Introduction
Hey, corporate warriors! ๐ Ever wondered why Japan has millions of abandoned homes that are practically free? Let's dive into the fascinating dynamics of the Japanese housing market and what sets it apart from the rest of the world.
The Concept of Housing: A Consumer Good, Not an Investment ๐๐ฐ
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In Japan, a house is not an investment you grow over time. It's a consumer good that depreciates rapidly, much like a car or a refrigerator. Within 30 years, the value of a typical Japanese home drops to almost zero.
The Earthquake Factor: A Ticking Clock โฐ๐
Japan's susceptibility to earthquakes plays a significant role in this rapid depreciation. Newer buildings are considered safer, and building codes are updated periodically to prepare for future quakes.
The Legacy of WWII: A Rush to Rebuild ๐๏ธ๐ฐ๏ธ
Post-WWII Japan faced a housing crisis, with nearly a third of urban homes bombed. The government stepped in with subsidized interest rates, leading to the construction of 20 million units by 2007. However, these were often cheap, wooden houses that lasted only a few decades.
The Tax Incentive: A Peculiar Twist ๐ต๐
Until 2015, small residential plots were taxed 80% less if they contained a structure. This led to a lack of incentive to demolish unused houses, contributing to the current abundance of abandoned homes.
The Zoning Difference: Freedom to Build ๐ ๐บ๏ธ
Japan's zoning laws are set at the national level, not local. With just twelve zoning codes for the entire country, developers have more freedom to build what they want, where they want. This has led to a variety of architectural styles and a high number of architects per capita.
The Supply-Demand Balance: A Unique Scenario โ๏ธ๐
Japan manages to balance housing affordability by both increasing supply and decreasing demand. Its declining population reduces the need for new homes, while the country's building frenzy ensures there's no shortage of supply.
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