There are 5 million abandoned homes and apartments in Japan while housing prices go up

abondend home Not having a clue what the Japanese government is thinking or how its self-protective bureaucracies operate relative to real estate and property ownership in Japan, I’ll leave that up to “economic experts.” Not that I really want to know anyway. Economics frighten me. There are approximately 5 million abandoned homes and apartments in Japan and from what was explained to me, these houses are left standing because if the property was vacant of buildings the owner would be liable for a higher tax. The average price for a house around where I live depending on proximity to the train station, go anywhere from ¥20 million (US$200,000) on up to ¥40 million (US$400,000) for basically wood boxes with electric conduit and water lines hooked up. Most Japanese take out a 35 year mortgage to pay for these small wooden boxes at low interest while there are 5 million abandoned homes and apartments doesn’t make sense to me as being very efficient for the Japanese who it is said are “extremely efficient people”? And many homes for sale in equally bad condition and old as the one in the image would sell for between ¥10 million and ¥15 million if a buyer could be found. The other economic aspect hard to comprehend, is the fact that Japan’s population is decreasing with the lowest birthrate on record in 2014 and with decreasing consumer prices, while at the same time housing prices are gradually going up.

A “target” by the Japanese government includes in a new 10-year national housing plan drawn up by the Ministry of Land, Infrastructure, Transport and Tourism. Just because it is claimed as being a “target” doesn’t necessarily mean anything will substantially change since Japan’s population are rapidly aging with an elderly population probably not being too motivated to move on their properties. The plan was presented at a meeting of the ministry’s Panel on Infrastructure Development recently and is up for cabinet approval in March, 2016. What the Japanese government will probably do, is just take over the control of these abandoned homes and depending on their condition, rip them down despite what property owners do. And it is ludicrous to suggest many of these abandoned homes couldn’t be remodeled. In fact, there is a television program that features home owners paying millions of Yen to have their old homes remodeled by a professional house designer.

To meet the 4 million target of abandoned homes from its current estimated level of 5 million, the government plan calls for “bringing some abandoned houses and apartments back to the housing market and removing others”. It also proposes offering such houses and apartments to low-income earners and child-rearing families. I don’t have much confidence in this plan – another plan – because it would mean cooperation with rental agencies throughout Japan and it isn’t very likely they would move to support this plan. It would probably risk their profits. What does this suggest to the younger generation in Japan who just celebrated their coming of adulthood when they are trying to find the cheapest restaurant to celebrate their adulthood with their friends when there are 5 million abandoned houses and they are without very good job prospects? What do these young adults think about their future, including possibly marriage then securing a 35 year mortgage on a wooden box that is worthless at the end of those 35 years? And as of late with all the foreign tourists visiting Japan; this seems to be the only thing earning serious income for Japan at the moment.

Advertisements