Practice English Speaking&Listening with: Are Japanese Homes Really Worthless After 30 Years?

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In North America, owning a home is an asset, it's an investment, everyone knows this.

In Japan, that's not necessarily the case.

Japan's population has peaked, is now in decline, and with a low birthrate and little immigration,

it's not set to change.

Housing prices are prominently a function of supply and demand, and every year, supply

increases, while demand doesn't.

The only logical way for prices to go is down.

And when you have homes in places where people no longer want to live, they get abandoned.

You might have heard that Japanese homes are worthless after 30 years.

The thing about that, is that you have to separate the building from the land.

It's the house on top of the land that's historically been worthless after about 30 years, not the land.

That's not to say that the land hasn't devalued.

It has.

Big time.

Since the peak of the bubble in the 90's, it's gone down significantly.

Housing markets are localized though, so while the Japanese countryside has seen land values

continue to fall, land values in the six major cities, especially Tokyo, has risen in recent years.

That's because while Japan's population is shrinking, Tokyo is still growing.

It's set to grow for a few more years before reversing and going down as well.

Now back to that house, the physical structure that is.

Why is the shelf-life only 30 years?

Right now, the average age of a demolished house is around 30 years old.

That number, however, doesn't include all the houses that are still standing, since

they haven't been demolished yet.

More importantly, that average age doesn't account for the new standards that have been

put into place over the decades and the quality of new homes built now.

It's somewhat similar to comparing the life expectancy of those born 100 years ago to

those born today.

If you were born in the early 1900's, you would have expected to live to about 50, whereas

babies today can expect to live to 80.

And who knows, with proper maintenance, maybe to 100.

That's all to say that the shelf-life of new-built houses is a lot higher than the current average

age of demolished houses.

Wood frame houses built today should last more like 60 or 70 years.

This then begs the question, why have Japanese houses up to now not lasted very long in comparison

to those built in North America or Europe?

Japanese houses were traditionally made of wood.

Bricks and earthquakes don't mix well, so you don't see brick homes in Japan like you

would in Europe.

So wood it was, but wood doesn't do well in fire.

Back in 1923, Tokyo was devastated by the Great Kanto Earthquake.

"The fires caused by the earthquake burned the city center to the ground.

Over 140,000 people were reported dead or missing, and 300,000 houses were destroyed."

Then there was world war 2 and the fire bombing of the city.

"Much of Tokyo had been laid waste by the bombings and by 1945 the population had fallen

to 3.49 million, half its level in 1940."

After the war, the country was quickly re-building, and creating top-notch housing was not the


Then in 1981, following a massive earthquake in Miyagi prefecture, earthquake standards

became more stringent.

This meant that any houses built before the new earthquake codes were not as valued as

those built after.

While old codes were meant to stand up to a tremor of 5 on the JMA Shindo scale, the

new building code revised it to withstand upper 6 or higher .

The new code, called shin-taishin underwent minor revisions in 2000 for wooden houses.

So every few decades or so in the 1900's, some major event has occurred that has necessitated

the rebuilding of housing stock.

On top of safety reasons, another contributing factor to the short-lived Japanese housing

is the fact that wooden houses, for tax purposes, completely lose all value after 22 years.

What are new-build Japanese houses like?

Many components are first built in a factory.

Now, it depends on the customization and quality of the house, but even low end homes have

the wood precut and then shipped to the location to be quickly assembled.

They do have insulation, and they do have double pane windows.

Because of the earthquake standards, the wood frames are bolted to the foundation and the

homes are structurally sound.

Since they're built of wood, the two big factors for longevity, besides earthquakes, are rot

and termites.

If well maintained and cared for, experts say the life span is double the current average

age of demolished houses.

What about all the homes that have been abandoned?

In certain parts of Japan, this is a major issue.

We know that the population is dwindling, and we know that homes built many decades

ago have lost all value, but why have abandoned homes been left standing, or rather, rotting

in place?

The simple reason is money.

The minute you bulldoze a house, your tax bill increases six-fold.

