Foreign Buyers Eye Japan's Cheap Empty Houses but Face Risks
Foreign Buyers Eye Japan's Cheap Empty Houses but Face Risks
While many parts of the world grapple with housing shortages, Japan stands out with a housing surplus. As of 2023, government data reveals that over 9 million properties, known as "akiyas" (empty houses), sit vacant across the country. Some are available for as little as $10,000, presenting what seems like a golden opportunity for buyers, especially those looking to renovate or repurpose these homes.
Japan's oversupply of housing is largely a result of its demographic challenges. With a record-low birth rate of just 1.2 births per woman, an aging population, and a greater number of deaths than births, many properties remain unoccupied. This trend has been compounded by urban migration; younger generations often leave rural areas for work opportunities in cities, leaving behind elderly populations who may pass away or lack the resources to maintain their homes. As a result, rural areas are increasingly populated by empty homes that eventually become akiyas.
Among Japanese residents, akiyas are often viewed as more of a burden than an asset. Even when family homes are inherited, the children of elderly parents frequently choose not to use or sell these properties, adding to the growing inventory of abandoned homes. Houses over 30 years old are generally regarded as "old" and are associated with safety issues, high renovation costs, and significant decay. Superstitions about bad luck or hauntings can also add to the stigma around these properties, making them less appealing to locals.
This unique situation, however, has caught the attention of foreign buyers. Over the past few years, there's been a notable increase in interest from overseas investors, fueled partly by the pandemic's impact on remote work and lifestyle shifts. Many international buyers, ranging from young investors to retirees, are considering Japan's akiyas for second homes, vacation properties, or renovation projects. Some see the low-cost akiyas as an entry point to a unique lifestyle opportunity that would be unaffordable in other global cities.
One investor, for example, was drawn to Japan's affordable real estate and has since acquired multiple akiyas. Through careful renovation and short-term rental arrangements, he's been able to turn these low-cost homes into a significant source of income. However, he stresses that understanding Japanese culture, language, and community dynamics is essential for long-term success. Foreign buyers who dive in without understanding the local context may find these homes more of a money pit than a good investment.
Experts agree that while akiyas can offer unique opportunities, they aren't ideal for all types of investors. High renovation costs and limited resale value can make these properties challenging for those seeking quick returns. DIY renovators, hobbyists, or buyers looking for a quiet retreat are often best suited for akiya purchases, given the scale and potential complexity of needed repairs. For larger institutional investors or those hoping to scale their investments quickly, the limited resale potential and labor-intensive renovation requirements may make akiyas less appealing.
Navigating the purchase process can also be tricky for international buyers. Language barriers, complex local regulations, and coordination with municipal authorities all add to the hurdles of owning property in Japan, with experts advising that anyone considering buying an akiya should be prepared for the potential costs, particularly if extensive structural repairs are necessary.
