We all saw on TV last year how you could buy abandoned houses in many parts of the US for a song. Unfortunately, it looked like many had been thoroughly vandalised, and were in neighbourhoods which might take a decade or so to feel safe and inhabited again. A house for a couple of thousand dollars in such a situation is not such a bargain.
But Japan is a different kettle of fish. (That’s a particularly apt expression for that country, come to think of it.)
Population decline has already set in, and about the only places growing are the big cities due to people leaving the rural areas. I had been wondering if bargains in housing were to be had, and this fascinating article claims that there are:
So just how many vacant properties are there in Japan? According to the Internal Affairs and Communications Ministry in 2008, there were an amazing 4.127 million unoccupied housing units, up 451,900 from 2003.
Some of these are old decaying abandoned homes which you wouldn’t want anyway, but it is still a big number, and it’s only likely to get bigger. The article goes on to provide a website which lists properties for sale as a result of tax foreclosures, but unfortunately it is in Japanese only, and is not exactly what you would call a glossy looking real estate site.
There is one major cultural difference about Japan which is odd to Westerners: except for apartments, modern Japanese do not expect houses to last long:
One reason why foreigners are a good fit to solve the vacant housing problem is that they are more willing to live in older properties and to perform their own maintenance. Japanese have been educated over the last 50 years that housing older than 25 years old should be demolished and rebuilt, leading people to really only want to buy new places. I know this firsthand, after a relative bought a countryside property, built a substantial Japanese-style post-and-beam house on the land (and which will last another 50 to 100 years), but being told by the bank several years ago that the house itself is now considered to already have zero value!
Some suggest that the Japanese expectation for the life of a house is affected by the number of earthquakes it might be expected to endure. But I am sure it is more than that. I was recently speaking to a Japanese couple, now Australian residents, who explained how surprised they were to find that renovated older homes (particularly in the Queenslander style) in Brisbane were expensive and highly valued. I think there is an idea that houses carry any bad luck that happened in them into the future.
Lots of websites say that there is no equivalent to our Foreign Investment Review Board restrictions on foreign purchase of real estate in Japan. (They also say that dealing with real estate agents may not be easy, but the article I linked to says there is a move afoot to encourage real estate agents to be helpful to foreign investors.)
All of this certainly suggests that you don’t buy a house in Japan with an expectation of making capital gain. But the idea of having a holiday home in the very pretty countryside of Japan might be a quite viable option for foreigners in the future.