Japan’s reality market is a terrible comparison. They approach housing completely differently. Modern housing is treated as temporary, only expected to last for a couple generations before being demoed and rebuilt. As a result of this, their houses hold little value, maybe 10% of the equivalent property value in the US.
What that has to do with anything? The claim is that as population shrinks there’s higher supply so prices will fall. Japan shows that shrinking population doesn’t lead to increased supply. The way houses are build doesn’t matter. The surplus should still be there.
My guess is the same will happen in US. There will be more old, empty houses no one wants to buy and renovate (because there will be no demand for it) but new houses will stay expensive.
A population can shrink and the housing market can still suck, because it depends where the population loss happens. I can imagine that we are seeing a centralization to the big metropolitan areas, so the rural areas are dying out, but the metropolitan areas keep growing because people from rural areas keep moving to the big cities cos in rural areas ever fewer jobs are to be found. And I am pretty sure we this in a lot of countries, not just Japan.
Japan’s reality market is a terrible comparison. They approach housing completely differently. Modern housing is treated as temporary, only expected to last for a couple generations before being demoed and rebuilt. As a result of this, their houses hold little value, maybe 10% of the equivalent property value in the US.
What that has to do with anything? The claim is that as population shrinks there’s higher supply so prices will fall. Japan shows that shrinking population doesn’t lead to increased supply. The way houses are build doesn’t matter. The surplus should still be there.
My guess is the same will happen in US. There will be more old, empty houses no one wants to buy and renovate (because there will be no demand for it) but new houses will stay expensive.
A population can shrink and the housing market can still suck, because it depends where the population loss happens. I can imagine that we are seeing a centralization to the big metropolitan areas, so the rural areas are dying out, but the metropolitan areas keep growing because people from rural areas keep moving to the big cities cos in rural areas ever fewer jobs are to be found. And I am pretty sure we this in a lot of countries, not just Japan.