The phenomenon of depopulated homes, which also has deep roots in the depopulation of rural areas, is repeated in many parts of the planet. This type of housing in Japan is called Akiya, and we have talked many times about the problem of the country’s housing crisis: at least nine million are vacant. The causes are a breeding ground where demographics, culture and economics mix. But still Japan being “that” attractive and unknown place for many foreigners, what if you decided to buy an Akiya? There are compelling reasons to think twice.

Akiya. As we said, according to calculations made last summer, there are nearly nine million empty houses across the country. The figure is surprising for several reasons. The most important and obvious one is that 13.8% of all homes in Japan are way, way too many. To give us an idea, if we assume three people could live in each of these houses, it would be enough to house almost the entire population of, say, Australia. Moreover, the Nomura Institute has produced its own calculations and estimates that there are actually almost 11 million akiya, which could account for more than 30% within a decade.

Why are there so many ghost houses? As for the reason, akiya is mostly explained by Japan’s demographic crisis. The country is losing population. And it also gets old. Both trends go hand in hand and explain a disproportionate number of vacant and abandoned homes. Properties become vacant after tenants die or pack up their belongings to move into a property. There are estimates that say about 53 million people will live in Japan by the end of this century; this figure will be less than half of 2017’s 128 million.

As if this were not enough, the migration of young people to cities in search of work left many rural areas desolate and increased the number of empty houses in the hands of the aging population who cannot make ends meet. Moreover, these empty houses are often seen as a “burden” by the local people. Many property heirs in Japan choose not to use or sell a house that is more than 30 years old because it is perceived as “old”. This is due to safety concerns, renovation costs, and superstitions that some people believe may be cursed.

“Cheap” house opportunity. There are some Akiyas selling for as low as $10,000 on Japan’s real estate market. This situation and the abundance of this type of houses seem to have attracted the attention of international buyers and investors. It seems that factors like the pandemic and the rise of remote working also come into play here, motivating both investors and foreigners looking for second homes to explore the opportunities of those abandoned houses in the postcard image we have of Japan. .

In this context, Tetsuya Kaneko, director of research and consulting at Savills Japan, told CNBC that foreign interest has increased significantly recently, with an increasing number of people looking for properties for work, holidays, renovation projects and even retirement.

A case. For example, that of Anton Wormann, a Swede who moved to Japan in 2018 after falling in love with the country during a business trip. The man has purchased as many as seven “akiyas” in six years and currently works as a content creator and real estate investor.

His buy-and-renovate strategy allowed him to generate up to $11,000 per month in short-term rentals after investing about $110,000 in his properties. However, he attributes this success to the fact that he took the time to understand the culture, language and build relationships in the local community.

Think twice. However, as we said at the beginning, there is a compelling reason not to jump at the first offer we see. In fact, this is the reason why the Japanese avoided such a “cheap” offer. While these properties offer opportunities for those looking for quiet retreats or renovation projects, they also come with additional risks and costs.

In this context, Wormann explains that to be successful, it is essential to establish a local network and adapt to Japanese traditions. “You can’t invest blindly and without understanding how Japan works, because you’ll end up losing money,” he says.

A complex renovation. “akiyas” can be a good investment for those who have experience in renovation and want a long-term project. But Kaneko warns that these properties are not ideal for investors looking for quick or large-scale returns. High renovation costs may exceed resale value in some areas, especially if the property needs structural repairs. Additionally, the language barrier and the complexity of the Japanese legal system can also pose major obstacles for foreign buyers.

Moreover, as we explained a few months ago, there is an inherent risk in such old structures. Since we are talking about properties that have not been maintained for a long time, these homes also pose serious security risks. In fact, one study pointed out the possibility of earthquake, landslide or collapse in extreme weather conditions as examples.

Find the “owner”. Even if someone wants to take possession of an akiya, renovate it, demolish it and build a new one on its foundation, in most cases it becomes impossible to find the owner. There are many cases where grandchildren do not live in the area because they moved or no one could find them. At this point, the cluster of empty houses forms those “ghost towns” that terrify young families in Japan’s rural prefectures.

Solution. Investing in “akiyas” in Japan presents both opportunities and challenges, and even more than a few. Although these properties are an affordable alternative to other global real estate markets, adapting to local culture and regulations requires a significant investment in time, money and effort.

For those who want to dedicate and immerse themselves in Japanese life, akiyas can be a profitable home or a unique haven for life. However, before embarking on purchasing a “house in Japan”, it becomes clear that it is vital to fully understand the costs and risks involved, especially in terms of restoration and the demographic context that drives the empty house phenomenon in the country.

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