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Japan’s Glut of Abandoned Homes: Not Easy to Sell but Bargains When Opportunity Knocks

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Unoccupied homes are permeating suburbs and worming into crowded cities at an alarming rate. This house in Omiya Ward, Saitama, has blocked construction of a new street. | REUTERS

Alex Martin reports: Realtor Yuken Kon specializes in properties most of his peers steer clear of.

Take a two-bedroom apartment on the second floor of an aging, five-story Soviet-style danchi complex in the quiet outskirts of Yokohama.

“A follower of esoteric Buddhism, Kon performs goma fire rituals at properties he decides to manage to clear out any negative energy the space may harbor. He takes hints from  feng shui when renovating homes and advertises on his website how the process reinvents forsaken homes as “good luck properties” available below the market price.”

It belonged to a divorcee in her 60s who jumped to her death from the roof of the building amid a bout of depression. The condo was inherited by one of her daughters, but she had no use for the property — it was nearly five decades old and tied to painful memories of her late mother.

So it remained abandoned, like millions of other homes in Japan that have been left vacant as the nation grays and its population shrinks.

“It’s common to find places like this that go unoccupied after the owner passes away,” Kon said.

He oversaw a full renovation of the apartment and is asking ¥9.8 million for it — a bargain considering the investments made to replace the time-worn kitchen, toilet and bathroom, not to mention the flooring and wallpaper.

“There’s always someone interested in a good deal,” he said.

Once a phenomenon primarily associated with rural communities, abandoned homes are permeating suburbs and worming into crowded cities at an alarming rate.

[Read the full story here, at The Japan Times]

Over 8 million properties across Japan are unoccupied, according to a 2013 government report. Nearly a fourth have been deserted indefinitely, neither for sale nor rent.

In Tokyo — where 70 percent of the people live in apartments — more than 1 in 10 homes are empty, a ratio higher than in cities like London, New York and Paris.

And that figure is expected to soar in the coming decades as deaths outpace births in a super-aging society where more than 1 in 4 people are 65 or older.

Nomura Research Institute projects the number of abandoned dwellings to grow to 21.7 million by 2033, or roughly one-third of all homes in Japan. Meanwhile the population, which peaked nearly a decade ago, is forecast to fall 30 percent by 2065, creating an ever-increasing pool of uninhabited houses.

“There is no single answer to the problem,” said Wataru Sakakibara, a senior consultant at NRI who led the think tank’s study.

He said various measures are being promoted by the government and municipalities to tackle the phenomena, including subsidies for owners willing to dismantle dilapidated houses. But tearing down homes is costly, and a decades-old tax break that promotes construction by setting property tax on vacant lots at six times the level of those with buildings discourages demolition. Meanwhile, housing starts reached 967,200 in 2016, a 6.4 percent increase from the previous year.

“If this continues, at some point it may be necessary to consider limiting new construction. But that would have a substantial impact on the economy,” Sakakibara said.

Vacant houses are not only eyesores and firetraps but easy targets of vandalism that can diminish surrounding property values. It’s one of the most visible signs of how Japan’s demographic shift is reshaping its landscape.

Kon, who heads the aptly named Outlet Real Estate Co., turns a profit by transforming such liabilities into assets … (read more)

 

Source: The Japan Times

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