A couple reasons that don't get much attention are that a.) newly-constructed houses are relatively cheap and b.) mortgage rates are very good.
A normal, custom-built house in the suburbs of Tokyo can be constructed for somewhere between $120,000 and $250,000 (source: I'm shopping for a house now) which, at the current Japanese mortgage rates for a 35-year loan, translates into a $400-$800 monthly payment for the home construction.
This is on top of what you have to pay for the value of the land itself, of course. But if you're already paying $300k-$500k for the lot, then why not just knock down the old building and put up your own, perfect-for-your-family, architect-designed, house?
Ha ha. Where I live a lot is about $50K, so I sometimes find it a bit strange that people build a $2-300K house instead of living in the one that was there.
But you are also right about the mortgages. Rates are super low and you can get 20 or 30 year terms. So for example even for a 25 year term, Shinsei bank is offering less than 2%: https://www.shinseibank.com/english/housing/loan_kinri.pdf
It's completely insane. I keep telling my wife we need buy a house just to lock into the nearly free money. On the other hand, if the bank thinks this is a good deal for them, they must be forseeing some pretty bad economy in the future...
The price is for the land, which can be quite expensive and can go up. The cost of demolition and building a new home is about USD200-300k for a very nice three bedroom home in a typical urban area. Credit is very cheap too. Also, people prefer new things in Japan. If you see a car that is more than a few years old, it will most likely be a mint-condition collectors item.
I'm in Kyushu. Seikisui houses cost 150-300k here on average. The house I personally want (saw at house demo place) is 750k. It's really nice!! In California that might buy a 3br in the outskirts of LA buy it won't be nice. The house I saw, in California would probably go for 1.5-3 mil in southern parts and much higher in SF.
The 750k model I saw was steel frame modular home, soon theory you could re-arrange it if you got bored of the layout - though I suspect that comes with a hefty cost.
It’s basically a large lot where all the major home builders set up their model homes and have detailed sales walkthroughs. Home builders in Japan are at an industrial scale with lots of economies of scale and modular parts, yet a surprising amount of customization is possible. Companies like Toyota and Mitsubishi have home divisions.
The most commonly cited reason is earthquake safety: the standards for construction are constantly increasing, and old homes are perceived as unsafe.
That said, the entire housing industry in Japan has formed around the idea that homes are disposable. Unless they're very old (e.g. traditional/antique machiya and farmhouses) or apartments in large complexes, they're not built to last. Detached houses built since WWII, in particular, are more expensive to repair than to rebuild. This is probably the real reason that used homes are viewed negatively.
I think that is the main reason. But also, people buy houses at different times of life in Japan. Often it's people nearing retirement, buying the "dream house". They want exactly what they want. It's a bit of a vicious circle, but people don't/can't do "starter homes" because you can't sell them.
Another common practice is to inherit your parent's or grandparent's house, knock it down and build a new one. So the same family will live in the same location for many generations, but they will rebuild the house in order to adapt to changing needs. I think this reflects the rapid rise in wealth in Japanese society. Before WWII, Japan was quite a poor country. From WWII onwards, Japan went from absolute poverty (where everything was flattened by the war) to the second largest economy on the planet (now, edged out by China for that honour). So every 20-30 years represented a major upgrade in housing.
I'm finding that in my area in the last 10 years used houses are getting slightly more popular. Certainly for me, when I eventually stop jetting back and forth between the UK and Japan I will buy a used house. A 20 year old house is still rated for a level 7 earthquake and I think they are perfectly good. I would say that at least 30% of my neighbours are over 60, so housing is going to be extremely easy to acquire (though still not a good investment).
People pay half a million dollars for 60 year old homes all the time in California, just as bad of an earthquake zone, yet these houses aren't worth half a million yen. Culture is a much bigger factor here -- I've never heard the phrase "used house" in the US. What I do hear is mid-century modern, arts and crafts, ranch-style.
As much as people living in California would like to believe that, it's not true. I was born in Chile, a place that's actually as equally-prone to earthquakes than Japan, and I've been living in California for about 8 years now. In here, I almost forgot what is like to feel an earthquake. In Chile/Japan is common to feel at least a magnitude 5 earthquake a couple of times a year (they are actually called "tremors"). California is in an unstable zone, but nothing compared to Chile/Japan.
Anecdotally, right before moving to SF, we had the 2010 earthquake[0] (8.8), I'm pretty sure with an earthquake like that in SF, there would be no city left behind.
CA quakes range under M7. while japan over M8 is relatively common.
also japan have snow and hot+humid summers. CA is mostly dry warm weather year around. timber will decay much, much faster in the former. if japan had low quality housing materials like used in CA, the houses would need to be redone every 10 years or less.
I lived in an old wooden house in Sanjo, in Niigata prefecture, for a while back in the 80s. It was a pre World War 2 house and didn't have any indoor plumbing, though it did have a nice smelling campground-style toilet on the first floor. You could stand outside and shake the corner of the house and hear all the windows rattling. It seemed pretty junky, but it withstood at least eight decades of earthquakes without falling down.
Also, I went to Sadogashima earlier this year. While there, we visited an entire town that was built in the 1600s. A couple of the homes had been turned into museums, but people were living in the rest of them, so there must be something to the way they build those old homes in Japan. I don't know if the same would be true of more modern houses though.
old code (pre-1980s) houses have poor resistance to MAJOR earthquakes. Their heavy roof tiles make them liable to collapse in major earthquakes (Kobe), which is a pretty nasty way to die
Comparing to California, which also has earthquakes, and nobody thinks twice about buying a used house. And it's not like they are built to be super-resilient either - it's mostly wooden planks, particle boards, sheet rock and stucco...
A normal, custom-built house in the suburbs of Tokyo can be constructed for somewhere between $120,000 and $250,000 (source: I'm shopping for a house now) which, at the current Japanese mortgage rates for a 35-year loan, translates into a $400-$800 monthly payment for the home construction.
This is on top of what you have to pay for the value of the land itself, of course. But if you're already paying $300k-$500k for the lot, then why not just knock down the old building and put up your own, perfect-for-your-family, architect-designed, house?