That's because land with a house on it only pays a sixth the taxes, and land used for

agriculture only pays a 1/3 of the taxes.

Not only does your tax bill increase, but you also get hit with the cost of demolition

What often happens is that a parent passes away, and the children don't know what to

do with the house.

Demolishing it will only cost money plus add to their tax burden.

Since no one wants to buy the land, the cheapest thing to do is to simply leave the house there.

In other situations, some people will pass away and have no relatives.

There are many homes for which the owners can't be found.

The national government has recently put into place a law that allow municipalities to coordinate

with the tax offices in order to both find and fine the owners.

The law allows the government to revoke the special tax treatment for homes if they are


If owners cannot be found, the city is then able to repurpose the land and building and

put it to better use.

The municipalities don't generally want to do this though, as the cost of bulldozing

is a drain on the coffers, something that is shrinking along with its tax base.

While abandoned homes are an issue in Japan, it's really more the countryside and the areas

that are not an easy commute to major cities where you'll find them.

Abandoned homes is part of the bigger issue of vacancy.

As of 2013, the vacancy rate sits at 13.5% nationwide, and it's only set to increase

as the population dwindles.

Interestingly, in the first quarter of 2017, 12.7% of housing units in the United States

were vacant.

I wouldn't have guessed it was so high!

But in Japan, 13.5% represents about 8.2 million homes, so that's a lot of empty homes.

Of those 8.2 million homes, 39% of them are abandoned.

Now those stats are for the whole of Japan.

So let's zero in to Tokyo, which still has a growing population.

Well, the prefecture of Tokyo has 817,000 vacant homes, which translates to a vacancy

rate of 11.1%.

Within the vacancy rate, there's also something else to be parsed from it.

If I walk around Tokyo, I don't actually see many houses that appear vacant, but if I look

at apaatos or manshons, I can visibly see unoccupied units.

The latest figures from 2016 show that 34% of rental units in the 23 special wards of

Tokyo are indeed empty.

That's a really high number, especially since this is the core of Japan, the core of the

Tokyo Metropolitan area.

Out of the 817,000 vacant homes, only 14%, or 114,300 are single detached houses (this

is out of a total of 2,207,000 single detached houses).

Since there are over 2 million single detached houses in Tokyo, that really means only about

5% of them are vacant.

So, me walking around the neighbourhood and not seeing many vacant homes, but seeing every

3rd of 4th unit of an apartment empty makes a lot of sense.

What have we learned here folks?

Japanese wood frame homes are built a lot better than they used to be, which should

mean double the shelf-life of the homes built decades ago.

Are the houses disposable?

I'd say not much more than any other wood frame houses built in the US or Canada.

The big issue with Japanese housing, rather, seems to be the ever increasing abandonment

rate, especially in the countryside.

What will happen to all these units, many of them which aren't in a state where it's

worthwhile to repair them?

How will the governments and people left behind deal with this?

This was supposed to be the end of the video, but I felt I had to address a few last points.

In Japan, the resale market is tiny.

While about 90% of home sales in the United States are for used homes, the opposite is

true in Japan, where it's only about 15%.

Is this because of the Shinto religion?

Portions of the Ise Grand Shrine, one of Shinto's most holiest sites, is rebuilt every 20 years.

This is part of the Shinto belief of the death and renewal of nature and the impermanence

of all things.

Does this apply to Japanese housing as well?

What people can agree on, is that up until now, homes haven't lasted very long before

being torn down.

Because people know this, maintaining a home wouldn't be as worthwhile as it would in Europe

or North America, since the resale market and value of used homes is minimal.

Personal anecdote time.

I bought a new home in Japan last year, but why didn't I buy a used one?

First off, the price difference between new and old wasn't that big.

This is largely because new homes can be built on smaller plots of land.

I like the layouts of new homes better, they are more energy efficient, they have new finishings,

they are built to the latest earthquake standards, and come with a 10 year warranty.

That's not to mention that it's easier to get a mortgage on a new home than an old one.

Ok, end of video.

I'm outta here.

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