Surfing social media, you see some pages advertising Japanese akiya units, also known as abandoned homes. Akiya houses cost less than a brand-new sedan, but Kavan Choksi discourages haphazardly buying one.
Akiya houses are indeed cheap. Banks list distressed, abandoned properties at extremely low prices because they need to sell them off quickly. In remote rural areas, the bidding starts at just $500. However, you might end up disappointed if you buy one without doing prior research.
Don't get us wrong—we're not saying you shouldn't consider getting akiya houses, but at least understand how the Japanese real estate market operates.
Consider the following points:
Property Appreciation
Unlike the U.S. real estate market, houses don’t typically appreciate in value as they age. Japan frequently updates its building codes. An older house will almost always have a lower market value than a brand-new one because it still needs repairs.
Abundance of Akiya Houses
Kavan Choksi shares that Japan has a glut of abandoned houses in rural areas. Residents are leaving their houses to live in the city. However, they don’t bother selling them; they leave the structure there to deteriorate. Unfortunately, a rotting house is hazardous. And for this reason, the government endeavors to dispose of these abandoned houses as quickly as possible with super-low bidding prices.
Local Job Opportunities
There aren’t many rural job opportunities. Kavan Choksi shares that Japan has a generally weak agricultural sector, so most residents flock to the city to become salarymen. Sadly, this mindset causes underpopulation in rural areas. Most rural parts of Japan consist of older adults nowadays.
Repairs and Renovations Needed
Japan frequently updates its building codes. If you purchase a second-hand home, expect to shell out money for repairs and renovations, even if the space is already habitable.
Investing in the Japanese Housing Market
Japan has a lucrative housing market, but you'll quickly lose all your money if you buy the wrong property. Old, damaged houses have zero chance of increasing in value. In the worst-case scenario, you could end up with a cheap abandoned home in a rural area, hoping to get an ROI. Trust us—you won't.
Overall, foreigners shouldn't blindly invest in Japanese real estate. Kavan Choksi understands that the online super-affordable abandoned or haunted houses might seem like excellent deals, but Japanese real estate prices move differently. They won't increase in value. You'd do well to consider newer homes in high-demand, urban locations like Sapporo, Tokyo, or Yokohama.
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