Month: October 2025

Mama said knock it down

Posted on by catforehead

House built in Nikko in the early 1980s

Recent media reports say that housing starts are dropping in Japan, which is understandable but also worrying to those who gauge Japan’s economic health. Japan has long promoted new housing as a prime economic stimulus to the point of downplaying sales of used homes. It’s one of the reasons for the so-called akiya (vacant home) problem, and with the population also dropping, the government can no longer count on high volume sales of new home to fuel the economy, regardless of how attractive they make them. 

It’s also why the central government has done mostly nothing about the akiya problem. As long as new home sales grew, there was no problem, as far as they were concerned. But local governments have always had to contend with empty houses, which are dangerous eyesores that threaten property values. There’s also the problem of absent owners who disappear and stop paying property taxes. Consequently, it’s been local governments that have come up with measures to address the problem.

But now it seems, the central government is getting involved, albeit cautiously. On Oct. 2, Yomiuri Shimbun reported on a new national plan that would have the government subsidizing renovations of houses that may become vacant in order to make them appealing to young families. Next year, the land ministry will launch a model project that will target “homes in cities and surrounding areas” that can be renovated into homes for couples who are raising children. 

The specific type of homeowner for the project will be people who are thinking about moving out of their homes in the future and moving into care facilities. Such actions often lead to vacant properties because the owner does not have an heir or otherwise cannot sell the property. The ministry will interview such owners and, depending on the circumstances, offer the owner subsidies to have the property renovated into a home that would be more suitable for young families or facilities like daycare centers. The subsidy would likely not cover the complete cost of renovation, which the owners would have to carry out themselves. 

Obviously, there is a limited benefit to the plan. The target is only properties in cities and their close suburbs, though the most serious akiya problems are in rural areas and more distant suburbs. Moreover, the subsidy system addresses homes that are not yet vacant but could be, meaning that there is still a possibility that the owner, especially if they live in a major city, can sell their property easily if they try. Presumably, the ministry is thinking of homes that would sell more easily if renovated properly, but, in our own experience, we’ve found that buyers of older properties tend to want to renovate according to their own tastes. When owners or realtors renovate for an assumed general taste it doesn’t necessarily make the property easier to sell. 

The Yomiuri article also leaves out a lot of details that are needed to judge the viability of the project: At what age would the ministry contact homeowners, and what criteria is used to assess their eligibility? How would the ministry persuade the owners to carry out renovations themselves? If the purpose of the project is to check the number of vacant homes in cities and provide properties that will be easier for young families to buy as urban real estate prices go up, it would probably be more effective for the government to just buy real estate itself and rebuild to desired specifications, but that would contradict the tenets of laissez faire capitalism. 

According to a ministry survey, the number of homes in Tokyo and the three surrounding prefectures where the owner is 85 or older is about 340,000. The number is projected to increase to 940,000 by 2033. The increase is similar in the Kinki region: from 210,000 now to 580,000 by 2033. A good portion of these homes were built between the mid-1950s and 1980, meaning they predate quake-proofing technology that is now required. They are beyond renovation. They need to be torn down.

As do many houses that were built after 1981, when quake-proofing standards were first implemented for residential housing. The cost of renovating some structures built even before 2000 may be prohibitive for many of their owners, especially if they are living on fixed incomes. The proposed subsidies, though not finalized yet, will not cover the total cost. 

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Northern exposure

Posted on by catforehead

One of the topics being discussed by candidates for the Liberal Democratic Party presidency is foreigners in Japan, and an aspect of that discussion is foreigners buying property. Some years ago the issue came up with regard to security risks, such as land that was near Self-Defense Forces facilities, but now the net is being thrown wider because foreigners with money are buying up land and condominiums for investment purposes and driving up prices, especially in Tokyo where Japanese families are finding themselves priced out of the housing market.

One area that has been popular among foreigners is Niseko in Hokkaido, which is famous for its ski slopes and excellent powder conditions. According to an article that appeared last June in the Asahi Shimbun, if you go to Niseko, you will see a lot of for-sale signs and billboards in English hawking land. The Asahi reporter who went there in May says he saw many construction workers and dump trucks in the area, where there are subdivisions for vacation homes. However, many of the lots in these subdivisions remain vacant, and appear to have been vacant for some time. He found four that were recently put up for public auction due to foreclosure, but not because the owners failed to keep up their loan payments, but rather because they have not kept up with their property tax payments. 

According to public records, the four plots were originally sold by a Tokyo realtor in 1988, meaning during the bubble period when everyone thought land prices in Japan would continue increasing forever. The realtor has since gone out of business. Two of the plots are in a vacation home subdivision 2 km south of the main ski area. Land registration records indicate that the subdivision was carved out of a tract of forested land in the 1980s. There is obviously still some demand for second houses, because the reporter saw construction taking place on some plots, but the two in question remain empty. One of the plots is 205 square meters and the market price is ¥3.444 million. 

Two other vacant plots originally sold by the Tokyo realtor are located in a mostly forested subdivision 3 km north of the ski area. Though the plots are on prepared ground, they are still empty, and are cheaper than the plots in the south subdivision, ¥492,000 for 385 square meters. 

Originally, the plots were bought by someone who lived in Sapporo between 1979 and 1983 as investments, but after the bubble ended there were few buyers, which is why development stalled and many plots remained vacant. However, starting about 20 years ago, the ski area became popular among foreigners, in particular Australians. But the reporter also found several plots that were registered to addresses in China, and still more registered to addresses in local towns but with names that were in katakana, thus indicating the owners weren’t Japanese. 

A bulletin board in front of the town hall lists notifications of properties with unpaid property tax bills that includes the addresses of the delinquent owners, most of which live overseas. In almost all the cases, the reporter learned, notices of delinquent payments were sent to the addresses overseas and later returned because the notice was undeliverable for some reason. The number of unreachable owners exceeds 100. 

A representative of the town’s tax division told the reporter that after a certain period of time, the town can foreclose on the land and put it up for sale. Last year, they did that for 11 plots. And it isn’t just individual plots earmarked for vacation homes. In 2022, the town foreclosed on a construction company that owned a hotel near the ski area due to unpaid property tax bills. The company is based in Tokyo, but the president’s name is, again, in katakana and the company is registered in the Cayman Islands, a famous tax haven. 

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