My Journey Through Japan’s Akiya House Market

Vacant home prices are astonishingly cheap

Joe Honton
Japonica Publication


Empty houses are especially prevalent in rural communities like this one just outside the town of Soja, Okayama. (Photo: JH)

I’ve just returned from a two week research trip to Okayama prefecture. The purpose of my trip was to scout the area to find a suitable place to call home. If all goes as planned, I will enjoy my retirement years there, leaving America and saying goodbye to the San Francisco Bay Area after four decades.

Those two weeks dramatically changed my former thinking about the affordability of real estate in Japan. Sky-high prices for a cramped rabbit hutch in Tokyo may still be a thing, but once you leave the big city nothing could be further from the truth!

I began my house search by poking around the well publicized スーモ suumo website, applying filters for price, year built, number of rooms, and property size, plus the all important factor “distance to the nearest train station”. Curiously, the website’s listings didn’t show many of the eligible houses that fit my criteria.

It turns out that many Japanese home buyers are only interested in recently built or custom built new homes. The bias against used houses is a wide-spread cultural phenomenon. I don’t share that sentiment, so I filtered the results to only show used detached houses. My hope was that I’d find a fixer-upper at a reasonable price. I’m handy with tools and carpentry, so refurbishing an old bathroom and kitchen are doable projects for me.

For anyone with similar interests, note that the direct translation of フィクサーアッパー (“fixer-upper”) doesn’t return anything useful when searching the web. Instead, the better term to use is akiya 空き家 (“empty house”). Quite often an akiya has been abandoned by its owners, and left as a neighborhood eyesore. The reasons for this are varied, but a frequent scenario is one where the legal owners are elderly and under care elsewhere, or have died and left title to relatives with no intention of using it. These stories are commonplace throughout Japan.

Anyone squeamish about living in a house where the former occupants have passed away can check 大島てる (“Oshima Teru”) to see if their prospective property is tied to an unfortunate incident. Real estate agents are required to disclose this information as well. As expected in a country as safe as Japan, the proportion of akiya that have such a stigma is very low.

After years of neglect and failure to pay taxes, many thousands of akiya have ended up in the hands of local city governments. Various approaches have been tried to solve this problem, such as selling them for as little as ¥100, with the stipulation that the new owners will live in them for a specified number of years. Some cities have even set aside grants to pay the new owners to remove the piles of treasure and trash that the deceased owners held onto until the very end.

The key to finding these houses is to access the special akiya banks 空き家バンク setup by many cities as part of their population growth departments. They operate as a sort of match-maker between prospective sellers and buyers. Traditional real estate agents, who would normally fulfill this role, are oftentimes reluctant to get involved because home prices are so low, and it’s too time consuming to get involved. Commissions are capped by law to just ¥60,000 + 3% of the selling price. The Akiya Banks Property Portal is a convenient tool to get links to all the separate city government operated websites where listings can be examined.

An even more selective way to help narrow things down is to look for kominka 古民家 (“old folk house”). These are houses built as post and beam structures using traditional mortise and tenon joints pinned together with hardwood pegs. These are invariably older homes, built a century ago, using massive timbers for the frame, mud and lime walls, tatami flooring, fusuma room separators, shoji doors, and engawa 縁側 (“open-air veranda”). Their elegance is timeless. There’s a cottage industry around saving these treasures from the wrecking ball and renovating them to be livable again.

A wrap-around engawa is a distinctive feature of traditional Japanese houses. (Photo: Wikimedia)

Finally, anyone looking to get away from the go-go-go of urban life can find log cabins and rural getaways through the website Inaka kurashi 田舎暮らし (“country life”).

Although most real estate transactions are carried out with the help of a professional agent, there is no requirement that they be involved. The ie ICHIBA 家いちば (“house market”) bulletin board has postings by current owners who are hoping to find a buyer directly.

Recently, many rural cities have been taking a new approach towards the problem of shrinking populations: they’ve set up O tameshi jūtaku お試し住宅 (“trial houses”), where people curious about a possible move away from the big city can stay for a while and experience life first hand. With a typical daily fee of just ¥1,000 these trial houses are about one-tenth the price of a nightly hotel rental. Each is administered by the local city government’s population promotion department. Many of these target specific demographics, for example: young families with child-care needs; entrepreneurial types contemplating a business venture; or retirees with transportation and health care questions. Okayama prefecture alone has 37 of these trial houses, each in a different city or village.

During our two-week trip we took advantage of three of these trial houses. Although each had the basics of bathroom necessities and a modestly equipped kitchen, each was distinctly different. One was a hundred-year old renovated structure, one an apartment complex, and one a modern detached house.

Our short duration stays in each place afforded us the opportunity to freely walk about different neighborhoods experiencing first hand the daily flow: students bicycling to school; employees busy at work; shoppers picking over marked-down grocery items; cars tangled up in the rush hour waiting for yet another train to pass. In other words, all the ordinary aspect of daily living, most of it mundane, none of it ever appearing in brochures or guide books.

But these trial houses are not just an inexpensive place to stay. We could have used Airbnb for that. Instead, we were surprised and delighted by the graciousness of our trial house hosts.

