Japan is grappling with a unique real estate phenomenon: a surplus of abandoned houses, known as “akiyas,” numbering over 9 million as of 2023. While much of the world faces housing shortages, Japan’s shrinking population and shifting demographics have created a market brimming with affordable properties, some selling for under $10,000. This presents a compelling, albeit complex, opportunity for savvy investors and those seeking a unique lifestyle change, but it’s not without its challenges.
Key Takeaways: Japan’s Akiya Market
- Over 9 million akiyas (empty houses) exist in Japan, creating a significant real estate surplus.
- Prices are exceptionally low, with some properties available for under $10,000, attracting foreign buyers.
- Japan’s declining birth rate and aging population are primary drivers of the akiya phenomenon.
- Renovation costs and cultural nuances pose significant challenges for potential investors.
- Foreign investment is rising, driven by remote work trends and a desire for unique properties.
Japan’s “Akiyas”: A Demographic Time Bomb
The sheer number of akiyas—abandoned houses—in Japan reflects a deeper societal shift. Japan’s fertility rate has plummeted to a record low of 1.2 births per woman, while death rates exceed birth rates. This, combined with urban migration, leaves rural areas with aging populations and an increasing number of unmaintained properties. Tetsuya Kaneko, head of research and consultancy at Savills Japan, explains: “The akiya problem has been building for decades, rooted in Japan’s post-war economic boom…The issue became more pronounced in the 1990s with Japan’s economic slowdown, and has worsened with ongoing demographic changes.” Many akiyas are stigmatized, perceived as a burden, and often passed down through families who are unwilling or unable to manage them. The age of the properties also plays a role; a house over 30 years old is considered old, raising concerns about safety, renovation costs, and even superstition.
The Social Stigma of Akiyas
The social perception of akiyas significantly impacts the market. Michael, founder of the real estate blog Cheap Houses Japan, highlights that “many Japanese look at akiya as depreciating items that are more trouble than they’re worth.” This sentiment, coupled with the potential for high renovation costs and the often-undesirable locations of these properties, contributes to their low sale prices.
Attracting Foreign Buyers: A New Wave of Interest
Despite the challenges, Japan’s akiyas are attracting increasing attention from international buyers. Kaneko notes a “rising trend in inquiries from abroad… There has been an increase in interest and purchases of akiyas.” This surge is partly attributed to the pandemic, the rise of remote work, and changing lifestyle preferences. Buyers range from young investors to retirees seeking a tranquil retreat, all drawn by the opportunity to acquire property at exceptionally low prices.
A Case Study: Anton Wormann’s Success
Anton Wormann, a 32-year-old content creator and real estate investor, exemplifies this trend. Having lived and worked across the globe, he found the cost of property prohibitive in major cities. “I lived in New York for about two years, and then I was basically all over Europe…There’s no way that I could buy a house in any of these places that I’ve ever lived in,” Wormann explains. Discovering Japan’s affordable akiyas, he has now purchased seven properties, renovating several into successful short-term rentals. One property, costing approximately $110,000 to purchase and renovate, generates roughly $11,000 in monthly rental income.
Are Akiyas a Good Investment? A Cautious Perspective
While Wormann’s success story is compelling, the reality of investing in akiyas is more nuanced. He cautions that “you need to create a good community and a good social network in Japan in order to make it successful. 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.” Kaneko echoes this sentiment, stating that “Akiyas can be a good investment for certain groups, particularly hobbyists, DIY renovators or those seeking a quiet countryside retreat. However, they may not be ideal for institutional investors or those looking for quick or large returns, due to high renovation costs and limited resale potential in some areas.“
Navigating the Challenges
Potential investors must be prepared for significant costs beyond the initial purchase price. Substantial renovation might be needed, and navigating the Japanese bureaucracy and language barriers adds to the complexity. Scalability can also be a limiting factor. While the potential for profit exists, it requires significant time, effort, and a deep understanding of the Japanese market and culture. Careful research, realistic expectations, and a long-term perspective are crucial for success in this unique real estate landscape.
