Unoccupied houses perplex regulators in many countries. No more so than in Japan, where 8.5 million houses sit vacant – roughly 14% of the country’s overall housing stock. New Zealand has its share of ghost homes, too.
A story I read about the vast number of empty homes in Japan got me thinking about New Zealand’s ‘ghost homes’ and how they might in some way alleviate our housing shortage.
As Japan’s population shrinks, more properties go unclaimed.
There are approximately 8.5 million vacant houses (known as akiya) across the country, or roughly 14% of Japan’s overall housing stock, according to the country’s Housing and Land survey.
Other experts, including the Nomura Research Institute, put the number at more than 11 million, and predict that akiya could exceed 30% of all houses in Japan by 2033.
Japan’s housing market is different to ours
Houses in Japan typically decrease in value over time until they are worthless, with only the land retaining value.
Shifting building codes discourage owners from maintaining an aging house. Some homeowners die without ever naming an inheritor. And when an old house is sold, new owners typically demolish the existing structure and start fresh.
Unhappy local authorities consider tax
A recent law change in Japan allows local authorities to raise property taxes on neglected houses if the owners ignore requests to maintain or demolish them.
The government is also getting in on the act, approving a plan by the city of Kyoto, where some 15,000 houses sit empty, to tax the owners of those empty homes.
Local bodies across the country are also compiling lists of vacant houses for sale or rent, in some cases partnering with private-sector companies to promote listings.
New Zealand ghost homes
According to 2018 census figures (2023 census data is still unavailable), there were more than 39,000 unoccupied dwellings in greater Auckland – an 18% increase over five years.
The figure includes homes with no current occupants, unoccupied properties being renovated, baches, holiday homes, empty new-builds, and homes that aren’t up to government rental standards.
For perspective, London – population of 9 million – has just 25,000 empty homes, according to UK government data.
Tauranga also has thousands of ghost houses. Even the Queenstown Lakes District – the country’s capital of desperate home hunters – has more than 5,600 empty properties (mostly holiday homes, you’d imagine).
In the meantime, the housing crisis persists, and rental prices keep rising
Housing Minister Dr. Megan Woods is concerned about the number of empty houses but says the government does not have enough information about why owners aren’t filling their properties.
Some commentators say that taxing owners of empty properties might spark some action and disincentivise land banking. Others argue that property owners should be the sole arbiters of occupancy.
At Goodwins, we strongly believe that Minister Woods’ statement fails to acknowledge a substantial amount of anecdotal evidence. It first being important to contextualise that under the relatively newly introduced Residential Tenancies Amendment Act, landlords are now required to provide a specific reason for terminating a tenancy. Otherwise, a tenant’s right to renew takes precedence over the landlord’s ability to establish a fixed-term tenancy with a predetermined end date.
As a result, numerous properties that were previously available for extended periods throughout the year are now compelled to remain unoccupied, otherwise denying property owners the opportunity to utilize their own premises during set-seasons, for instance.
We have witnessed numerous instances across many years where both landlords and tenants expressed great satisfaction with fixed-term tenancy agreements, regardless of the landlord’s personal reasons for offering such terms. This flexibility allowed properties to be rented for varying durations while owners were away. A fixed-term end date should unambiguously signify the conclusion of a tenancy, unless both parties mutually agree to its renewal. And we believe this trend to lock-and-leave would be reversed.
In 2018 Labour Minister Phil Twyford ruled out an empty homes tax. Though he left the door open, suggesting that local councils, rather than the central government, should decide.
More recently, a Productivity Commission said a vacant land tax like the one passed in Vancouver, Canada (1% tax based on the empty home’s assessed value) would only have a “small and transitory” effect.
Economist Tony Alexander said there was “minimal chance” of an empty homes tax. “It comes across as too prescriptive and can only be a temporary salve to the bigger problem, which is high land prices, hefty council restrictions plus levies, and poor public transport infrastructure. I see no chance of such a tax in NZ.”
Take the stress out of signing up tenants. Click here to request an appraisal of your rental property. We’re happy to provide an expert estimation of rental return and outline processes to secure tenants. Call a Goodwins property manager on 0800 GOODWINS.