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Comment by chii | Hacker News Reader

> stop viewing housing as “investment”

whether something is an investment or not is not a subjective opinion, but an objective fact.

If it takes effort, capital and time/labour to create, it's an investment, because such resources have alternative uses.

Just because this cost have been paid as a lump sum in the past (for constructing a building and/or buying the land etc), doesn't mean that cost is now sunk and is "lost" - it is, and must be, recouped in the future, otherwise the initial cost will not make sense to have been spent, and said investment would not be made and the world would now have one less of it.

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Now do cars and food…

There’s no reason that the cost of something you need “must be recouped” in future by you having and using that thing.

> Now do cars and food…

Food is obviously not comparable (you must consume it and only s*t is left over).

Cars depreciate quickly becase they wear out in the timespan of a couple decades. You can keep them going longer but it's a labor of love, not really economically worthwhile.

Housing is completely different. Absent some disaster (fire, earthquakes) it will last centuries with just basic routine maintenance. Given that inflation is a perpetual constant, something that lasts that long can't possibly not appreciate, it inevitably must.

With all due respect I am not sure how you can write this with a straight face. You premise is that "something that last long can't possibly not appreciate"?? I am sure you can find myriad of examples where this simply does not hold water.

The housing is artificially inflated and you are one administration away (e.g. see current one for the kind of power we experience in 'democracy') from having your "investment" worth a lot less than you think it is. Why do you think you and I are able to deduct mortgage interest but when I charge my credit card for gambling, hookers and cocaine (a lot more enjoyable than housing) I am unable to deduct my 29.99% interest on my Visa?! What about "villas for 1 euro" that you can buy throughout say Italy? some of them are older than our country is and I am not sure you'd be happy with your "investment" if you bought it in 1999 but you know, "something that last that long can't possibly not appreciate, right?!"

> You premise is that "something that last long can't possibly not appreciate"??

Not "something", housing. A pebble may last billions of years and not appreciate, but we're talking housing.

Yes housing which last a very long time cannot help but appreciate because we always have inflation. The only exception is what you identified, if the town has an economic collapse. Then, sure, nobody wants to live there. Detroit of the past being the typical USA example.

Looking at records my house cost ~$90/sqft to build. Today the exact same house on the exact same lot would cost about ~$500/sqft to build on the low end if you can find the labor, but probably closer to ~$650/sqft if you want to get it done this year.

So of course the older equivalent houses in the neighborhood will match in price to the new construction. Anything else would be impossible.

If you disagree, explain by what mechanism the old house wouldn't do that?

It can easily not appreciate if more of it is built than is needed (glut of supply) or nobody wants to live in that places anymore (lack of demand).

There are multiple real examples of both, even in America.

the investment for a car is in the manufacturing facility, similarly with food. While there's a consumption component to both, it's the same as a house - it's an investment to build it, and it produces shelter (which would be the equivalent of the food from the investment in a farm).

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