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Japan's foolish housing situation

nahadef

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If you haven't already heard it, go listen to this podcast:
Freakonomics ? Why Are Japanese Homes Disposable? A New Freakonomics Radio Podcast

I've been looking at houses for nearly a year with the missus. The more I looked, the bleaker it got. I have learned that Japanese people think of houses as 'new' and 'used.' They tend to upkeep much less than Westerners. As a result, existing houses decrease to a value of zero over 20 years. I think it's a massive waste of wealth. In the West, a houses value carries over to the children, but in Japan, families loses tens of millions of yen because of this system. It's not the cause of Japan's economic slump, but it has to be a massive weight on the country. Every generation, every family loses tens of millions of yen that doesn't happen in most countries in the developed world. Housing isn't really going to go up in a country with Japan's shrinking population, but it shouldn't fall to simply land value.

The government seems to actively support this system. There are tax breaks aplenty for new houses that used houses don't get (currently, there is a 5,000,000 yen tax break on new houses that are eco-friendly). It is to create jobs in construction, and spur the housing industry. But I think the cost to the country is way higher. Some working class people get jobs, and the whole of the country loses much of their wealth.

Is there a way to fix Japan's dead-end system? Have you had to deal with it?
 
I have always been puzzled by the house market in Japan too.

That podcast is really interesting.

The points raised as in it as explanations for the knocking down of houses (more than half before they are 38 years old) and building new ones on the same land are:

1. A cultural thing, going back to the Shinto traditions of new things being clean and pure.
2. The Japanese simply prefering new things - new TV every 3 years, new car every 5 years, new house every 20 years!
3. Fear of earthquakes and other natural disasters leading to almost no maintenance on the houses after they are built.
4. The improvement of building regulations to meet anti - earthquake standards.
5. The government led drive to keep the construction industry churning over.

It's still puzzling if you ask me, particularly when you see the superb build quality of new houses going up there today, compared to 20 or 30 years ago.

Two of my nieces have built new houses in Japan in the last couple of years and they would not even consider buying a 'used' home!!

I think most Japanese simply don't consider the residential property market as an investment as we do in a lot of other countries ... they simply look at a mortgage being cheaper than renting with the J Banks generous interest rates.
 
Have not listened to the podcast, so bear with me.

Some problems with housing include the fact that many foreigners can't get loans to build, even with a spousal visa.

Some companies are helping (Japanese and foreigners) to overcome the housing situation by renovating the inside of houses and condos (mansions), leaving them in almost new condition (except for the outside). These are then sold at prices 1/3 to 1/2 the cost of a new place.
 
Like most of Japan's problems I would say the housing issues are caused by inflexible biz traditions, closed markets and a lack of innovation...
 
as for house, the Japanese think it is strong it applies concept of depreciable assets like car..
and house value is not decided by owner. it decides it by buyer as same as like other countries

Because it is drier than Japan in the United States, there is it in the environment that is hard to rot even if I use wood for a house in the same way.You do not need to worry about damage about the white ant like that either

If there are many people who want to live there, the value does not fall. just simple as a market

as for ise shrine
 
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caster55 said:
Because it is drier than Japan in the United States, there is it in the environment that is hard to rot even if I use wood for a house in the same way.
Click to expand...
Here we go again about how Japan is so unique. Sorry, caster, but what part of the US is drier than Japan? Florida? Texas? Minnesota? Hawaii? Oklahoma?
 
most of them

and this thread is as same as typical one.
which house?
 
Not to dry in Maine this year , LOL. Woke up this morning with an inch of new snow. We had about 8 or 9 feet of snow so far. We call spring here in Maine , ""mud season" and usually get a lot of rain until July. We don't have termites here in Maine , but we do have carpenter ants. They are 1/2 to 1 inch long and can't destroy a house in just 2 or 3 years. Almost everything we build here has to be with treated lumber that resists insects and moisture. Our houses have to be built to last. We often have storms with 50 to 75 mile per hour winds and very heavy loads of snow on the roof in winter. Home value is very important to us. My home cost 48 thousand when we bought it and was just appraised for $220 thousand after 30 years of living here.

Uncle Frank
 
I bought a used place, a 'reform' as they call it. It's all nice inside but we have a nipper and four cats now and it's really becoming way too small for our needs. I thought about selling it again (for next to nothing) or sub-letting it out. The mother in law legally owns the place.
 
caster55 said:
as for house, the Japanese think it is strong it applies concept of depreciable assets like car..
and house value is not decided by owner. it decides it by buyer as same as like other countries
Click to expand...
Really? So when you live in a house for 30 years without looking for a buyer and your property tax rate falls until a value of zero, that is decided by the buyer? No, that is the Japanese system, that everyone has accepted, to the detriment of the whole country's economy.
Because it is drier than Japan in the United States, there is it in the environment that is hard to rot even if I use wood for a house in the same way.You do not need to worry about damage about the white ant like that either
Click to expand...
So theoretically, Japanese houses should be worth more since they aren't deteriorating like American houses?
If there are many people who want to live there, the value does not fall. just simple as a market
Click to expand...
No, the whole basis for Japan's market is backwards. But of course, you don't read a thread and consider points, you just bust in with a whole lot of comments explaining the correctness of Japan. We got it.
 
