apologies but your analysis is misleading. you compare home prices change to investment in the stock market and conclude that since the stock market did better, it makes more sense to rent rather than buy property. that is simply misleading. 1st of all, people use mortgage rather than cash to purchase a home. to make a correct calculation, you need to perform a discounted cash flow analysis comparing two scenarios where one is rent and one is a purchase and input data such as amount of down payment, interest rate, home price, rent etc. the result will vary depending on a specific situation. in my case, I purchased a property last year in Tokyo. I made a zero down payment and my interest rate is less than 1%. if I was to rent, my monthly cost would be slightly above my current cost of ownership (mortgage + admin cost). therefore, the analysis you provided would not apply to me because I am saving money every month which allows me to purchase more stocks! not only that, I built equity in my home which has also increased in value since last year by reportedly 15%. I think my scenario is not too exceptional, so I believe if we really need to generalise it would be more truthful to say that for most people in Japan it makes more sense to actually buy a property... As long as they can obtain mortgage, and especially with zero money down.
Agree. In my case my monthly rent for a similar house would be almost 50% more than my current mortgage payment. I also have under 1% (fixed) rate so no matter what additional expenses I add to this, it’s much cheaper than renting.
Yeah these comparisons do not work or make sense. Especially since you're talking about Japanese RE, but comparing it to US stocks.
You conclude all of this with your typical globalist views of "own nothing and be happy" type of stuff.
Besides, that assuming that owning a home period is a bad idea is flat our retarded. Buying on market, full market value of any type of real estate is retarded.
Homes aren't assets, but owning land/bigger complex type of stuff for home ownership is the safest bet during any type of crisis or hardship as long as you put the land to work and become decentralized.
I think timing is everything as in most investments. I built a family house in Tokyo in 2003. I borrowed the funds against other assets and paid about 175bps over the cash rate. We lived in it for a couple years but ended up moving overseas and renting it out. For many years the price hardly moved but the rental yield was about 5%. At the time we bought the Nikkei index was 8,000. When I was in Tokyo this spring, the property agent estimated that the home had tripled in value. I was delighted until I realised that the Nikkei was +500% during the same period before including dividends. Still, I love that house and wouldn't mind spending my declining years in it.
Totally agree , now renting near one of Kanagawa beaches. The only worry is that in Japan it is hard to rent place when you are over 65, which I’m. This worry drives me to search for “my own home “, although financially this would be wrong…
apologies but your analysis is misleading. you compare home prices change to investment in the stock market and conclude that since the stock market did better, it makes more sense to rent rather than buy property. that is simply misleading. 1st of all, people use mortgage rather than cash to purchase a home. to make a correct calculation, you need to perform a discounted cash flow analysis comparing two scenarios where one is rent and one is a purchase and input data such as amount of down payment, interest rate, home price, rent etc. the result will vary depending on a specific situation. in my case, I purchased a property last year in Tokyo. I made a zero down payment and my interest rate is less than 1%. if I was to rent, my monthly cost would be slightly above my current cost of ownership (mortgage + admin cost). therefore, the analysis you provided would not apply to me because I am saving money every month which allows me to purchase more stocks! not only that, I built equity in my home which has also increased in value since last year by reportedly 15%. I think my scenario is not too exceptional, so I believe if we really need to generalise it would be more truthful to say that for most people in Japan it makes more sense to actually buy a property... As long as they can obtain mortgage, and especially with zero money down.
Agree. In my case my monthly rent for a similar house would be almost 50% more than my current mortgage payment. I also have under 1% (fixed) rate so no matter what additional expenses I add to this, it’s much cheaper than renting.
Yeah these comparisons do not work or make sense. Especially since you're talking about Japanese RE, but comparing it to US stocks.
You conclude all of this with your typical globalist views of "own nothing and be happy" type of stuff.
Besides, that assuming that owning a home period is a bad idea is flat our retarded. Buying on market, full market value of any type of real estate is retarded.
Homes aren't assets, but owning land/bigger complex type of stuff for home ownership is the safest bet during any type of crisis or hardship as long as you put the land to work and become decentralized.
Good stuff, Rei san
I think timing is everything as in most investments. I built a family house in Tokyo in 2003. I borrowed the funds against other assets and paid about 175bps over the cash rate. We lived in it for a couple years but ended up moving overseas and renting it out. For many years the price hardly moved but the rental yield was about 5%. At the time we bought the Nikkei index was 8,000. When I was in Tokyo this spring, the property agent estimated that the home had tripled in value. I was delighted until I realised that the Nikkei was +500% during the same period before including dividends. Still, I love that house and wouldn't mind spending my declining years in it.
Totally agree , now renting near one of Kanagawa beaches. The only worry is that in Japan it is hard to rent place when you are over 65, which I’m. This worry drives me to search for “my own home “, although financially this would be wrong…