Akiya - What you should know about it - Honest Realtor Opinion

Should You Buy an Akiya? Key Considerations for Purchasing a Cheap House in Japan

Japan's akiya properties have gained significant media attention recently. These properties appeal to those seeking to escape urban life in Japan and millennials overseas who are struggling with rising property prices. You've probably heard about akiya houses in Japan selling for extremely low prices, and sometimes even for free. But what's the catch? Is it truly as affordable as it seems? It it still true today with recent popularity ?

Understanding Akiya

The term “akiya” (空き家) translates to “empty house,” which may or may not have traceable ownership. Akiya are increasingly common in Japan, especially on smaller islands like Shikoku and Kyushu, where nearly 20% of housing stock can be vacant. The primary reason is depopulation, particularly in rural areas. As the value of these homes plummets, owners have little incentive to maintain them for sale.

As a professional in the market, realtors don't receive significant incentives from these low-priced houses in Japan, and the often inconvenient locations further complicate matters

Akiya can be traditional wooden houses with clay walls, paper screens, and tatami mats, but not always. Many of these abandoned homes were constructed in the last few decades, adding to the inventory of unused properties.

What Are Akiya Banks?

Akiya banks, or akiya banku (空き家バンク), are organizations that connect prospective buyers with sellers or landlords of abandoned homes. These initiatives are often led by local authorities aiming to rejuvenate their regions by attracting new residents. Akiya banks make it easier to find information about these properties, often featuring websites similar to those of traditional real estate agents but without the agency fees. They also provide more transparency about the property's condition.

How to found your Akiya? (Akiya banks)

To use an akiya bank, you need to find one and sign up. Akiya and akiya banks are more common in regional towns and villages. If you have a specific location in mind, search for their website in English or Japanese (e.g., “[place name]市　空き家バンク”). English sites are rare, so I strongly recommend to ask a Real Estate Agent, in addition of his professional eye, he will arrange everything.

For example, Tsushima in Nagasaki Prefecture has a simple website (viewable using Google Translate) with a section for their akiya listings. Listings include details like publication date and renovation needs. Some akiya, like a 90s home with four rooms, a kitchen, a balcony, and a garden for ¥3 million (~US$24k), can be found here.

If you're unsure about the location, consider browsing listings at the prefectural level. Nagano Prefecture, for instance, has compiled data for akiya banks across the region. You might find large homes at reasonable prices, though renovations may be required.

Anyone can sign up with an akiya bank, whether you are a resident of Japan or not. Once registered, you can book viewings with an akiya bank representative who can guide you through the purchase process and advise on funding for necessary renovations.

The Cost of Akiya

Akiya prices vary widely. While some properties are extremely cheap, even given away, these are often dilapidated and may not be worth the trouble. However, it's possible to find excellent akiya for under $100k, often below $50k in rural areas. Due diligence is essential to avoid costly repairs later on.

4 Key Things to Know Before Buying an Akiya

1. Renovation Costs: Many cheap akiya require significant renovations. Common issues include structural, plumbing, electrical, and roofing problems. It is advisable to hire a building inspector (costing between ¥50,000 and ¥100,000) before making an offer. While the inspector can evaluate most of the house's condition, my experience in Japan suggests that humidity often affects the house's foundation, which is not easily detectable before purchase.
2. Additional Fees and Taxes: Be prepared for significant one-off fees, taxes, and regular taxes when buying a home in Japan. These can include registration tax, property acquisition tax, and annual property taxes, potentially costing up to $4,000.
3. Contract Requirements:  Carefully review the contract for any specific requirements. While it is very rare, some akiya contracts require permanent residency or include rent-to-own clauses. Your real estate agent will inform you of any such unusual conditions."
4. Natural Disasters: Japan's geographical location makes it prone to natural disasters like earthquakes. Be cautious of properties on reclaimed land, river banks, flood plains, or soft soil. Older homes may not meet modern earthquake resistance standards and the low price can hide a very bad geological context.

Conclusion

From my previous personal and customer experiences, even if the price is tempting, it is better to avoid properties in very bad condition and focus on those in better condition. This will eliminate some variables and save you time, money, and energy. For more information, you can contact us directly.