The Akiya phenomenon in Japan, the disproportionate number of vacant and abandoned houses (currently about 9 million) emerging as the common thread of the country’s demographic crisis, is not new, but an abnormal situation is occurring in the Japanese real. real estate market. House prices are increasing and many are taking the opportunity to buy Akiya. Problem: “Cheap” can be expensive.

I want an Akiya. Rising housing prices in Japan have apparently increased demand for these abandoned houses, an “affordable” option that is becoming increasingly popular among buyers. And most importantly, buying akiya attracted the attention of especially young people and families with limited budgets.

In many cases, properties with minimal renovations and sold for half the price of a new home, or even given free in exchange for maintenance, have become a very attractive option for buyers looking to save money. In fact, the Japanese government encourages the use of these houses to prevent their demolition and revitalize areas affected by depopulation and abandonment.

Akiyas companies and management. In parallel with this demand, companies such as Katitas are also leading the abandoned house market. Katitas, for example, buys vacant properties, renovates them while preserving as much of their original elements as possible, and sells them for an average price of 16 million yuan (about $106,500) including land, about half the cost of a new home.

Thanks to this type of approach to creative renovations, such as changing plans and adding parking, Katitas sold 5,535 homes in the fiscal year that ended in March; this was almost double the figure it achieved a decade ago.

“Spread the akiyas.” Another major player are companies like Zero Estate, which connect akiya owners who want to get rid of their properties for free with people interested in buying them. These “zero-new properties” are transferred with administrative support for a fee.

Apparently, the contract closing rate has reached 80%, even though most of these homes are in very poor condition. Additionally, local initiatives such as the Kamiichi City program in Toyama Prefecture offer subsidies to facilitate the “zero” purchase of these properties.

The problem with buying Akiya. However, the increased demand for these abandoned houses has also introduced a number of risks, especially regarding the many hidden defects that are sometimes invisible. Between 2020 and 2022, the Housing Renovation and Dispute Resolution Center received an average of 690 inquiries per year regarding issues such as leaks or faulty drainage systems, all of which were identified after the purchase of one of these homes.

In this regard, Wataru Tochigi, director of the NPO Japanese Association of Housing Inspectors, warned that buyers should be proactive in investigating the condition of properties before signing a purchase contract. Thorough inspections can help prevent unpleasant surprises and make for a safer investment.

A complex renovation. We’ve said it before. While these properties offer opportunities for those looking for a quiet retreat, affordable home or renovation project, they also come with additional risks and costs. Experts warn that these properties often require high renovation costs, especially if the property needs structural repairs, and can far exceed resale value in some areas.

But there is more, 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.

The government is helping. There are approximately 9 million abandoned houses in Japan. Therefore, the government has taken measures to reduce risks and promote responsible use of such properties. Like? Promoting the proper management and marketing of akiya through the amendment to the law on special measures for abandoned houses, which comes into force in 2023, which provides for the removal of tax deductions for poorly managed properties, the obligation to register inherited properties to prevent their abandonment, and the increase of maximum brokerage fees.

Essentially, it is a market whose rise does not stop. The second-hand home resale market has grown every year, reaching 41,000 transactions in 2022, according to the Yano Research Institute. Additionally, this number is expected to increase by another 20% by 2030.

Therefore, the lack of mandatory regulations on preliminary inspections remains a problem, especially for buyers (it can be carried out “privately”, but is not binding).

Image | 王綉敏

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