The Realities of Buying Unbuildable Properties in Japan: What Every Investor Should Know

For investors considering real estate in Japan: Purchasing unbuildable properties may seem

appealing due to their lower initial costs. However, there are hidden risks and important

considerations to be aware of.

This blog post provides a detailed explanation of how unbuildable properties work and

highlights the key points to keep in mind when making a purchase.

Knowledge is the key to smart investments. Read the article to equip yourself with the

insights needed to minimize risks and make informed decisions in the Japanese real estate

market.

Understanding Unbuildable Properties

(再建築不可物件) in Japan

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Unbuildable properties, known as “Saikenchiku Fuka Bukken” (再建築不可物件) in Japan,

refer to parcels of land where new construction is legally prohibited.

This restriction remains in place even if there is an existing structure on the land—once that

the structure has been demolished, and no new building can be built.

These properties are often located in areas where modern building codes and regulations

have evolved, making older properties　non-compliant with current standards.

Why Are Unbuildable Properties Priced Lower?

Unbuildable properties are generally priced lower due to the significant limitations

on their development potential.

Since new construction is not allowed, the future usability of the property is greatly

restricted, directly impacting its market value.

Additionally, these properties often face other challenges, such as inadequate road access

or being situated in zones with strict regulations, further diminishing their appeal.

?A common scenario involves properties that do not meet the road access requirements

outlined in Japan’s Building Standards Act　（建築基準法）.

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Toshihiko Yamamoto

CCIM, Licensed Agent