According to the latest data from the Ministry of Internal Affairs and Communications’ Statistics Bureau, the total housing stock across Japan increased by 3,050,000 units to 60,630,000 units in 2013, up 5.3% from the previous survey in 2008.
Vacancy rates
The number of unoccupied residential properties increased by 630,000 units to 8,200,000 units, up 8.3% from 2008. The nationwide vacancy rate increased by 0.4 points to 13.5% - the highest level seen since record-keeping began in 1963. It is important to realise that these figures include homes that are vacant for a number of reasons. For example, 5.0% of the vacant properties are vacation homes, 3.8% are empty because they are currently for sale, and 38.8% of homes were vacant for other reasons (eg. due to the residents transferring for work, being hospitalised, or because the homes are in the process of being demolished). 52.4% of the vacant homes were rental properties that were sitting empty.
Risk of over-supply
From 2015, inheritance tax deductions will be reduced. As a result, investors have been actively purchasing or building rental apartments as a way to reduce their future inheritance taxes (inheritance tax on real estate is calculated on the tax value of the building and land, which is usually lower than its true market value, while the tax on assets such as cash or stocks is based on its face value. There are also deductions for real estate that is currently rented to a tenant). There is a risk that this trend could lead to an over-supply of rental properties in central areas.