Invisible Vacant Apartments: Japan’s New Urban Akiya Problem

They may look new and lived-in, but thousands of condos sit quietly empty — distorting markets, stressing buildings, and exposing cracks beneath Japan’s real estate boom.

Despite headlines about soaring condo prices in Tokyo, Japan's real estate market is entering an era of deep structural contradictions. In a previous article, I explored how Japan’s aging demographics and the coming inheritance wave could flood the market with second-hand homes, especially across the Greater Tokyo Area. But while rural and suburban akiya get most of the spotlight, a newer, less visible crisis is unfolding in plain sight: urban condos that appear occupied but quietly sit empty. These “invisible akiya” reflect deeper structural issues in Japan’s housing economy. This piece unpacks the multifaceted crisis shaping Japan’s housing future, blending together grounded observations and insights drawn from leading voices in Japan’s real estate and financial commentary. Many of the themes explored here echo recurring insights from seasoned urban analysts like Tomohiro Makino, whose work continues to shed light on the unseen layers of the market. From invisible vacancies to foreign ownership risks, the trends reveal what’s unfolding behind the concrete skyline.

🏢 Rising Prices Mask a Growing Problem

Japan's real estate landscape is showing signs of fundamental instability. Rising construction costs, a prolonged low-interest environment, and intense demand in central wards like Meguro and Setagaya have pushed property prices to record highs. Yet beneath this surface boom, a silent crisis is emerging: invisible vacancy.

While traditional akiya in rural Japan are visible reminders of demographic decline, a new urban akiya crisis is unfolding in plain sight. These are units in newly built condos that are owned — often by investors or absentee foreign buyers — but sit unoccupied and unused.

🏡 The Rise of "Invisible Akiya"

Unlike countryside akiya, these condos appear pristine and lived-in. But lights stay off, mail piles up, and no one is home. This phenomenon creates the illusion of strong demand while masking a growing oversupply problem.

These hidden vacancies don’t show up in government statistics. As a result, developers continue to build, municipalities fail to intervene, and housing policy remains skewed toward an outdated growth narrative.

💼 The Quiet Decay of Aging Apartments

In addition to newly built, investor-owned condos, Japan is now facing a second wave of urban akiya: aging condominiums whose owners can no longer maintain them.

Many apartment buildings constructed during the 1980s and 1990s are approaching critical maintenance phases. As resident owners age, live on fixed incomes, or move away, management fees and repair reserves go unpaid. This weakens the ability of buildings to undergo essential renovations, and in some cases, units are abandoned entirely.

In suburbs like Chiba, it is now possible to buy an apartment for the price of a used car, often within a 10-minute walk from a station. These properties exist in plain sight — not because they’re undesirable, but because the buildings are deteriorating, poorly managed, or simply too old to attract new residents.

💸 Foreign Ownership and Financial Fragility

Absentee ownership by foreign investors adds another layer of complexity. When owners don’t reside in the property, they often neglect responsibilities like paying monthly fees or participating in collective governance. These gaps shift financial burdens to active residents, delay essential repairs, and compromise community functioning.

High-rise condos require long-term planning and significant capital for future upkeep. Without full participation, even newly constructed buildings can deteriorate faster than expected.

🌎 Global Shocks Meet Domestic Vulnerability

The global real estate picture is adding more uncertainty. In the United States, over $2 trillion in commercial real estate (CRE) loans are set to mature in the coming years. This is occurring alongside a dramatic shift in office space usage. many U.S. cities are now reporting vacancy rates above 20% for office buildings. Major cities like San Francisco and New York are experiencing a persistent decline in rental income for CRE owners due to hybrid work, which continues to reduce tenant demand.

office buildings, once stable income-generators, are turning into liabilities. When loan refinancing is required but property value has dropped significantly, banks face write-downs or even defaults. The situation is especially severe in cities where buildings are owned by REITs or highly leveraged private equity.

Japan is not an isolated market. Its large institutional players, including Japan Post Bank and real estate-focused REITs, hold overseas exposure and are impacted by global capital flow and sentiment. If confidence in commercial real estate continues to fall globally, Japan could experience withdrawals of foreign capital, reduced lending appetite domestically, or sudden markdowns in urban property valuations.

In a globally connected economy, what happens in the U.S. CRE sector has direct implications for how Japan’s high-rise market is financed, perceived, and priced.

Source: CommercialEdge National Office Report

Source: S&P Global Market Intelligence

📈 Looking to 2025 and Beyond

The year 2025 may mark a major turning point:

• Interest rates may rise, increasing monthly mortgage burdens

• More condos may hit the market, as silent investors try to cash out

• Public awareness of urban akiya will likely grow, forcing policy shifts

Meanwhile, younger generations are less interested in long-term mortgages. With falling birthrates and rising solo living, the demand model underpinning new condo construction is eroding.

🚫 A Mirage of Occupancy

The core issue is that Japan’s cities look fully occupied but aren’t. It’s a housing market that shines outwardly but is hollow within — a mirage.

This isn’t just about demographics. It’s about ownership structures, financial incentives, and data blind spots that together create a slow-moving, invisible crisis.

⚡ Final Thoughts: Urban Akiya Must Be Acknowledged

We can no longer treat akiya as a rural-only problem. The new frontier of vacancy lies in Tokyo’s towers, aging suburban condos, and oversupplied commuter neighborhoods. They are silent, modern, and easy to miss — until cracks start to show.

If you’re buying, investing, or even renting in Japan, look beyond appearances. Ask not just where the towers are, but whether anyone is actually living inside.

The biggest threat may not be a crash.It may be a quiet erosion hidden behind glittering glass.