down and build new because who knows how whatever you’re buying was built.
    - pezezin 3y ago
      You are spot on. I have been living in Japan for the last 5 years, and the construction quality is absolutely abysmal here. Thermal and noise insulation is almost non-existant (very funny here in Aomori), and the overall layout of the cities and the houses is a complete mess. I read recently that the government passed a new law forcing higher construction quality standards, but let's see what happens...
  - shiroiushi 3y ago
    >And since population growth in Japan has flatlined and gone negative it's not a big surprise to me that they don't have a ton of demand for new land/housing. This is a myth. There's tons of demand for housing in Tokyo, and other large cities. There's no demand in small, remote towns, and the population is moving from rural areas to the big cities, plus there's more immigration, so demand hasn't fallen.
bart_spoon 3y ago
Some Asian countries, perhaps. In Japan, real estate is a (in)famously bad investment. Lots of real estate actually loses value over time, more like a vehicle in the US.
- deleted 3y ago
  [deleted]
- givemeethekeys 3y ago
  Japan, where the economy has been flat and the population has been falling for a while now is perhaps not a great counter example. Oddly enough, according to this: https://resources.realestate.co.jp/living/how-affordable-is-it-to-buy-a-home-in-japan-compared-to-other-countries/ https://resources.realestate.co.jp/living/how-affordable-is-... homes in the US are still more affordable than those in Japan. I only did a quick search and clicked on the first result, btw, so take that with a boulder of salt.
urthor 3y ago
30 year fixed mortgages are actually not as good of an idea as you'd think. I actually spent a significant part of my early career working with real estate economists. A bunch of economists I know actually lost money fixing their mortgages in 2008. They fixed at too high a rate and weren't prepared for the low interest rates environment.
- givemeethekeys 3y ago
  Did they know that they could refinance as rates drop?
  - pixl97 3y ago
    Yea, if you owned a home and didn't refinance when rates dropped below 3% you were crazy.
fomine3 3y ago
For comparison to Japan, "Flat 35" loan is widely available. Even "Flat 50" is a thing.

deleted 3y ago

[deleted]

JumpCrisscross 3y ago

> direct consequence of how the West treats real estate as an investment It's a direct consequence of NEPA privatising environmental review together with our lack of tort reform.

rayiner 3y ago
Yes.