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Comment by seanmcdirmid | Hacker News Reader

> Start incentivizing treating housing as, you know, a place to live rather than a financial instrument and you'll see plenty more condos.

This happens in Japan, but happens mainly as a result of:

a. No one sees real estate as a sure shot after the excess of the 80s.

b. Declining population means even Tokyo has a lot of extra housing.

c. It is easy to rebuild housing, so people rarely buy "used" homes, leaving on the land as a real estate vehicle for appreciation (the structure is overhead). Condos are almost worthless speculative assets in that sense.

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Tokyo’s population has constantly risen, even as japan’s has fallen. Tokyo has inexpensive housing because they’ve allowed people to build it. You can compare the chart of new housing growth in Tokyo versus Paris, London and NY, and Tokyo blows them out of the water.

Yes, but not explosively so, and increasing density of built structures means prices haven’t really risen much.

Don’t count new housing growth in Tokyo if you aren’t counting housing destruction as well, otherwise the numbers aren’t comparable to other cities (where new housing usually means “new” housing, not just rebuilt housing).

C is the really important piece of the puzzle here. Tokyo allows for a lot of building because zoning and codes are more permissive.

But. From when I lived there, my general observation was that in exchange for keeping the cost of the house fixed, rising property values is dealt with by making property lots smaller. Where 1 house stood now stands 2.

I would like to add

D. apartments are plentiful and cheap. I paid ~300USD a month for a small apartment in an outer suburb of a mediumish city. I was making ~2500USD a month.

It's also the case in China where 73% of millennials are homeowners.

Considering china is still very rural that doesn’t seem surprising. But China is still in their 1980s Japan phase where real estate in Shanghai is worth more than all of California.

China just builds out entire cities years before they're necessary.

It's not a deliberate policy. There's precious little else to put your money in so the Chinese end up using property as a savings account.

Developers will often skimp on construction quality as a result, since they know that nobody will actually be living in them.

You seem to have read the western propaganda that has misrepresented the situation: https://en.wikipedia.org/wiki/Under-occupied_developments_in...

In what way is it a misrepresentation?

Thats just a link to a page on ghost cities.

https://en.wikipedia.org/wiki/Under-occupied_developments_in...

Yes, and often those cities will be torn down before they are actually used. It’s all good: turns out demolition also counts as positive GDP in their statistics.

> a. No one sees real estate as a sure shot after the excess of the 80s.

That sounds ominous. Are there good comparisons of how excessive the real estate market is in the US today vs. Japan during the 80s?

> Between 1956 and 1986, the price of land increased by as much as 5,000 per cent in Japan. At the peak of the bubble economy, Tokyo real estate could sell for as much as US$139,000 per square foot, which was nearly 350 times as much as equivalent space in Manhattan. By that reckoning, the Imperial Palace in Tokyo was worth as much as the entire US state of California. The Japanese property market was worth four times more than the US property market

https://www.scmp.com/magazines/style/news-trends/article/309...

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