Japan has an increasing number of vacant homes and to fix this problem, they came up with a bizarre solution. They’re giving away the houses for free! Offering houses for free of charge might sound like a scam but the country is facing an unusual property problem – it has more homes than people to live in them.
Based on an article by CNN, Japan’s population is expected to decline from 127 million to about 88 million by 2065, according to the National Institute of Social Security. This only means one thing – fewer people will need houses in the future. As milennials leave rural areas for city jobs, Japan’s countryside has become haunted by deserted, “ghost” houses, known as “akiya.” To curb this issue, the country has set up the “Akiya” scheme to provide young families to get involved in the property market, where houses are given away for free, or at a cheaper price.
It’s also predicted that by 2040, nearly 900 towns and villages across Japan will no longer exist, and letting go of properties is a bid for survival.
The Akiya scheme
In the Akiya scheme, many sites are set up by local governments and communities to better manage the supply and demand for the growing stock of empty houses in their respective towns. As such, on this website, some homes are free, with the buyer having to pay only taxes and fees such as agent commissions.
“This is usually because the owners cannot take care of the property anymore or do not want to pay the property tax that applies in Japan for a home that they do not use,” said real estate site Rethink Tokyo in an October report, which was quoted in an article by CNBC.
However, such homes require major renovation because they’re old and run down. But some local government like Okutama prefecture subsidises home repairs for new Akiya residents and encourages Akiya owners to renounce their vacant properties by offering up to $8, 820 (S$12, 093) per 100 square meters (1, 076 sq feet). In Singapore, an average 3-room HDB new flat only cost S$4, 477 per 100 square meters.
But, it specifies that those who receive a free home or renovation assistance must be aged under 40, or be in a couple with at least one child under 18-years-old and one partner under 50. Besides that, the applicants must also commit to settling in the town permanently and invest in upgrading second-hand homes.
Despite an effort this extreme, giving away homes is tough in a country where people prefer new properties. Therefore, purchasing an Akiya house is considered to be a ‘social failure’ but it is still a viable option for many young families given that house prices in Tokyo is constantly rising, with each property costing almost S$1 million since January 2018.