Expanding home restoration business revitalizes rental housing market in Japan

Expanding the restoration of homes into rental properties is revitalizing the rental housing market in Japan, a trend driven by an aging population and the resulting socioeconomic shifts. Saitama Resona Bank, located in Saitama Prefecture, has introduced a service to connect owners of vacant homes with companies specializing in real estate and related services.

This bank, situated near Tokyo, serves as a central contact point for these entities, which include a home demolition firm and a company specializing in the disposal of personal belongings.

In August, the bank organized an event to bring together these companies and approximately 130 owners of vacant homes. One such family appreciated the one-stop service, stating that consultations with experts and participation from various companies helped address their concerns. Saitama Resona Bank's Yasuyuki Ishii, who oversees the service, emphasized that a rise in vacant homes leads to a decline in societal wealth, and the bank aims to fulfill its responsibility to support local communities.

In 2023, the country recorded a record-high number of empty dwellings, totaling 9 million, due to the aging population. This situation presents an opportunity for businesses such as Saitama Resona Bank's service to tackle the increase in abandoned homes caused by depopulation, thereby generating demand for the home renovation market.

Yamori Corp., a Tokyo-based company, has acquired and renovated around 270 vacant houses across Japan for rental purposes. Yamori's President, Shotaro Fujisawa, highlighted the steady demand for single-family homes for rent and the importance of carefully assessing demand and enhancing the appeal of properties through refurbishment.

Yamori has also formed a joint venture with venture capital in Toyoma, a central Japan prefecture, to renovate abandoned homes into rental properties. The company is pursuing similar partnerships in Hakodate, Hokkaido. Daiwa House Industry Co., a major home builder, has been focusing on the redevelopment of residential estates developed during Japan's economic boom.

By partnering with local communities and municipalities, Daiwa House has successfully strengthened community cohesion and attracted young adults by updating shared facilities, creating new public spaces, and organizing recreational events. In Ishikawa Prefecture, the company offers rental housing for individuals considering relocating to the region, providing information on available homes for those who decide to settle down.