Foreign buyers eye Japan's 'empty houses' with millions available for cheap — but experts warn of risks

There are 9 million “akiyas” — empty houses — across Japan, according to official government data as of 2023.

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Buying a home can feel like an impossible feat as large parts of the world face a housing shortage. This is not the case with Japan though, which is dealing with an oversupply of properties.

As of 2023, Japan had more than 9 million “akiyas” — empty houses — according to government data, with some of these properties going for less than $10,000.

These homes, often abandoned and left empty for decades, are scattered across rural areas and big cities, offering a unique opportunity for buyers with creative ideas.

Japan’s ‘akiyas’ explained

The rise in the number of abandoned houses in Japan is largely owed to a population crisis, as its fertility rate sinks to a record low of 1.2 births per woman as of 2023. Meanwhile, death rates have surpassed birth rates in Japan, as its elderly population continues to increase.

“The akiya problem has been building for decades, rooted in Japan’s post-war economic boom, which led to a surge in housing construction,” Tetsuya Kaneko, head of research and consultancy at Savills Japan told CNBC Make It.

“The issue became more pronounced in the 1990s with Japan’s economic slowdown, and has worsened with ongoing demographic changes,” said Kaneko.

Urban migration is another big contributing factor to Japan’s abandoned houses. “As younger generations move to cities for work, rural areas are left with aging populations who may pass away or be unable to maintain their homes,” he added.

Among local people, akiyas are often stigmatized, and even seen as a “burden,” said Kaneko. So, even when family homes are inherited by the children of elderly parents who pass away, many times, the heirs are reluctant to personally use or sell the property, adding more abandoned houses to the market.

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Notably, a home that is over 30-year-old “is typically considered old,” said Kaneko, and locals tend to be concerned over things like safety issues, high renovation costs and decay, he explained. Some people even associate these homes with superstition, “believing they might be haunted or bring bad luck.”

Ultimately, “many Japanese [people] look at akiya as depreciating items that are more trouble than they’re worth,” Michael, founder of Japan real estate blog Cheap Houses Japan, told CNBC Make It.

“The cheapest properties are that way for a reason,” he said, whether it is because the location is not desirable, or the cost of renovations are expected to exceed the value of the property.

Attracting foreign buyers

Japan’s akiyas are gaining the attention of overseas buyers.

“We’ve noticed a rising trend in inquiries from abroad …There has been an increase in interest and [in the] purchases of akiyas,” said Kaneko.

This rise in foreign interest for property in Japan has been driven partly by the pandemic, remote work trends, and shifting lifestyle preferences, said Kaneko.

From young investors to retirees looking for a retreat, “more people are seeking second homes, vacation properties, or renovation projects,” he said.

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.

Anton Wormann

Content creator and real estate investor

Take for instance, Anton Wormann. He fell in love with Japan after visiting it during a work trip. Born and raised in Sweden, the 32-year-old had traveled all over the world during his 20s working as a model before relocating to the Asian country in 2018.

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“I lived in New York for about two years, and then I was basically all over Europe … so I know how expensive all of these metropolitans are,” Wormann told CNBC Make It. “There’s no way that I could buy a house in any of these places that I’ve ever lived in.”

When he discovered that Japan was selling homes for cheap, he decided to purchase one for himself. Six years later, Wormann owns seven akiyas, and works as a full-time content creator and real estate investor in Japan.

He has completed renovations on three of his properties, and is currently working on finishing up the other four renovations. Today, a property that cost him a total of about $110,000 to purchase and renovate, brings in $11,000 in short-term rental revenue per month.

So, are ‘akiyas’ a good investment?

Wormann says “yes and no.”

Today, his properties are successfully bringing in six-figures in revenue a year, but this wouldn’t have happened if he didin’t put in the time and effort to become properly acquainted with the Japanese culture, language and people, he said.

“You need to create a good community and a good social network in Japan in order to make it successful,” Wormann said. “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.”

“If you’re trying to blend in and do it in the right way, I think there’s definitely a lot of opportunity, but more so, I think there’s an opportunity to buy cheap real estate to actually utilize [personally],” said Wormann.

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Experts echo this sentiment.

“Akiyas can be a good investment for certain groups, particularly hobbyists, DIY renovators or those seeking a quiet countryside retreat,” said Kaneko.

“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,” he said, adding that scalability can also be a limiting factor.

It’s important to expect that costs can be substantial, especially if the house needs major structural work, Kaneko added, and consider that the home-buying process can be complex with the language barrier and the need to navigate local authorities.

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