On Dec. 26 last year, I found an empty house in Hirano Ward, about a 20-minute drive from downtown Osaka. Located at the entrance of a busy alley, the house looked no different from any other residential house. A local real estate agent noted, "Compared to other empty houses, this one is well maintained," explaining that the management of empty houses in urban areas of Japan is conducted meticulously under government guidance.
Even after visiting several empty houses in this neighborhood, most did not appear to be uninhabited from an outward perspective. A large sign saying "For sale" was the only indication that the tidy two-story house was currently empty. In some cases, poorly maintained empty houses had already been demolished. In place of demolished empty houses, real estate companies had placed promotional flags for new developments. A resident in their 70s from Hirano Ward said, "The houses that used to be inhabited have been demolished and turned into vacant lots."
Japan is a country that faced the issue of empty houses before South Korea. According to the Housing and Land Statistical Survey compiled by the Japanese Ministry of Internal Affairs and Communications, the total number of empty houses in Japan was 8.99 million as of October 2023. This means that empty houses make up 13.8% of all dwellings, the highest level since the statistics began in 1973. Among the empty houses, 3.85 million have been left unattended for a long time without any usage purpose, accounting for 5.9% of all dwellings in Japan.
Osaka, recognized as a major city in Japan, has also not been spared from the problem of empty houses. The proportion of empty houses in Hirano Ward, not far from the city center, is 15.1%, and this percentage jumps to over 20% as one moves to the outskirts. Kim Sang-uk, a 50-year-old real estate agent catering to the Korean community in Osaka, said, "It has been quite some time since 'akiya' (empty houses) have become a headache across Japan, including Osaka. The issue of akiya in rural areas has worsened, and akiya can be easily found even in urban areas." He added, "Even if akiya is registered for sale, it is often a burden as transactions are not easily made, and only expenses accumulate."
◇High demolition and remodeling expenses, preference for newly built single-family homes... contributing to the increase in empty houses
The issue of empty houses in Japan is a result of declining population due to low birth rates and aging. This is similar to the reasons for the emergence of empty houses in South Korea. However, in Japan, the problem is exacerbated by social and economic factors, such as the expense of remodeling, which is necessary for seismic design, and the preference for newly built single-family homes.
The high expense of demolishing or renovating empty houses makes it difficult to repurpose or manage them effectively. According to the Japanese Ministry of Internal Affairs and Communications, more than 70% of empty houses in Japan were built before 1980. In comparison, only 20% of empty houses in South Korea were built before 1980, indicating that Japan has a significantly higher number of older empty houses. Houses built during that period do not meet current seismic design standards. Consequently, remodeling processes must include reinforcement of seismic performance, which increases expenses. Japan is currently facing a polarization in the housing market, with prices for high-end apartments in urban areas rising, leading to lower demand for spending remodeling costs on older used houses expected to decrease in value over time.
Ruben Glazer, CEO of the empty house trading platform 'Akiya Banks' in Japan, noted in an interview that "Japanese houses have been built with low sustainability from at least after World War II until the early 2000s," adding that "since then, disaster prevention ordinances, laws, and regulations have been enacted to protect against earthquakes and typhoons, so empty houses in Japan currently lack these functions."
High demolition expenses and taxes are also contributing factors to the increase in empty houses. The fixed asset tax applied to land after an empty house is demolished is 1.4% of the tax base. However, the tax imposed on dwellings is only one-sixth of the tax base. For example, if a person owns fixed assets worth 50 million yen (approximately 460 million won), the annual tax would be 700,000 yen (approximately 6.44 million won), but if they simply hold onto an empty house, they would only pay 117,000 yen (approximately 1.07 million won) annually. Even when combined with management expenses, it is economically advantageous to keep an empty house rather than demolish it.
The high threshold for loans for inner-city empty houses is also a factor preventing their numbers from decreasing. In rural areas, empty houses may be available for free, or the owners may even pay money to those willing to buy them. However, empty houses in urban areas need to be purchased, and if one tries to finance this through loans, they must pass the bank’s high approval threshold. A local real estate agent said, "Aged homes like empty houses over 30 years can be seen as having almost no asset value," adding that "this leads to stricter evaluations, which may decrease the loan amount."
Japan’s cultural preference for newly built single-family homes also reduces demand for empty houses. CEO Glazer stated, "In Japan, there is a culture that views being the first person to live in a newly built single-family home as a sign of success," explaining that "perceptions of used homes are not very favorable, making it difficult to transact older empty houses considering remodeling costs."
He added, "Especially in Japan, there is a negative perception of properties associated with death or bad luck, known as 'jikobukken,' which further hinders transactions involving empty houses."
◇As empty houses increase, neighborhoods lose vitality and crime rises
The phenomenon of intensifying empty houses hinders the development of local areas. A local real estate agent stated, "Areas with many empty houses see population outflow, leaving only the elderly behind, resulting in a loss of vitality," adding that "particularly in small rural towns, there are cases where support measures are provided for young people who live in empty houses."
The risk of crime related to empty houses is also increasing. Incidents of theft targeting valuables in empty houses are rapidly on the rise. According to the Korean National Police Agency, the number of burglary incidents occurring in empty houses rose from 3,180 in 2020 to nearly double, reaching 8,189 in 2023.
Crimes such as arson or drug transactions in empty houses have also occurred. In October 2019, a young person in their 20s set fire to an empty house in Chichibu City, Saitama Prefecture, resulting in the complete destruction of the property. In 2018, there was also a case where drugs were being traded on a large scale in an empty house in Chiba Prefecture.
In the future, the problem of empty houses in Japan is expected to worsen. Nomura Research Institute has projected that the proportion of empty houses in Japan will expand to 27.3% by 2033. Economic losses associated with this situation are also a concern. Japan's 'National Empty House Countermeasure Consortium' has analyzed that if 100,000 empty houses are left unattended, an economic loss of about 1.5 trillion yen (approximately 13 trillion won) would occur.
Uto Masaaki, a professor at the Graduate School of Environment and Information Studies at Tokyo City University, stated, "The proportion of empty houses surpassed 10% in 1998, and currently, the inventory of dwellings exceeds the number of households," adding that "if the current trends of new construction and demolitions continue, the proportion of empty houses could reach 30% by 2033." He further noted, "If new constructions are reduced by half while doubling demolitions to utilize the current housing inventory, the proportion of empty houses is expected to increase to 23% by 2033."