As Japan faces an aging population and the headache of abandoned homes, a new law is a band-aid while interest by foreigners could be the ultimate solution.
On the All Akiyas website (allakiyas.com), an empty two-story home in Japan’s Nagano Prefecture, located 107 miles (172 kilometers) from Tokyo, offers 149 square meters of space, nearly 650 square meters of land, modern conveniences, and a parking garage.
The price for this newly renovated abode? About 4 million yen, or a little over 27,000 dollars.
“Akiya” is a Japanese word meaning “empty home,” and according to the most recent internal affairs ministry survey, Japan had nearly eight and a half million such homes in 2018, representing 13.6 percent of all housing in the country. The number was up by about 1.5 times from 5.76 million in 1998.
There are various reasons why so many vacant homes in Japan remain that way. For starters, the Japanese tend to look for newer homes to buy. Some don’t want to part with homes that hold precious memories or sell because of financial complications in the inheritance system. Others don’t want to keep the properties of deceased relatives for financial or reasons of upkeep.
Currently, the base for the real estate tax is one-sixth of a property’s assessed value, even when the house value is close to zero.
Such homes are only expected to increase after 2025 as the baby boomer generation, born between the ages of 1947 and 1949, reaches the age of 75 or older and decides to compact their lifestyle. Juwai IQI, a property technology firm, even predicts that by the year 2033, one in three homes in Japan will be empty.
Vacant homes in Japan, a potential opportunity for foreigners
Foreigners who move to or live in Japan could potentially be one solution to the akiya issue. According to just-released government data by the Immigration Services Agency, 3,200,000 foreigners live in Japan, a country of 122 million people, which is up 150,000 from the end of December 2022. This marks the highest number of foreign nationals ever living in the country. By nationality, China has the most citizens living in Japan, followed by Vietnam and South Korea.
As foreigners generally don’t have issues with empty homes, the low prices and availability of akiya could prove to be positive. Anton Wormann, a Swedish expat model in his thirties who is currently living in Japan, recently gained over half a million subscribers to his YouTube channel by showing how he purchased and renovated a home in Tokyo for 10 million yen (69,000 dollars). The 90-square-meter home had been vacant for so long that the owners were surprised he was interested, and pleasantly shocked when they saw how he transformed their former home.
“In Japan, ‘new houses’ are preferred,” he said. “Maybe they are needed to get the economy going, but the way of thinking is limiting the options. Breaking down preconceived notions, such as ‘a vacant house doesn’t look good’ or ‘it won’t sell anyway,’ might be a step toward solving the vacant house problem,” Mr. Wormann told Japanese daily Asahi Shinbun during an interview.
Another way of tackling the akiya issue took effect this past December when a revised vacant houses special measures law was implemented. The amendment’s biggest change is expanding the situations in which the real estate tax reduction does not apply.
For example, a mayor could advise a homeowner of a “specified empty house” that has also not been maintained to take appropriate measures. If the owner does not follow the instructions, the mayor can issue a warning. At that point, a tax reduction becomes inapplicable. It also enables mayors to request courts to appoint an administrator when a homeowner has died.
Encouraging maintenance of properties
Under the old law, called the “Act on Promotion of Special Measures against Empty Houses,” mayors could warn owners to act if their home was deemed to be a safety hazard or eyesore. If the owner doesn’t respond, a home could be demolished, fines assessed, and tax credit could be lost. The new law enhances the measures.
The aim is to encourage owners to promptly provide maintenance on their properties, preventing them from collapsing due to neglect by implementing a tax increase. The revised law has also relaxed regulations, making it easier to transform their home into something else, like a cafe. The land ministry has set criteria to determine what a shoddy unoccupied home looks like, including judgments on safety, hygiene, and appearance. Many municipalities are expected to survey and provide guidance to homeowners this year.
According to the Asahi Shimbun, the Hitachinaka city government in Ibaraki Prefecture has already been implementing this initiative since 2016 at their own expense. Officials visit abandoned homes and give a score based on such criteria as overgrowth, littering, house damage, and more. If a property reaches a certain score, it’s considered to be “poorly managed.” Thirty-nine homes were considered to be poorly managed between 2016 and 2022. At that point, the city government encourages owners to make home improvements.
The government also offers money to urban families willing to relocate to rural areas.
But if Japanese homeowners still decide to leave their homes abandoned, there could be a steady increase in foreign buyers who are eyeing the market, helped by the lowest value of the yen in 50 years.
Market prices have increased for the most sought-after areas, leading to cascading negative effects on the local population. But the price of homes in cities like Tokyo, Yokohama, Osaka, and Fukuoka ranges from 180,000 to 630,000 dollars, whereas they are nearly double that in several other Pan-Asian cities. Well-off foreigners from Asia and beyond who can afford to buy can look at a Japanese home as a good investment.
“One of the common reasons Hong Kong buyers purchase abandoned homes is to operate them as vacation properties for Airbnb,” said Kazuaki Nebu, country head of property company IQI Japan, during an interview with the South China Morning Post last year. “They can reside in a beautiful part of Japan in a traditional house and earn income from visitors. It’s the fulfillment of a dream for many.”
