Japan’s housing crisis is not a story of overbuilding or housing shortages, but one of decline and demographic shift. According to the 2023 Housing and Land Survey, Japan currently has approximately 9 million vacant homes, which accounts for around 13.8% of all dwellings in the country. This represents the highest vacancy rate since records began, and it has sparked significant concerns about the future of the nation’s housing market.

What Does the Vacancy Rate Really Mean?

To put it into perspective, 1 in every 7 homes across Japan is currently sitting vacant. However, what is often overlooked in media reports is that not all of these homes are truly abandoned or derelict. In fact, only about 3.85 million of the empty homes are genuinely abandoned or long-term unused. The remaining properties are either for rent, for sale, or are seasonal homes used for vacations or second residences. This distinction is important because it shifts the narrative from simply empty homes to the broader issue of underutilized or poorly maintained properties.

Why Are So Many Homes Empty in Japan?

Several factors contribute to the staggering number of vacant homes in Japan. The primary reasons include an aging population, urban migration, and tax incentives that previously discouraged the demolition of old structures.

• Aging Population: Nearly 30% of Japan’s population is over the age of 65, and this number is only set to increase in the coming decades. When elderly homeowners pass away, their properties are often inherited by family members who may live elsewhere or have little interest in maintaining the home. As a result, rural homes, in particular, are left unoccupied, further contributing to the vacancy rate.

• Urban Migration: Japan’s urban areas, particularly Tokyo, Osaka, and Nagoya, continue to draw young people seeking job opportunities. This mass migration has left many rural towns hollowed out, with vacant homes in smaller, depopulated areas. As young people leave for the cities, the population in rural regions declines, and homes become abandoned or underused.

• Tax Loopholes: Until recently, Japan’s tax system created an incentive to keep old, dilapidated buildings standing. Land taxes were lower if the structure remained standing, which meant that some property owners chose to leave houses in disrepair rather than demolish them. This system unintentionally led to the preservation of buildings that were no longer fit for use.

What Is Being Done to Address the Crisis?

In response to the growing issue of vacant homes, Japan has implemented several measures aimed at reducing the number of abandoned or neglected properties.

• The Vacant Houses Special Measures Act: Introduced in 2015, this law allows local governments to fine property owners of dangerous abandoned homes or even order their demolition. The goal was to tackle homes that posed a risk to public safety and the environment.

• 2023 Amendment: A new amendment to the law now enables local governments to target homes that are poorly maintained, removing tax breaks for properties that are left to deteriorate. This initiative is intended to encourage property owners to either maintain their homes or allow for their removal, helping to reduce the number of unsightly or hazardous buildings in communities.

• Akiya Banks (Vacant Home Databases): Another innovative solution that has emerged is the Akiya Banks, or vacant home databases. These databases, which have been set up across Japan, help connect potential buyers with vacant homes in rural areas. Homes listed in these databases are often available at low prices or come with subsidies for those willing to renovate and move to depopulated areas. This initiative aims to revitalize rural areas by incentivizing younger generations to settle down and breathe new life into abandoned homes.

The Bigger Picture: Japan’s Shrinking Population

The crisis of vacant homes is tied directly to Japan’s shrinking population. Japan’s population has been in decline for 15 consecutive years, with birth rates falling to historic lows. In 2024, Japan recorded the lowest number of births ever, further exacerbating the demographic challenges facing the country. According to experts, if these trends continue, Japan could lose nearly one-third of its population by 2070.

This population decline is reshaping not only the housing market but also Japan’s economy, infrastructure, and rural landscape. As more people age and fewer are born to replace them, the country faces significant challenges in maintaining its social systems and ensuring that rural communities do not become entirely deserted.

The consequences of these shifts are visible in the growing number of empty homes, which stand as both a sign of a changing population and a symbol of lost potential. The once-thriving villages, towns, and suburbs of Japan are slowly fading as residents move to cities in search of better opportunities, leaving behind an increasing number of abandoned homes.

A Nation at a Crossroads

Japan’s 9 million vacant homes serve as a stark reminder of the profound demographic challenges the country is facing. These homes are not just empty buildings; they are the echoes of a society undergoing rapid change. As the population shrinks and the demand for housing shifts, Japan must find innovative solutions to both preserve its rich cultural heritage and adapt to a future with fewer people.

While the government is taking steps to address the issue, the broader solution lies in encouraging people to settle in rural areas and reinvigorate abandoned properties. Through initiatives like Akiya Banks and changes in tax policy, Japan is slowly working to reverse this crisis. However, the long-term success of these measures will depend on the willingness of both the government and the people to embrace the future while preserving the past.