In contrast to Japan’s soaring property price growth, Japan still has more than 8 million uninhabited and neglected properties, so owners are starting to give away these homes for free. Quoting Business Insider, the abandoned properties did not enter an active market but entered an online database called “Akiya Banks” or in Japanese from empty houses. In the database, some owners give their homes away for free and some sell them for only $4.
The number of abandoned houses is judged to be caused by Japan’s declining population. The results of the study predict that Japan will lose around 16 million population in the next 20 years.
In addition, the number of elderly people is increasing so that the number of young people who are productive as an active property market is dwindling, especially in suburban and rural areas. However, The Japan Times reports the phenomenon has entered urban areas as well, with evidence that more than 1 in 10 houses in Tokyo are now uninhabited.
The soaring number of vacant houses that are just abandoned, not only makes owners give houses for free, there are even local government regulations that provide attractive incentives and subsidies to tear down and rebuild abandoned houses.
However, in fact the property market in Japan encourages the demolition of old abandoned buildings by raising property taxes six times higher where there is a physical building structure compared to only vacant land. Foreign nationals are also allowed to buy the property even without a resident visa.
Previously, the market for rental housing services such as Airbnb was predicted to take over the abandoned building to be used as a rental house. However, Japan passed a relatively strict new law that limits the rental period to 180 days, so many home voters for Airbnb have left the market since the law was enacted. The condition of the many abandoned houses is also compounded by the ever-increasing demand for new homes in Japan. Homebuyers continue to prioritize new homes and millions of abandoned homes will remain unmarketed and uninhabited.