Purchasing a mansion in Tokyo

Hi,
Like the title says, I'm currently considering purchasing a mansion in Tokyo. I have no such experience before, so I'm not clear about a few things..
I've been reading around, and I get the idea that mansions in Japan only lasts for 25-30 years. Is this still true today, or does it only apply to older mansions? Also, after that "expiration date", most mansions get demolished and rebuilt. What happens to the ownership then? Are we entitled to some piece of the land with the mansion purchase?
I also get the idea that people dont seem to consider buying mansions as an investment here. Is this true only because of the stale japanese economy until now, or it's just that difficult to resell used mansions here?

Thanks in advance!

Zaobz,

I've been reading around, and I get the idea that mansions in Japan only lasts for 25-30 years. Is this still true today, or does it only apply to older mansions?

You are referring to Japanese "manshons" (condominiums), right? I think 30-40 years is probably a reasonable ballpark figure.

Also, after that "expiration date", most mansions get demolished and rebuilt. What happens to the ownership then? Are we entitled to some piece of the land with the mansion purchase?

If you are an owner, then you own a percentage of the land on which the building stands, and thus have voting rights on what happens to the building at the various stages of its life. You would have to pay to have the building demolished and then rebuilt, although I think it is common for such work to be paid for at least partially by the fund built up over the years from resident association payments.

I also get the idea that people dont seem to consider buying mansions as an investment here. Is this true only because of the stale japanese economy until now, or it's just that difficult to resell used mansions here?

Correct. The value of all housing in Japan plummets from the day you buy it, so purchasing property is generally not considered an investment.

Dave: isn't it the same as in North America, even for houses? the house itself depreciate, especially those built in plywood, but the land value increase. Just around the corner from my building --in Canada--a house from the 1950s, plain but sturdy, sold for around $ 600 000 early this year. The new owners tore it down and are building a new strange looking one (basically a one story bungalow with a 2 stories high roof). As for condos buildings, what happen sometimes is that the owners, rather than tearing down the place and rebuilding it, sell it to a builder. Each owner get a portion of the sale price based on the size of his/her place. Does that happen also in Japan?

Thank you for the quick reply! That clears things up a lot for me. I guess my question really applies to buying property in any country :) I wish I have had more experience before.
Do you have any links on articles or websites that you find particularly helpful on this topic?

Buying manshon was indeed great investment in Japan in the so-called "bubble economy" period of the 1980s. However, due to the collapse of this huge economic period (bubble no houkai), tons of people ended up either stuck with an aging manshon or 10 millions yen worth of loan. We bought a manshon (not for investment) in 1990 and when our family grew out of it in 2003, the price we sold it for was about 1/3 of the original price. This is the typical situation.

As for how many years a home lasts, you have to understand the modern Japanese way of living. The modern Japanese don't D.I.Y. Most people prefer to buy a brand new home that don't need fixing or carpeting, they plan a 35 year loan, and by the time they're done paying it the home would be worn out and they would want to move to another new place with better plumming.

In fact, it's only been half a century since the modern Western type homes became common. Therefore, western type housing is still becoming better and better everyday with newer technology fit for the Japnese climate and lifestyle. And now that traditional houses are becoming trendy again, architects are beginning to make traditional type homes with the comfort of Western technology. So it's quite practical to move in to newer homes, although "reform" of older homes is becoming popular as well.

Also, suppose you buy a home at age 30. A spacy place with a little balcony or garden for your kids to play. Your home starts to wear out by the time you reach age 60. Then you yourself starts wearing out too, due to age. In the past, grown children came back to live and take care of aged parents, but in modern days this is not so common any more. Both children and parents seek freedom and independance. So a lot of aged parents prefer to move into a smaller place where cleaning the tending house is easier. And they would sell the old home to help the down payment for the new one.

It's been only about a year since the Prime Minister started talking about housing that would last for about 100 or 200 years.

Uco raise very good points.I forgot to mention that Toyota makes prefabricated homes that are also custom made and should--as all quality prefab--last for a long while.have a look at http://www.toyotahome.co.jp/ownersplan/index.html
You can get a translated version but it is in a very strange google english. These Toyoto homes are very interesting. I have visited and lived -on holidays only- a couple of these places and they look really good.

BTW,eventhough I believe there is a regulation that buildings must be able to stand a magnitude 6 earthquake here, I think risk of earthquake will be a huge factor for buying properties in Japan. (And the rumors of big earthquake coming soon to kanto area)
Is there any special insurance in case of earthquakes, or is it just going to be an "act of god"?
What are your opinions on this?

zobz I live in Canada, on the Pacific side of North America, and we have regular earthquakes too. None destructive so far, but it could happen anytime, as it happened in the US a few hours drive away not that many years back. I have earthquake insurance and it doesn't cost much. Of course if the big one ever happen the insurance companies will likely refuse to pay or pay the bare minimum and ask the government for help.

Insurance that cover earthquake damage is available in Japan, and with all the earthquakes we've had, plenty of buildings have survived. Also builders have been learning from past earthquakes, so houses and manshons as well as wooden apartments are supposed to be getting safer and safer.