[ktothemc]

It really depends on how your country treats housing. Is it a consumable good or an investable asset? If your country conflates the role of housing as shelter with it being a primary store of wealth, then demand doesn't just reflect demand for housing. It reflects demand for a safe, appreciable asset in a ZIRP world, which is what urban housing becomes because cities will never be able to physically scale their infrastructure or capacity as rapidly as capital can move through their property values.

Not only has Vancouver built a lot, it simultaneously cultivated immigration programs to bring external capital into the local housing market. http://www.tandfonline.com/doi/abs/10.1080/14616718.2015.111...

Other countries, like Japan & Germany, treat housing as a consumable good or even something that depreciates. So even though Tokyo is one of the most developed cities in the world, housing actually goes down in value. http://freakonomics.com/2014/02/26/why-are-japanese-homes-di...

[kazinator]

> Other countries, like Japan & Germany, treat housing as a consumable good or even something that depreciates.

Vancouver isn't a country. The country is Canada, and Canada has places where your real estate will depreciate, like somewhere in the middle of Saskatchewan. How properties value over time is determined by the market conditions. Neither Canada, nor Germany nor Japan are communist states which flat-out dictate your property value.

The values of the buildings on a property themselves depreciate as they age, everywhere in the world. Nobody will pay as much for a run-down place that needs demolition as for a newly built or renovated, "move in condition" place. That doesn't matter so much if the property is valued 10:1 or more over the structures on it.

Tokyo is an ambiguous term because it simultaneously refers to a metropolitan area in which some 37 million people live, which spreads far beyond the city, and the property market prices and dynamics differ.

Japan as a whole went through general deflation through the 1990's and early 2000's and it may be returning. Its population has also been shrinking.