TOKYO (Reuters) – Japan seems to have the right mix for developing a vibrant short-term home rental market: a rapidly growing tourism industry, a cheap currency and – unlike many countries – eight million vacant homes.
Adding to the attractive business case is a reform-minded national government keen to loosen regulatory curbs and develop the market ahead of the Tokyo Olympics in 2020.
And despite some obstacles from local governments, home rental website Airbnb has listed thousands of properties in the hope of drawing tourist money, and others hope to follow.
“Tourists coming to Japan are on the rise, and there’s definitely the need for this type of service,” says Takashi Sagara, a manager at real estate agency Able Inc, which plans to connect home owners with an Airbnb-style service.
Business hopes have been fuelled in no small measure by Prime Minister Shinzo Abe’s push to cut red tape as part of his ‘Abenomics’ policies to jump start Japan’s long-stagnant economy.
While renting properties for long-term accommodation is legal, current rules on short-term rentals are strict: owners can’t legally let their homes without a licence, hotel-style reception desks and minimum room sizes.
Abe has proposed to relax these curbs. Along with looser visa rules and a substantially weaker yen, the move promises to add to the explosive growth in tourist arrivals and boost broader economic activity.
Rental homes offer an attractive alternative to pricey hotels, which in Osaka, for example, are often near capacity at weekend.
Visits to Japan jumped 27 per cent in the year to October to an estimated 11 million. The government is targeting 20 million tourists a year by the time of the Tokyo games.
With one in seven properties standing vacant in 2013, Japanese home owners are well placed to benefit from this influx. The vacancy rate, rooted in a declining population and a preference for buying new homes, could rise above 20 per cent within 10 years, says the Nomura Research Institute.
By comparison, less than four per cent of German homes are vacant. In the United States, whose housing sector was badly hit by the 2007 financial crisis, the rate is around 14 per cent.