Freakonomics » Why Are Japanese Homes Disposable?
Eric Nakagawa stashed this in JAPAN
This is no way to build an affluent society:
It turns out that half of all homes in Japan are demolished within 38 years — compared to 100 years in the U.S. There is virtually no market for pre-owned homes in Japan, and 60 percent of all homes were built after 1980. In Yoshida’s estimation, while land continues to hold value, physical homes become worthless within 30 years. Other studies have shown this to happen in as little as 15 years.
I don't think these policies or the social norms that support this are optimized over wealth retention. There is a good, practical reason for demolishing homes every 40-50 years.1) By the time the house is being sold it is after major deaths in the family. I think it's a romantic idea to die where your father died, etc. In Japan, you're cremated, mourned for, and then people move on. It is often the desire of the children to sell or build new atop the land or sell off the house and split up the proceeds to the children or towards the caretaking of the remaining parent.2) In 50 years, Technology will have improved dramatically. This means better building methods (better fire protection, better earthquake protection), higher quality of life for new inhabitants (living in a house that is 40-50 years old is nice, but things like central air, warmed floor boards, high speed internet wiring, high tech low-flow toilets and showers need to be retrofitted) did not exist 40-50 years ago. Building a new home every generation is a way to live a safer life.3) Houses in Japan are often completed in less than 3 months. Often, if the job isn't highly customized, if needed it can be done, up to spec, in about 2 weeks.4) Japanese are a consumer culture that values the new and improved over the old. Except for high end consumer goods like luxury fashion, handbags, jewelry Japanese will often only buy products when brand new. There are also government policies in place for incentivizing people to buy new automobiles by increasing taxes on older vehicles. The reasoning was to decrease pollution and it has been quite successful. I think policies like this influence and reinforce shopping behavior for other products -- "newer is: better, cleaner, safer".The Japanese are a practical people. Rebuilding homes allows their children the right to living a modern life in a modern home. They prefer new over used in most cases. Land is at a premium, the structures atop them are simply not as valuable on a long enough time horizon -- land will always outlive generations.
ugh. all my formatting was lost.
I blame iOS for that. We're using a standard widget for format saving. :)
And you make a good point.
A society whose people make wealth by flipping houses to a new generation is not one that's creating wealth by creating value.