We all know how Japanese culture places a premium on excellent service, but I was not prepared for that to extend into the civic sector. When we filled out the trial house reservation forms to secure the arrival and departure dates of our stays, we also filled out application questionnaires. The gist of them was to discover our story, in order to allow each city to better meet our needs during our short stays. Since our child care days are long gone, and our elder care needs are far off, what we needed most was help finding architects, renovation contractors, DIY home centers, and so forth.

We got all that and much more. Allow me to briefly digress.

Shimotsui is a small fishing village on Okayama’s southernmost peninsula. The folks at Shimotsui Sea Village managed our stay. The trial house is a side project for them, their real function is to act as a sort of business chamber of commerce and community center. On our first evening there, we sat in on their bi-weekly meeting, where the eight or nine attendees reported on recent activities and upcoming events. This gave us a firsthand insider’s view of community involvement, and a strong sense that “things were happening”. If we hadn’t witnessed that, I would have left Shimotsui with a far different impression.

Former Watanabe tofu store in Shimotsui, now renovated and used as a trial house. (Photo: Nanbakenchiku)

This village, established in the Heian period (794–1185), was an important port along the Kitamaebune trade route, but today there are more derelict trawlers in the harbor than anything else. The number of active fishermen is a fraction of what it was during its Edo period heyday (1603–1867). It’s a problem the townsfolk are trying to address. But ultimately, because of the warm reception we received the prior day, I was able to set aside that negative portside vibe and form a positive impression of the village.

We met others who drove us around town, helped with shopping, treated us to lunch, and shared stories of where they’ve been and how they ended up in this charming place. All of this was made possible by the trial house association.

But our most significant contact was Masada Junya, CEO of Nanba Architecture Studio. By prior arrangement, we met Masada-san in the Shimotsui Sea Village office on the second morning of our stay. With the help of the trial house association, we had signed up for a seminar about kominka home renovation.

We arrived at the appointed hour to discover that we were the only attendees. The seminar quickly morphed into a private consultation as Masada-san culled his all-purpose slide-stack into just a handful of relevant topics: the historic roots of kominka architecture, kominka weather and climate considerations, kominka preservation and repair possibilities, and so forth.

Afterwards Masada-san walked with us to the nearby site of a kominka merchant trading house, long since fallen out of use, and showed us how much work is involved in rejuvenating such a place. Best of all, for me, we were treated to a tour of his company’s warehouse where he stored salvaged timbers, doors, and architectural flourishes, as they waited to be reused in future projects. We also visited his workshop filled with large planers, joiners, band saws, and specialized equipment for working with those huge timbers. I was enthralled by everything Masada-san showed us.

Every once in a while Japanese television will show a program about DIY home renovation projects. Those before and after makeovers always leave me hungry to try something myself. But after our tours with Masada-san I realized that restoring a century old house is not a job for a weekend carpenter. Those long timbers, with a circumference larger than a telephone pole, must weigh hundreds of kilograms. Any adjustments for settled foundations would require boom cranes or hydraulic jacks or both.

Still, the smaller projects are within my reach. Things like insulation, new flooring, new doors and windows, and new lighting, are all doable. The nearby DIY home centers we visited had all the materials, fasteners and tools that we’d need for such projects.

For anyone with the inclination and know-how, the only limiting factor is cost. The four kominka that we saw were each being offered at 4 to 8 million yen ($25,000 — $50,000). My educated guess is that bringing them up to a livable condition would cost an additional 10 to 20 million yen ($75,000 to $150,000). Those figures are for materials and occasional professional help; the bulk of the work is assumed to be DIY labor.

Overall, real estate prices in Japan are so much lower than I expected, that I had to triple check to make sure I wasn’t dropping a zero when converting one million yen to $7,000.

Every once in a while I’ll find a property for sale at an unreasonably high price, but that’s rare — those aren’t serious sellers. More often though I’ll see motivated sellers reducing their already low asking price even further. It’s not a good time for sellers, there are just too many properties for sale with shrinking demand.

When it comes time to seriously negotiate the purchase price of a property, there is a government website that can help. The Land General Information System is operated by Japan’s centralized MLIT. You can lookup recent sales transactions of comparable properties for any region, prefecture, city, ward, or chome. Transactions are grouped by fiscal quarters, covering the past two decades. Each entry show the sales price, building size, lot size and shape, year built, type of construction, type of road and road width, nearest station, city zoning, and maximum building coverage ratio. There’s a handy download button where you can grab all of the data in spreadsheet compatible format to perform your own detailed analysis.

For planning purposes, final closing costs will be around 20% more than the listed price. For the properties we examined, priced under 10 million yen, our real estate agent quoted:

  • Brokerage fee 3% of sales price, plus ¥60,000
  • Annual property tax ¥50,000
  • Stamp duty ¥10,000
  • Title registration fee ¥250,000
  • Fire insurance ¥270,000

I’m expecting two additional fees before finalizing any transaction: 1) a fudōsan chōsa 不動産調査 (“real estate survey”), because building setbacks are non-existent, and encroachments between neighbors are commonplace; and 2) a structural inspection, because shiroari シロアリ (“termites”) can make the whole project untenable.

Fixing up an old house will be a big project, so it’s not something I’m contemplating lightly. Still, it is exciting to be part of the grass-roots community working to preserve Japan’s traditional architecture. And you just can’t beat the price.