13% of All Housing Units Are Vacant

There are 47 million households and 54 million housing units in Japan. Please keep these figures firmly in mind. They are from the Ministry of Internal Affairs and Communications' "Housing and Land Survey Report" (2003). While this survey is conducted every five years and 2003 is currently the latest available, both the number of households and housing units have increased considerably since then.

What's concerning is that approximately 7 million housing units, or 13% of the total, are vacant and uninhabited. This means that 13 out of every 100 homes are empty.

Looking at the trends in housing units and households from the Ministry's statistics, housing units already exceeded the number of households by 2.62 million in 1978 (Showa 53). The market has been oversupplied for 30 years.

Indeed, over 90% of the thick flyers folded into newspapers are for apartment and detached house listings, and we receive persistent phone calls daily urging us to buy a home. The aggressive sales tactics from real estate agents even give the impression that they are cornered.

Following the Economic Principle of Supply and Demand

Amidst this oversupply, over 1 million new housing units are built each year. According to the economic principle that abundant goods become cheaper and scarce goods become more expensive, housing prices are unlikely to rise, except in very specific areas like city centers. We should expect them to fall rather than rise.

Furthermore, we must consider the clear trend of Japan's declining population. While the government predicted this would begin in 2007, it started even earlier, and companies in the housing industry are now seriously contemplating how to respond.

The Pros and Cons of Homeownership

Each of us must carefully assess housing market trends and, after thorough discussion with our families about both the advantages and disadvantages of owning a home, make a well-considered decision and take action.

While a home offers many benefits, such as being a place for family gatherings and a motivation for work, it also comes with the burden of loan payments that can last 25 or even 30 years.

How many people can confidently say they will have a stable income for the next 20 or 30 years? Moreover, it's unlikely that a property will sell for more than its purchase price. We should abandon the naive notion of relying on asset appreciation.

Though it may sound harsh, housing should be viewed as an asset that does not generate profit. We should cultivate the habit of calmly assessing the future.