South Korea officially became a “super-aged” society with people aged 65 and over making up more than 20% of its population (10,244,550) as of last December. The United Nations classifies a society in which people aged 65 and over account for more than 7% of the population as “aging society,” and a society where this age group accounts for over 14% as an “aged society.” A society is considered “super-aged” when this proportion exceeds 20% of the population. In light of this demographic shift, ChosunBiz takes a look into businesses targeting senior citizens and global efforts to address the challenges of a rapidly aging society. The report takes a close look at Japan, which entered the super-aged category in 2004, 19 years ahead of South Korea.
In Japan, 13.8% of all residential properties are vacant. The number of abandoned houses in Japan surged to a record 9 million as of October 2023, up 510,000 from 2018, according to government data. Market analyses suggest that the actual number of vacant houses is even higher. Nomura Research Institute estimates that roughly 11 million homes in Japan are empty, and by 2033, vacant homes will account for over 30% of all residential properties.
Empty houses, known in Japan as “akiya,” are a symptom of rapid aging and low birthrates. Japan’s population, including foreign residents, stood at 124.352 million as of October 2023, according to Japan’s Ministry of Internal Affairs and Communications. The country’s population has been declining for 12 years since it peaked at 128.057 million in 2010. The number of people aged 75 and older increased by 713,000 during this period, surpassing 20 million for the first time. While the number of people aged 65 and older decreased by 900,000, they still account for a record-high 29.1% of the population.
By contrast, the number of newborns in 2023 dropped by 32,000 year-on-year to 799,000, marking the lowest birth rate on record for the eighth consecutive year. Japan’s total fertility rate stood at 1.2 in 2023, the lowest since records began in 1947, far below the replacement fertility of 2.1 children per woman to maintain the current population.
A rise in vacant houses can lead to sharp declines in surrounding property values. Data compiled by the Japan Akiya Consortium, a group of 14 companies and research institutions that aims to tackle Japan’s abandoned home crisis, are lowering the value of surrounding properties, wish losses reaching 3.9 trillion yen ($24.7 billion) over the past five years through 2023. Land prices within a 50-meter radius of empty houses had fallen, driven by factors such as overgrown weeds, pests, and concerns about public safety.
ChosunBiz interviewed Seigo Umemoto, CEO of Renobank, a Japanese real estate company that specializes in remodeling vacant houses, via email about the causes of Japan’s vacant home crisis and how his company is trying to turn these abandoned properties into livable spaces.
A graduate of the Chuo Graduate School of Strategic Management, Umemoto worked for 15 years in sales, strategy, and new business development at Recruit, a Japanese human resources company. In 2020, he joined FANTAS Technology, where he led new business initiatives, including vacant home projects and crowdfunding. In March 2023, he founded Renobank after acquiring Tas Reno, FANTAS Technology’s vacant home business unit.
Why did you start Renobank?
“Through my years working in business development, I became increasingly convinced that a company’s mission should go beyond generating profits and contribute to society. With this belief, I wanted to help address Japan’s vacant home crisis. At Renobank, we are attentive to customers’ needs, offer transparent renovation proposals, and help them create homes that align with their expectations.”
Renobank aims to reduce the number of vacant houses. Why are empty houses such a problem for Japan?
“Empty houses aren’t just an eyesore. They also pose public safety risks, as vegetation overgrowth and pests create hygiene concerns, while abandoned properties attract crimes such as illegal trespassing and fires. Old houses are also prone to collapsing. Vacant houses drive down surrounding property values, affecting entire neighborhoods.”
The Japanese government reported 9 million vacant homes as of late 2023. How are these homes categorized?
“Aikya are broadly classified into four categories in Japan. Around 4.43 million units fall under “rental,” 3.85 million units are categorized as “other,” 380,000 units are vacation homes and other buildings intended for seasonal or occasional use, and 330,000 units are up for sale. Among these, “other” vacant homes are at the heart of the problem. The ministry defines them as properties that are neither in use nor listed for rent or sale.”
What type of vacant homes does Renobank focus on?
“Renobank primarily targets the 330,000 for-sale vacant homes already on the market. Additionally, we aim to repurpose 1.9 million “other” vacant home, which is roughly 50% of the total. The key to solving this crisis is reducing the number of “other” empty houses. Many homeowners hesitate to sell vacant homes because they find the process cumbersome or are unwilling to invest in renovations. This is why providing financial incentives for these owners to put their properties on the market is crucial. Renobank seeks to reform the distribution structure of vacant homes by redefining the value of these houses.”
You mentioned financial incentives. But for homeowners, leaving a property empty doesn’t cost much, whereas renovating requires an investment. How can they benefit financially by choosing to renovate?
“As you pointed out, the financial burden of leaving an abandoned home untouched is minimal for homeowners. The primary costs are property taxes and city planning taxes, but they aren’t high enough to pressure owners into selling. This has contributed to the rise in vacant homes. To address this issue, the Japanese government has introduced several measures, including subsidies for demolishing or inspecting empty houses, an online platform for listing vacant homes for free, surveys to track abandoned properties, and incentives for businesses to engage in the vacant home market. Last year, a new law was enacted, eliminating property tax benefits for homes left vacant for too long.
Despite these efforts, the number of vacant houses continues to rise. This is why we believe offering financial incentives for homeowners to sell their homes is essential. If the buyer is a business, they can renovate and resell the property for profit. If the buyer is an individual, they typically remodel it for personal use. Some investors turn these homes into rental properties or vacation rentals to generate income."
