Re:Could High-Speed Rail Ease California’s Housing Crisis? S...
by Aeolun on Friday January 25, 2019 @08:01PM
(#19004017)
One point is that most people do not want to live in an old house that someone lived in (or worse, died in) before. There is a strong tendency towards building new houses on old land.
I can only speak for Tokyo, but it basically means that if you buy land for $400k and build a house for $200k, the value of the second will slowly approach zero, while the price of the land does what it does.
In Tokyo this appreciates a bit, so your wealth remains more or less the same.
If you go outside of Tokyo though, where the ratio becomes more like $50k land, $100k house, it’s easy to see that it’s not something you do as an investment. Land won’t increase in value there either as everyone is leaving for Tokyo.
I can only speak for Tokyo, but it basically means that if you buy land for $400k and build a house for $200k, the value of the second will slowly approach zero, while the price of the land does what it does.
In Tokyo this appreciates a bit, so your wealth remains more or less the same.
If you go outside of Tokyo though, where the ratio becomes more like $50k land, $100k house, it’s easy to see that it’s not something you do as an investment. Land won’t increase in value there either as everyone is leaving for Tokyo.