But doesn't Japan also have some weird customs/rules around housing stock age? I remember reading that most things get torn down and rebuilt at 20(?) years max for {reasons}?
- there was a postwar housing shortage, so the housing quality that came up to meet that demand quickly was not good. even if the house is still maintained well (a later point), japan has seen meteoric rises with living standards over the past 100 years, so it probably isn't compatible with modern wants and needs
- Japanese earthquake codes were regularly revised until 1981 after lessons learned from disasters. buildings from before that time have a significantly higher rate of collapse during earthquakes, so buying one and keeping it is a bit of a gamble on your life
- because of the depreciation, there isn't a lot of incentive to maintain your house well to the point where it can last more than 30 years
of course, all these things might be less true now that Japan has stagnated since the '90s, so there are reports of more people accepting renovating a house they buy rather than tearing down.
That explains it! I hadn't thought about the systemic flywheel caused by real estate valuations. Where if depreciation is a market assumption, values depreciate, which impacts financing options. And people expect values to depreciate, so people don't maintain and renovate, which ultimately fulfills the depreciation prophecy.
- construction is really big business in Japan, and as a result has deep ties to politics and is a usual beneficiary of Japanese stimulus programs (of which there have been many, since Japan has tried and failed at spending its way out of deflation)
- NIMBYism on buildings is much lower than in the US or Europe, due to the expectation that they are temporary
- because of the lack of NIMBYism, Japanese architects get a lot of leeway to build cutting edge projects, and so are very well represented in the world of star-chitecture
I think people are confused by the term (length of fixed rate) versus amortization (total time to pay off debt).
In Canada mortgages are typically 25 or 30 year amortization periods, but you can only fix the rate for 10 years (usually less as you get a much lower rate).
After the 5 years you renew your mortgage at the current interest rate with the same bank, or try and refinance entirely which requires the same paperwork as a new mortgage.
The US and I believe Netherlands are the rare countries where you can get fixed rate for the entire 30 year amortization period.
