A lot has been said and written about the impact of the declining birthrates and aging population on the Japanese economy. A little bit less has been mentioned on how these tendencies are affecting the real estate market. Yet, last year the akiya houses in Japan have made it to the news headlines. Let us take a closer look at what these houses are and how viable it is to invest in them.
What is an Akiya?
Akiya means “empty house”. However, the truth is, these are not just any empty houses available for sale. These houses are empty because they are abandoned. Today there are an estimated 10 million akiya in Japan.
Sometimes the houses are left to stand empty because the owner has passed away without living the heirs, or the family had to move out but could not take care of the property sales for some reason. In other cases, previous owners could not pay the mortgage and had to give up on that property.
Whatever the reason is, Japan offers these houses for a very attractive price, sometimes even for free. If it sounds too good to be true, that is because free akiya houses are not that free after all. Here are some things to know before investing in the abandoned property in Japan.
Sometimes akiya houses are given away for free.
Some areas have more akiya than the others. Quite often akiya property is located in the distant rural areas known as inaka. To the native speakers, this word hints to small and not-so-well-developed towns with few inhabitants and poor infrastructure. Also, there are very few jobs, if any. That is why younger people tend to leave for bigger cities.
If you choose to buy one of those empty houses deep in the countryside, you have to know that to obtain the ownership you must commit to living in this very house for several years, maybe decades. Depending on the area you might end up renting the akiya for around 20 years before you will get the right to buy it out.
Moreover, if your house comes with the plot of farmland, you will most probably be legally bound to cultivate it. Read the contract carefully before signing it, even if the house if free. It is worth considering if lower property prices can cover up for the inaka lifestyle.
Before you decide to obtain the ownership of the akiya, inspect the house. Buildings in Japan are constructed with the hot and humid summer and mind. Moreover, houses are not meant to last long. Quite often akiya houses are old wooden constructions with no central heating or earthquake protection. If the property has been vacant for several years, it has probably deteriorated quite a lot.
Termites and mold could have taken over. Provided how rarely people in Japan invest in reparations, the chances are high that demolishing the house is cheaper than fixing it. If you do, however, decide to renovate it, keep in mind that renovation services are scarce and expensive in Japan.
Legal aspects of buying akiya
Remember that the transfer of property in Japan comes with a lot of fees and taxes. Even if the property is offered for zero yen, you will still have to pay property acquisition tax, stamp duties, withholding taxes, management fees, etc. If the house has been abandoned while the mortgage was not fully repaid, acquiring akiya could mean acquiring someone else’s mortgage duties.
Finally, and probably most importantly, houses do not simply become akiya. The land prices keep on rising, and property that is clear of debt and has verified ownership will be sold and re-sold many times. However, it is not rare that the ownership of akiya is not clear. Thus, claiming the house may be difficult. Make sure to consult experts in real estate to make sure that the ownership rights for the akiya of your choice are verified and you will not end up in litigations.
Despite the hidden dangers of akiya, they are still a nice option for someone’s first investment into Japanese property if done correctly. Even some people in Japan are eager to get an akiya and use it as a family vacation house in the nature.
"Otsumami" - a bite size snack:
Akiya can be a nice option for your fists property investment in Japan.