Seems like it's a self-reinforcing cycle: houses are built lower quality, people thus don't value older houses, so builders build lower quality to lower "new" cost
I admire the Japanese presence for building new because it means that the owners build the house they want rather than build for what the imaginary buyer 20 years in the future would want. So many people here in the states have nonsense houses for their family situation because their eye is incessantly on resale appreciation value.
With few exceptions, houses are a depreciating asset just about everywhere; it's only land that appreciates. Japan is no different except that the depreciation rate of the house may be somewhat faster, and appreciation of the land significantly slower than in other countries.
I'm not sure this is accurate. I purchased my house in 2004, and it's currently valued at $349K (purchase price $199K). The lot itself sold for $40K in 2003.
Looking at available lots in my neighborhood, they average about $70K for my house size. So that means my house itself is valued at $280K.
So yes, the land has appreciated by $30K (over 18 years), but the house itself has appreciated $120K in the same timeframe. The land appreciated at roughly 3% per annum, while the house appreciated at roughly the same rate.
Of course this doesn't include any improvements, or maintenance costs associated with the house.
By "improvements" do you mean sewer hookups and so on? Japan is no different in that those add value, and they don't redo them when rebuilding the house (barring some problem).
Also, depreciation of the house includes things like maintenance costs -- did you spend money on your roof? Redo the wiring? Renovate the kitchen? Unless they're intended as a teardown, old houses are often sold post-renovation, and that investment can counter the depreciation but won't show up if you just compare the selling price against the price of the bare lot.
Lastly, it sounds like if your lot is $70k and houses are $350k, maybe construction costs have gone up a lot in your area since 2004. That could cause an old house to appreciate by increasing the cost of new houses.
By improvements, I meant things like finishing out a basement (thus adding more usable sq footage), kitchen/bath remodels, decks etc.
Maintenance, at least in my area isn't a large cost over the life of a house. In the last year we've replaced a roof ($8K), furnace/AC ($9K), and the water heater ($800). The water heater we've had to replace twice before, so in total we've had roughly $20K in maintenance costs since we purchased the house. We're getting to a point where we need to repaint both inside and out, and replace some carpet. Probably around another $10K for that. So $30k in maintenance over 18 years is pretty small potatoes.
I don't know that construction costs have gone up much more than the inflation rate; I do know that material costs have gone up in the last 18 months, but that should drop back down to "normal" in another year or so.
So would your house sell at a premium relative to a buying the land and having a new house built? If so, it's definitely appreciated, but that sounds like a very uncommon scenario!
It's hard to say. I don't know the permitting costs in my city, nor the costs for water/sewer hookups either. My house is nice, but nothing special for the area. Assuming a $125/sqft cost, a house like mine would be around $225K plus the lot ($70K) for a total of $295K. The only thing I've seen that might have helped the house appreciation is the completion of an elementary school in our neighborhood.
This would be generally true in Australia. Land value for 700sqm where I live is $700k. An older character house or luxury/new build would add value, but almost anything else would have minimal value. A house on a typical block seems to rise in value faster than a unit (say, one of 6-8 on a block) where land is a smaller part of its valuation and redevelopment potential is wrapped up with the wider group.