What services does Renobank offer?
“We provide three main services. First, Tasurinobe is a real estate search website specializing in secondhand detached houses, including vacant homes. Our AI analyzes property data to estimate remodeling areas and costs, then suggests renovation methods to users. For most people, it’s difficult to estimate renovation costs based solely on the sale price of a used home. Tasurinobe allows users to gauge the expenses needed to make a secondhand home livable.
Second, KodatenoValue lets users input information about a vacant house, and our AI calculates its estimated sale price, rental price, and the remodeling costs required to make it rentable.
Third, the Vacant House Consultation Desk offers consultations both online and in person. This service is particularly useful for foreign investors looking to purchase vacant homes in Japan.”
While remodeling costs depend on the condition and type of a vacant house, what are the key areas typically renovated, and how much does it cost?
“Renovations mainly cover structure (pillars, walls, and roof), plumbing (bathroom, kitchen, bathtub, and sink), finishing materials (flooring, wallpaper, and ceiling), and other equipment (electrical panel and gate pillars). Typically, renovations are done when these components exceed their lifespan.
For example, remodeling a 30-year-old house could cost about 10 million yen ($69,000), while a 10-year-old house may require around 2 million yen ($13,800). Costs also vary depending on materials. The remodeling estimates provided by Tasurinobe are based on the most commonly available materials in Japan. Fully renovating an 80-square-meter apartment costs about 15 million yen ($103,500), but if only essential areas are remodeled, the cost can be reduced to 1 million to 3 million yen ($6,900–$20,700). Tasurinobe helps vacant home buyers make informed and cost-effective decisions by presenting various remodeling options.”
Of the 330,000 vacant houses on the market, who are the primary buyers?
“Buyers generally fall into two categories: companies that purchase vacant homes for remodeling and resale, and individuals who acquire vacant homes through brokers for renovation. While we don’t have exact figures, based on real estate listings, most buyers acquire vacant homes with the intent to resell them.
Companies looking to resell only purchase properties at below-market prices. If a vacant home’s owner is unwilling to sell at a discounted rate, the property remains unsold. Because of this structure, the number of vacant homes available for resale is limited.”
Doesn’t that make solving the vacant home issue through renovations impractical?
“That’s a sharp observation. As you pointed out, simply renovating vacant homes won’t solve the problem. But let’s consider alternative ways to utilize them—such as demolishing them to free up land, converting them into hotels or restaurants, or repurposing them for rental or private use. Among these, rental and personal use have the highest demand.
Renobank believes that facilitating the use of vacant homes for rentals or private residences can help address the issue. We also think individuals should be able to manage vacant home transactions just as companies do. That’s why Renobank provides tools to help individuals handle renovations on their own. By shifting the traditional supply chain from ‘vacant home owner → business → buyer’ to a direct C2C (consumer-to-consumer) model of ‘vacant home owner → buyer,’ we aim to streamline the market. This new approach could not only solve the vacant home problem more efficiently but also create greater value for both owners and buyers.”
What does Renobank see as the most effective way to reduce the number of vacant homes?
“As mentioned earlier, we believe enabling individuals to independently purchase and renovate secondhand detached homes is the most effective approach. This not only helps solve the vacant home problem but also gives buyers more choices and autonomy in the real estate market. Renobank provides the necessary tools and information to empower individuals to take a more active role in purchasing and utilizing existing homes.”
How many vacant home startups are there in Japan, and what sets Renobank apart?
“There are more than 100 startups focused on vacant homes in Japan. Several companies integrate real estate and remodeling, similar to Tasurinobe. However, Tasurinobe is unique in that it specializes in detached houses and allows users to search for properties directly on its website while providing remodeling cost estimates for each listing. There are very few platforms focused solely on detached homes, and as far as I know, Tasurinobe is the only service that offers an integrated real estate and remodeling solution for this segment.”
How many vacant homes has Renobank restored so far?
“Since our founding—dating back to our FANTAS Technology days in 2017 and continuing after Renobank was established in 2023—we have restored over 190 vacant homes, averaging about 27 homes per year.”
Do you have international customers?
“Yes. Our overseas customers include those looking to invest in vacant homes, individuals planning to relocate to Japan, and buyers seeking vacation homes. Some intend to turn their purchased properties into short-term rental accommodations.
Previously, Renobank provided services for international buyers through our website, but due to an unexpectedly high volume of inquiries, we have temporarily suspended that service.”
Vacant homes are also increasing in South Korea. Do you have any advice for the country?
(According to South Korea’s Ministry of Land, Infrastructure and Transport, as of 2022, there were 132,000 ‘vacant homes in need of maintenance’ that had been without electricity or running water for over a year. Of these, 61,000 were in rural areas experiencing severe depopulation.)
“It seems that, like Japan, South Korea’s real estate market primarily revolves around new housing, with little culture of remodeling secondhand detached homes. If my understanding is correct, stagnant circulation of secondhand detached homes could lead to a growing vacant home issue in South Korea as well.
To prevent this, it’s crucial for vacant home owners to list their properties on the market as soon as possible. As homes age, their value declines, making it harder to sell and exacerbating the vacant home problem. In Japan, the government took considerable time to assess the scale of the issue, during which many vacant homes lost value or became unmanageable.
To avoid a similar situation in South Korea, encouraging vacant home transactions should be the first step. By taking proactive measures early on, the country can prevent the issue from escalating and promote a healthier housing market cycle.”
