I think this is becoming increasingly less common. I am seeing lots of 30+ year old homes for sale in my local market that have been renovated by the seller before putting it up for sale. Housing quality has improved significantly since the post-WW2 era, so there’s no need to tear down a 30-year old home anymore. Some new appliances, wallpaper, and flooring is enough to attract a buyer.

I do still see a lot of houses being torn down. But they are more like 50+ years old, and in such a state of disrepair that they are not worth saving.

>I think this is becoming increasingly less common.

That should be the case. As regulations get stiffer and stiffer the amount of area under the "long tail" get smaller. Of course there's always people who want to screech about how more is needed but at some point the tail is so narrow that society just ignores them because the amortized cost per improvement is just so high it's a no-starter.

I agree. I just bought a 20 year old place and it’s still in fine condition (and freshly renovated). Im planning to live in it for a while but honestly I wouldn’t be surprised if so long as I renovate it before selling I can get basically the same as what I paid now in another 10 or 15 years.

>I can get basically the same as what I paid now in another 10 or 15 years.

Accounting for inflation, or without (even approximately)?

Is Japan inflationary? I know their central bank actually had negative interest rates for a long time.. still, maybe.

A whole 4% year-over-year. Seems like a pretty healthy level of inflation to me.

https://www.bloomberg.com/news/articles/2023-01-19/japan-s-i...

May I ask how difficult this was, in terms of paperwork and so forth, and (if you're not Japanese) getting to know your new neighbors? Thanks.

From what I've seen, buying a house is easy (you can hire brokers/realtors to do the paperwork) but the biggest hurdle is your visa status. Owning property does not entitle you to stay in-country longer than 90 days. You'll need a local job or spouse in order to reside there.

Loans can also be difficult for foreigners to acquire, so prearrange financing or cash.

I am not the person you responded to. I bought a house in Nagano last year. After living in Tokyo a long time The paperwork was not too difficult. Takes about 3 hours to walk through it all, in the presence of the seller, realtor and scrivener. Hand over the cash and take ownership.

The neighbours have been unexpectedly wonderful. Very kind. I live there most of the time and wish to contribute. I actually think it's advantageous to be a (European) foreigner. They realise all the little nit-picks that Japanese do to each other in the service of community would be mostly lost on me. YMMV.

Having lived in Tokyo for a long time probably helped, as you are familiar with the language, local customs, and dealing with beaurocracy. I'm not sure if the parent has prior experience living in Japan, but if not I would think the whole process could be quite bewildering.

I do have longtime priors, but there are always new things to learn. Thanks.

Ok then I would agree buying a house is easy. A real-estate agent should take care of everything and you are only really responsible for stamping your seal (about 100 times) and transfering the money.

Getting a loan is also fairly easy provided you are employed and have permanent residency (or a spouse who is a permanent resident or citizen). Shinsei Bank (recently acquired by SBI) seems to specialize in loaning to foreigners.

Neighbor situation is highly variable. I have some neighbors who I am quite friendly with, and others I literally have never seen. Typically neigbors will at least be polite, but you do hear horror stories of neighbors quarreling about taking out the trash, snow falling from the roof onto the neighbor's property, etc. My next-door neighbors live with their aging parents, and the grandfather (who has dementia) once shouted at someone who was doing work on my house. And people do tend to gossip, but it's mostly harmless.

That's helpful advice. Thanks again.

I have some passive knowledge of seals as used by Japanese folk

What determines the design of ones' seal as a foreigner? Just transliteration?

A Jitsu-in, which is the most official type of seal and is registered with the city office, needs to match your legal name. So mine is just my family name in latin characters. It looks funny but does the job.

For less formal seals you can pretty much pick whatever you want. For those I use my family name transliterated into katakana.

Most important regulation for earthquake proof was made in 1981, that is about 40 years ago. It's often mentioned first on buying house checklist. So I expect that more houses will be supplied to market.

I wonder if japan has an architect industrial complex that would lobby to keep regulatory changes regular.

Buildings lose value over time in most places. And in many places where they don't, including renovation investments in the picture results shows declining value.

The only places where buildings go up in value is where the building has been grandfathered in and is no longer able to be built in accordance with modern zoning rules.

Which is rather common in my experience. The town adjacent to the one I just moved to has a bunch of duplexes, but if you look at the current zoning it's all single-family-only. You couldn't build much of the town as it is today, which is a shame as it's very nice.

As you might expect given this, the town has steadily lost population.

Existing buildings will go up in value in an environment where construction costs are rising and the cost of replacement is increasing.

Here in the Netherlands this is absolutely not true for houses. My house, despite no renovations done, has more than doubled in value over the past ten years. Housing shortages make sure that existing houses are definitely not losing value.

But is that the value of the building, or the land that is increasing for yours? My home (building + land) value has gone up a ton due to the housing shortages in tech centers, but on the assessment, the building value has gone down, while the land value has shot up a lot.

Buildings always lose value over time unless they have exceptional historical value.

A small, new apartment next to the old, big apartment I live in is much more expensive than mine. And mine was considered high end when it was built.

Your claim is something different.

You're claiming that _relative to newer buildings_, yours has lost value.

The parent poster is claiming that _relative to the same building in the past_, prices go down in japan and up elsewhere.

Would the apartment you live in now have cost more or less 5 or 10 years ago? That's really the thing the parent poster is talking about, and other newer constructions are unrelated to that point.

> Buildings LOSE value over time.

This is not unique to Japan. Buildings depreciate.

You only notice it in Japan because general inflation has been close to 0% and sometimes negative.

Also - people in Japan tend to spend much less money updating their home compared to the rest of "The West". If you're sinking 1% of the value of your home into updates annually - the home isn't going to depreciate as much as if you didn't.

Buildings lose value in almost every market. It’s just that in western cities the land increases by so much more than the building decreases we don’t notice it.

Yes, but there remain factors that cause the value of western building to rise in value even decades later (my 120 year old house is worth $90,000 and going up in value). For example as construction costs increase, replacement costs increase, which causes the value of an existing building to rise.

This is apparently not the case, and for some odd reason (probably government and tax policy) a house absolutely goes to $0 in 25 years and stays there.

It is very weird how houses depreciate very quickly in Japan.

There is surely intentional government policy behind this, and this would have significant impacts on the broader housing environment.

I recall reading at one point for example that the property transfer tax is lower for empty lots than it is for occupied lots. Another subtle housing policy that incentivizes people to tear down old houses.

Much has been written about Japan's zoning impacting its housing prices and rents, but imo it's as likely that the various tax and housing policy that creates this incentive to tear down homes is as important of a factor in creating a housing market that looks very different from other rich nations.

It's just a notional loss for tax purposes. Japan has generous depreciation loopholes, some of which was closed a few years ago.

In Japan, houses were treated as capital expenses. Other countries treat housing as capital assets. Things may have changed in Japan in the past two decades, but that's how things worked up into the late 90s/early 00s when I stopped studying all things Japanese. This financial treatment was why so many smaller/rural communities were turning into ghost towns.

Not really. Japan isn't unique in how property is valued. Real estate values in market-based economies are set by the market. Cap rates in Japan are comparable to the US and other major markets. Assigning value to land or improvements is just accounting. Buildings in Japan (and elsewhere) "lose value" over time due to depreciation, not because only land has value. There are huge tax advantages to owning real estate vs other asset classes. For example, Japanese real estate owners take advantage of accelerated depreciation for wooden structures as a tax shield.