Why Houses Depreciate Like Cars In #Japan
Why do Japanese people see real estate like cars that lose value over time?
After the 90s bubble burst, property became something that depreciates rather than appreciates.
Meanwhile, in many Asian cities, real estate prices have been skyrocketing for the past 20 years.
This video explains the cultural and economic reasons behind Japan’s unique property perspective.
#PropertyBubble #AsianMarkets #JapanEconomy
6 Comments
Those A.I.-generated images made me click on the "don't recommend channel" button. I'm sure you have some nice advice but A.I. continues to be a turn-off.
Its going to be the same in china and korea soon.
Japan population also shrinking, so property that idling and didn't generate income is just liability to upkeep and burdening you with tax.
There are two components of a house property, the value of the rights for the land, and the value of the construction.
While the value of construction tends towards zero as time progresses and in the case of an earthquakes, have the extra burden in the form of repairs.
The residual value of the rights over the land remains intact and in most cases increase.
Also, the inheritance laws make it less desirable to view properties in Japan as perpetual estate that can be passed down over generations.
The house depreciates but the land the house is built upon appreciates. That's why land is the REAL estate.
Also remember Japan has a history of being realistic about how much money to spend on a house due to the regularity of earthquakes. The real estate bubble was truly epic and with population numbers falling buying a house is not expensive. I would warn europeans with their numbers falling the outer band real estate is bound to start falling soon. As for China that is a whole kind of crazy unlike anywhere else in the world.