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Comment by loudin | Hacker News Reader

A huge part of lower home prices in Japan is that they treat housing as a depreciating asset in their economy. So it's more like buying a car than making an investment.

http://freakonomics.com/2014/02/26/why-are-japanese-homes-di...

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That is an asian thing. Im seeing it with chinese buyers in Vancouver. They dont want a "used" house. New houses are being built to low standards on the assumption that any future buyer will rebuild anyway. Give me a 35yo house with a proven track record over some new thing that could be leaking come winter. Houses are not cars.

And as that Freakonomics episode notes, there's at least an argument that disposable houses have been a factor in the Japanese economic slump. There are good reasons to rebuild housing from scratch (and some Japanese history that probably played into the disposable housing dynamic). But compared to the US, rebuilding housing every 35 years means that you're destroying a lot of capital.

Much depends on specifics. Any 35yo house will have been built to radically different codes. It will probably not be near the maximum square footage now allowed on its lot. So, purely from an investor's point of view, the house is holding back the price. Pulling it may actually makes the land worth more. In my neighbourhood it isnt easy to get a permit simply to replace a small house with a larger one .... unless something catastrophic happens and the old house is doomed. There have been too many leaky roofs left for years, and a few fires, which conveniently lead to the house being declared unliveable or unsafe, the first step to getting a new permit. In such situations the house is definitely worth more down than up.

> Any 35yo house will have been built to radically different codes

And in Japan, earthquake resistance codes change about every 10-20 years, meaning a 35yo house is measurably worse than a new one.

I definitely considered the age of the building when we picked our new apartment due to these concerns.

The Freakonomics podcast referenced upthread does mention earthquake codes and some other factors that have helped lead to houses becoming disposable. Nonetheless, I'd note though that it's not really the case in, say, the Bay Area. It's a behavior that seems to have evolved beyond practical reasons to become a cultural pattern.

There are also good reasons to junk old cars but it would be pretty inefficient if it became a societal taboo to drive a car over five years old or to purchase a used model.

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