Japan is experiencing an oversupply of housing. According to data provided by the government, Japan had more than 9 million vacant homes by the year 2023, with some of these properties selling for less than $10,000.
There is a one-of-a-kind opportunity for buyers with inventive concepts because these homes, which have frequently been abandoned and left empty for decades, are scattered across major cities and rural areas.
These vacant, abandoned homes, which are commonly referred to as “akiyas,” are increasing in number in Japan. This is largely due to a population crisis, as the country’s fertility rate will fall to a record low of 1.2 births per woman by 2023.
While Japan’s elderly population continues to grow, death rates have surpassed birth rates.
According to Savills Japan, the problem of empty and abandoned homes has existed for decades and is rooted in Japan’s post-war economic boom, which prompted an increase in housing construction.
According to Savills, Japan’s economic slowdown in the 1990s made the problem worse, and ongoing demographic shifts have made it even worse.
Another significant factor in Japan’s abandoned homes is urban migration. Rural areas are left with aging populations who may pass away or be unable to maintain their homes as younger generations move to cities for work.
When elderly parents pass away and their children inherit family homes, many times the heirs are reluctant to personally use or sell the property, which means more abandoned homes are added to the market.
A home older than 30 years is also considered to be old. It’s interesting to note that some people even believe these homes are associated with superstition, “believing they might be haunted or bring bad luck.”
According to Michael, the founder of the Japan real estate blog Cheap Houses Japan, many Japanese people ultimately view akiya as depreciating items that are more trouble than they are worth.
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Attracting foreign buyers Japan’s ‘akiyas’ are attracting foreign buyers’ attention.
A rise in ‘akiya’ purchases and interest has been observed.
The pandemic, trends in remote work, and shifting lifestyle preferences have all contributed to this increase in foreign interest in Japanese real estate.
More and more people are looking for second homes, vacation homes, or projects for renovation, from young investors to retirees looking for a place to retreat.
Akiyas can be a good investment for some people, especially hobbyists, DIY renovators, and people who want a quiet getaway in the country.
Due to the high costs of renovation and limited resale potential in some areas, they may not be suitable for institutional investors or those seeking immediate or substantial returns.
Consider that the home-buying process can be complicated due to the language barrier and the need to navigate local authorities. It is important to anticipate that costs can be substantial, particularly if the house requires significant structural work.
