TOKYO: Next year, according to a recent estimate, Japan will have roughly 11 million unoccupied residences — slightly more than the entire residential stock of Australia. By 2038, under one scenario in the same forecast, just under a third of Japan’s dwelling units could lie empty.
A gloomy prognosis for Japan, where spooky, semi-abandoned rural villages already abound, but a portent of much bigger trouble, potentially, for China.
For many economies, “Japanification” may be a vague worry; where bubbles are concerned there is danger. And there’s a warning klaxon that Japan may now be sounding for China relating to the effect of demographics.
The “empty home” research by Nomura Research Institute (NRI) is the latest in a series on Japan’s property market that it and other organisations have generated over many years. Together, they describe an economic landscape that has not really recovered from the collapse of the late 1980s property bubble.
The trauma of that implosion, the failure of regulators to be tough with banks and the ill-composed stew of policies intended to nourish a recovery still cause pain, deflation and distortion.
AGEING AND SHRINKING POPULATION
An unavoidably big part of that arises from demographics. An ageing and shrinking population, with only a small offset from immigration, creates the basic structural pressure for a housing surplus.