Japan’s population is in decline, which means there are many homes that remain unoccupied. This situation has created a unique opportunity for Australians: purchasing an entire house and land for less than the cost of hiring a plumber to fix a tap on an Australian property. It sounds like a great deal, doesn’t it?
These abandoned homes are known as “Akiya.” Buying Akiyas has become a popular activity for foreigners, but there are still so many of them that their value remains impressive. At least for now.
Young Australian households are facing a spending and baby-making downturn. The next move in Japanese stocks depends on oil prices. Aussies traveling to Japan have been warned about common tourist ‘cash grabs.’
Akiya can be incredibly cheap! One example is available for just 90 cents (100 Japanese yen).
And it looks good—on the outside, at least.
After transaction fees, you could get the papers on that place for around A$2,000. Which, let’s be clear, is what you’d pay for a couple of weeks in an Australian country shack on Airbnb.
We live in a very expensive country!
What you get for your money in Japan is a house in an unwanted location, but in a very good country. Japan remains wealthy. The infrastructure isn’t shiny and new like China’s, but it is extremely functional. Unemployment is low.
Even a “bad” location in Japan will be a 15-minute drive from a medium-sized town with a train station. That house above is walking distance from a JR station that connects you to a shinkansen (bullet train) that gets you to Tokyo.
This next Akiya might be a better option. It may look a bit run-down, but it is well-located on the outskirts of Kyoto and costs just A$9,000. That’s a few months’ rent in inner Sydney.
The risks of buying cheap Japanese property
Akiya can be in very poor condition. Many Akiya buyers have difficulty getting tradespeople in. You do not want to buy sight unseen. The problems you face can be tricky.
For example, this next one has a literal thatched roof. Price: One million Japanese yen, which is about $10,000. Not recommended if you have grass allergies.
The presence of all these Akiyas raises a question: Where is Japan heading? Is it a clue to where the world is going?
Japan’s population has been shrinking for almost 20 years now. But it is not the only one. There used to be only a tiny handful of countries with shrinking populations, but now it is many, and the UN keeps adjusting its estimate of when we hit peak global population. The peak was once forecast for next century, but now it is anticipated in a few decades.
“One in four people lives in a country where the population has already peaked,” says the UN.
India’s fertility rate is below replacement rate already, and by some estimates, peak global population could be as soon as 2064. So what are we doing about it?
The lesson of China is that this might be unstoppable. Even if a country tries desperately to reverse its population fall, raising birthrates is hard. And if policy is not aggressive, before long they are depending on a smaller and smaller cohort of people to have children. Then the maths stops working out. If every Chinese couple in the current generation has just one child—as the data suggests they will—then each couple in that younger generation would need to have four kids to return China’s next generation to the size of the current generation. Four kids sounds crazy when they haven’t even found a policy lever that can raise it from 1 to 1.1. The decline seems, in any practical sense, irreversible.
If population falls become commonplace, abandoned homes will too. One Japanese think tank projects that over 30 per cent of Japanese homes could be abandoned by 2033.
It is very hard to believe from the vantage point of an Australian major city, but worldwide, housing could soon enough be in surplus.
So by all means, buy an Akiya. Enjoy fixing it up. But don’t expect to find someone to sell it to. The world is shrinking. Unwanted homes in far-flung locations? They could be common before long.
It might not ever be the case here in Australia, but in the rest of the world, real estate might become abundant.
