Japan’s Huge Supply of Empty Homes Is Attracting Foreign Buyers. One Thing to Note: Even the Japanese Don’t Want Them

The trend of empty houses, deeply rooted in the depopulation of rural areas, is seen in many parts of the world. In Japan, these homes are called akiya. The country has at least nine million empty houses, a result of demographics, culture and economics. However, Japan remains an attractive and intriguing destination for many foreigners. If you consider buying one of these homes, there are compelling reasons to think twice.

Akiya. According to estimates from last summer, there are about nine million empty homes across Japan. This number is surprising for several reasons. First of all, it means that 13.8% of all homes in Japan are empty. If three people lived in each of these houses, they would be enough to house almost Australia’s entire population. Moreover, according to The Guardian, the Nomura Research Institute has calculated that nearly 11 million houses are abandoned and that in a decade, they could account for more than 30% of the total amount of homes in the country.

Why are there so many ghost houses? Akiya are mainly a consequence of Japan’s demographic crisis. The country is experiencing population decline and aging, which go hand in hand and explain the disproportionate number of empty and abandoned houses. Properties remain vacant after elderly tenants pass away or move to nursing homes. Estimates suggest that by the end of this century, about 53 million people will live in Japan, down from 128 million in 2017.

In addition, the migration of young people to cities in search of work has left many rural areas without residents, increasing the number of empty houses. These homes are often held by an aging population unable to maintain them, and many residents view them as a “burden.” In Japan, real estate investors frequently avoid properties over 30 years old, viewing them as “old” due to concerns about safety, renovation costs, and superstition, as some believe such houses might be cursed.

A “cheap” house opportunity. Some akiya properties in Japan’s real estate market sell for as little as $10,000, an attractive entry point for international buyers and investors. The abundance of these homes, along with factors like the pandemic and the rise of remote work, has spurred interest from foreigners, including investors and second-home seekers drawn to Japan’s scenic rural areas.

In this regard, Tetsuya Kaneko, director of research and consulting at Savills Japan, told CNBC that foreign interest has risen significantly, with more buyers seeking properties for business, vacation, renovation projects, and retirement.

Case in point. According to CNBC, Anton Wormann, a Swede who moved to Japan in 2018 after a business trip sparked his interest in the country, has purchased seven akiya homes in six years. Now a content creator and real estate investor, Wormann employs a buy-and-renovate strategy, earning up to $11,000 per month in short-term rentals after investing around $110,000 in his properties. He attributes his success to learning the language, understanding the culture, and building relationships in the local community.

Think twice before buying an abandoned house. While abandoned homes in Japan may seem like a “bargain,” there’s a reason many Japanese avoid these properties. For those seeking a quiet retreat or a renovation project, these houses offer opportunities—but they also come with significant risks and hidden costs.

Wormann emphasizes the importance of building local connections and adapting to Japanese customs. “You cannot come without understanding the culture, without understanding how Japan works, and just throw money at it because that would be a little bit of a money pit,” he says.

Challenges of renovation. For buyers with renovation experience and a long-term outlook, akiya properties can be worthwhile investments. However, the Savills Japan director cautions that these homes aren’t ideal for investors seeking quick or substantial returns. High renovation costs—especially for structural repairs—can outweigh resale values in some areas. Additionally, the language barrier and the complex Japanese legal system pose challenges for foreign buyers.

Older akiya homes also carry inherent safety risks due to years of neglect. Studies indicate that these properties may be vulnerable to collapse during earthquakes, landslides, or extreme weather conditions.

Finding the “owner.” Even if a buyer wants to renovate or rebuild on an akiya property, locating the owner can be difficult. Often, descendants live far from the area or cannot be located. This has contributed to Japan’s rural “ghost towns,” where abandoned homes deter young families from settling.

The bottom line. Investing in akiyas in Japan offers both opportunities and challenges. While they may be a cost-effective alternative to other real estate markets, they demand significant time, money, and a commitment to understanding local customs and regulations.

For those ready to immerse themselves in Japanese life, an akiya can become a profitable venture or a unique retreat. However, it’s essential to understand the costs, risks, and demographic factors driving Japan’s empty home phenomenon before diving into a property purchase.

Image | TANAKA Juuyoh (PXHere)

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