Japan’s home vacancy taking a toll on real estate value

Global Business

Japan has one of the world’s lowest birth rates, meaning the country is rapidly aging and putting pressure on the labor market. But that pressure is also taking a toll on the country’s real estate market.

To some, Japan’s image might be crowded trains, congested roads and people living in rows of small houses or apartments buildings. It was true, but Japan’s image and landscape may be rapidly change in the next decades. Falling birth rate and aging society are slowly but surely impacting the country.

A recent government report clearly indicated the trend. It is said that vacant homes in Japan increased to 13.5 percent due to falling population. According to the Nomura Research Institute, it is possible that one in five homes in Japan could be vacant in the next decade.

Old houses are left abandoned when residents move to elderly homes or die. Some houses might be left vacant without knowing who inherited the house.

Problems are more acute in rural areas as younger generations are more interested in living in cities.

Another complex reason is the property tax. In Japan, property tax of a plot of land without a house is six times more than a land with a house on top. So for many people, it is cheaper to let the old house sit until they find means to sell the land. These vacant houses are causing havoc to the local residents.

Residents are worried that old vacant houses could cause threat to the local community by people living in them illegally or using them for criminal activities.

District governments are said to be stepping up measures, such as purchasing the houses or offering the them cheaply to city dwellers who are willing to immigrate.

CCTV America’s Terrence Terashima reports.

Japan's home vacancy taking a toll on real estate value

Japan has one of the world's lowest birth rates. It also means the country is rapidly aging and pressuring the labor market. But those population pressures are also taking their toll on the country's real estate. CCTV America's Terrence Terashima reports.