Uncle Frank said:
My home cost 48 thousand when we bought it and was just appraised for $220 thousand after 30 years of living here.
Click to expand...
That's the whole problem with Japan's system. Your house would be worth $110,000 if it were in Japan, because the house would have zero value, regardless of whether you took care of it or not. It's not the demands of the market, but Japan's whole system that pronounces structure as something going down to nothing.
 
I guess the Japanese housing market must be quite frustrating because our good old speculators from the US and UK cannot really make lot of money in Japan. Buying a house today and waiting for years to sell it with a huge profit like they have been doing abroad just does not work here.

Seeing what happened with the US housing market and the subprime mortgage crisis does not make me sad for the foreigners who own a house in Japan.
 
at first, a buyer decide the price where he is going to buy or not.
when you sell 30 years old house with good condition , it is natural that the price would be higher more than poor condition in same place.
because he kept good condition and repaired. that is why it is kept good condition.
and they negotiate the price with a real estate agent.
as for car , i yokohama and Nagano's car are cheap how much they care becuase it is damaged by seawater and salt is winter

and a house is depreciable assets.
as for the price .it is getting to decrease. typhoon. snow, earthquake and rainy season. it damage it a lot.


the house market is small in Japan. most of them is arm's length transaction. there is rare house of Market price because of various types of house and ages .unlike american cookie cutter houses in suburb. there is no home inspection system in market
actually 30 years old house value is Zero.
and at least ,ratio of remaining value is 10% . of course., it is decided by demand and supply.

in case of me , The valuation of the real estate should be low becuase of ..Inheritance tax and Property tax though market price is different.
There will be few people to sell a house in Japan comparing to USA. because people do not tend to move.
There is not the idea to tell to raise a property value because it can not sell it for next house
 
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caster55 said:
There will be few people to sell a house in Japan comparting to USA. because people do not tend to move.
Click to expand...

People don't move because their houses are worthless, and they don't want to pay for a new one.
 
So rapidly rising housing prices that creates massive bubbles that forces the gov. to keep it high is good?
No one can afford houses in the US anymore and it's still going up. The next US generation will have no hope of ever buying a house unless they get handed 1 by their parents.
What's good for the "economy" is rarely good for the people.

What rising houses prices does is that it forces the economy to become reliant on it, and it requires ever increased acceleration on its value to keep the system afloat. Now you are stuck in a situation where if you allow prices to fall or stagnant you screw the economy, but it's already out of reach by 99% of the population thus creating social instability.
 
Who said houses prices needed to to rapidly rise? Japan's situation is that a house decreases to zero over about 20 years, meaning a massive loss to the buyer. Did you read the thread? Do you think that makes houses affordable in Japan? Houses are still expensive, as in America, except that you lose a lot of that money over time. Sounds like a lose lose situation to me.
 

I'll bite and posit this. Taxes in America are lower than most anywhere in the world. Starting a company in the US is legally speaking easier than most countries. The cost of living in many parts of America is considerably lower than Europe or Japan. Americans have one of the highest standards of living in the world, and rather high base wages.

Why then do most Americans have trouble affording stuff? Easy, Americans are bad with money. People get greedy and buy stuff they can't afford. Keeping up with the jones costs money. In poor communities, I would often see people eating out at Taco Bell, KFC, BK or so forth. Why not cook at home? Why buy a sound system for your car if you can barely afford gas? Why buy a plasma screen TV on layaway when you could buy one from a garage sale?

The thing is many people in the US, at least people that I knew, live way beyond their means. They don't save money and they live irresponsibly, then they blame their poor decisions on the economy, the government, some "ism" or politicians. It's never their own fault. Honestly I'm rather sick of the constant whine-fest that comes from most Americans. The working poor in Japan still pay taxes, whereas many Americans do not. Unemployment is lower here to boot. Yet the poor in America are often still unemployed and fat and complaining about their lives. Whereas the conbini employees in Japan are all smiles.

My two cents? America has some responsibility issues, and a horrifyingly bad national entitlement complex.


EDIT:

I messed up my life in Japan by living this way. I know all about being a bad decision maker. Not working hard. I barely learned Japanese. I drank too much. Whose fault was that. Was it Japan's fault? No, it was my fault and completely my own fault. For making bad decisions.
 
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