Incentive programs put in place as part of Prime Minister Shinzo Abe’s plan to boost the Japanese housing market have done just that, however the benefits are largely skewed toward new home builders and buyers, thus Japan is sitting on an increasing supply of decaying, abandoned homes.

Housing Stocks

For months we have witnessed a succession of positive data points pointing to victory for Abenomics with negative stories few and far between. However, the plight of the secondary residential housing market in Japan appears to be one that should be of great concern. The policies enacted thus far have essentially incentivized builders to build new homes, buyers to buy new homes, and all of the activity to be in urban areas. The result is an astounding decline in suburban and rural populations and an overhang of second-hand home supply, exacerbated by an aging population, that isn’t seen in any other developed nation.

Home vacancy in Japan, estimated at about 18 percent of housing nationwide, may reach 24 percent by 2028

In the U.K., just 2.3 percent of dwellings are vacant… 11 percent of homes in the U.S…. 2.6 percent of Japanese homes were vacant in 1963

With 57 million homes in Japan as of 2008, the last time the government counted them, at least 570,000 homes without occupants are accumulating every year

About 20 percent of residential areas in Japan will become ghost towns — devoid of population — by 2050

Transactions of previously owned homes account for 14 percent of the total in Japan, according to the land ministry. That compares with 90 percent in the U.S., 86 percent in the U.K. and 64 percent in France.

The video below from Bloomberg focuses on one town that is an example of the unintended consequences of Abenomics. Inariyato is facing a declining and aging population while the supply of vacant homes grows and values of inhabited homes sinks. The town sits just an hour from Tokyo, yet is one of those on the verge of becoming a “ghost town.”