Houses lose value by depreciation. In few decades the value is zero, then becomes negative - the price of demolition for the next project.
What gains value over time is land. Poeple only think they invest in houses, but they are fooling themselves and overspend on the construction and interiors. They pay for land.
Easy to prove - construction material and labor are highly mobile. Cement, bricks and imported labor costs the same in New York as in middle of nowhere. The price differs only by transportation costs and temporary lodging of workers. The real difference comes from 1. price of land 2. bribes for construction permits of a respective town. In other words - location is what you pay for.
What gains value over time is land. Poeple only think they invest in houses, but they are fooling themselves and overspend on the construction and interiors. They pay for land.
Easy to prove - construction material and labor are highly mobile. Cement, bricks and imported labor costs the same in New York as in middle of nowhere. The price differs only by transportation costs and temporary lodging of workers. The real difference comes from 1. price of land 2. bribes for construction permits of a respective town. In other words - location is what you pay for.
In Japan, this is more explicit. House value drops to zero in 30 years. https://www.theguardian.com/cities/2017/nov/16/japan-reusabl...