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Attention Millennials: Japan Is Now Giving Away Free Houses ; Akiya banks: Real estate listings promoting sales of abandoned Japanese homes

December 14th, 2018 | by Richard Paul
Attention Millennials: Japan Is Now Giving Away Free Houses ; Akiya banks: Real estate listings promoting sales of abandoned Japanese homes
Lifestyle
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Akiya — abandoned homes — can be an affordable option for entering the real estate market in Japan. Here are some tips for how to find them and what to consider.

What is an akiya and an akiya bank?

Akiya (空き家) means vacant home in Japanese — and it has become a hot topic in the recent years. The Ministry of Internal Affairs and Communications estimated there are approximately 8.2 million abandoned houses across Japan in 2013, with Kagoshima, Kochi and Wakayama in the lead with 10% or more of all homes empty in these three prefectures. The number is now estimated to have exceeded 10 million. Some organisations expect that by 2033, more than 30% of all Japanese homes might be abandoned or vacant.

Akiya are a social issue with many aspects: Apart from being thought of as unsightly, they can also attract hazards like vandalism, pests or the deteriorating structures can collapse over time. Furthermore, municipalities with a multitude of abandoned homes not only receive less tax income, but the empty buildings also devalue the area in general. No wonder that rural communities — which are hit hardest with rising numbers of empty houses — want to alleviate this crisis.

One step to do just that are so-called akiya banks: lists of all abandoned properties for sale in a municipality, usually posted online, that offer the homes at low rates and with a simplified buying and selling process to move things along fast. These properties are cheap, often spacious and they sit on large plots of land in the Japanese countryside — no wonder that they are becoming popular with foreigners looking to change their metropolitan existence to a slow life in the country or Japanese city folk interested in a second home.

Below is an overview of akiya banks, how to use them and what to know before buying an old, abandoned home in the Japanese countryside.

What do I need to consider to when selecting a vacant property in Japan?

Even though some of these properties are extremely competitively priced, you should select carefully. Inspect the state of the building with an expert — it may be in a condition that means demolishing is the only option, making it a negative asset on the land you are buying. The causes are often termite damage or water leaks and ventilation problems that have lead to mould and breakdown of the wooden structures. In most cases you will need to refurbish some or all of the property, especially bathrooms and the kitchen. This can come with a hefty price tag in Japan – calculate between JPY 300,000 to JPY 800,000 per tsubo (the Japanese measurement for real estate, equivalent to 3.3 sq m).

However, government subsidies are sometimes available for those who buy and refurbish these old properties as it is an asset to the community. You need to fulfil certain conditions that vary by local government. Go with a Japanese person to the city hall to enquire about eligibility within the municipality you are buying in. There also might be some limitations on the type of mortgage you can get on your akiya. The popular Flat 35 Mortgage is usually only applicable for homes built to the newer earthquake standards after 1981 and chances are that your akiya might be older. Flat 35 mortgages are fixed interest loans with terms of 35 years, offered by most Japanese banks, with low interest rates.

And as a final word of warning, it is generally not recommended to buy foreclosed homes in Japan for a number of reasons. The case of a foreclosed property in Japan is rare and associated with absolute social failure. Besides carrying considerable stigma, yakuza are sometimes involved with such properties and the social intricacies are considered too complicated to be fully understood by foreigners — or even most locals.

How can I find akiya banks?

While there isn’t one central website that lists all akiya in Japan, many rural cities have made their own akiya bank websites or created subpages for abandoned homes on the market on the municipalities official sites, usually in Japanese.

For example, here is an akiya bank for Chiba, this one lists properties in Tochigi Prefecture and this covers all of Nagano Prefecture. IKndividual municipalities often have their own akiya banks as well, like this one for Ueda City in Nagano Prefecture or this one for the Minamiboso area in Chiba. There are also a few realtor websites that specialise in rural real estate and list akiya for a certain area or all prefectures, e.g. herehere and here. Again, these are not all encompassing and some vacant homes up for grabs in the countryside never make it online, but are only listed at the local city hall or with local agents. And some vacant homes are never sold because there is no owner, the owner does not want to sell or, with owners still thinking in bubble era terms, the asking price is so far above the market value that agents refuse to list the property.

There are also websites and blogs (in Japanese) that have put together comprehensive lists of links to akiya banks, sorted by prefecture, which serve as a very good starting point. With the large amount of vacant homes and lists out there, it is generally best to first narrow down the area you are interested in, for example, a beachside property on the Chiba peninsula as a second home. The key words 空き家バンク (akiya bank) and 千葉 (Chiba) will lead you to listings for the area. Also, consider visiting the city you want to live in and enquire at the city hall in person. This can give you the chance to snatch up attractive properties by registering your interest before they get listed. Locals are your best source of information about where and when a good deal will become available and could put you ahead of the chase to the perfect country home.

By Mareike Dornhege

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