Deportations for Depopulation for Deflation

Prices are not coming down. They are sticky. We may see some relief if energy input costs decrease, but we should hope for a plateau. A key is putting money into people’s pockets, but cash drops will fuel more inflation. What President Trump can do is attack the biggest monthly outlay for citizens that he knows well: real estate. He can do this by reducing demand with massive deportations, which will act like a quick depopulation. Doubters need only look across the globe for proof this works.

Housing takes up roughly one third of Americans’ paychecks, if not more. Deportations will affect demand, especially in cities. When population declines, the demand for housing decreases, which can lead to a drop in housing prices. Japan serves as a proof positive example of this phenomenon. Over the past few decades, Japan has experienced a shrinking population and stagnant housing demand, creating lower housing costs in many regions. Looking at Japan’s housing market statistics and demographic trends, we can see how population decline (in the form of mass deportations) can lead to more affordable housing.

Japan’s population has been in decline since its peak of approximately 128 million in 2008. As of 2025, the population stands at around 122 million and is projected to fall below 100 million by 2050. This demographic shift is driven by low birth rates, an aging population, and limited immigration. Unlike countries with growing populations fueled by open borders policies where demand for housing continues to rise, Japan’s population decline has created a surplus of housing in many areas, particularly outside major metropolitan regions.

In areas with significant population decline, housing prices have fallen dramatically. According to Japan’s Ministry of Land, Infrastructure, Transport, and Tourism (MLIT), the price of residential land in rural and suburban areas has been decreasing for over twenty years. That’s longer than a generation. Between 1990 and 2020, land prices in rural regions fell by an average of 50%. In some depopulated towns and villages, houses are so undervalued that they are offered for free or at nominal prices under programs like the “akiya bank” (vacant home bank), which matches buyers with abandoned homes. This is similar to some cities that have tax default land banks, but not rigged for investors.

This phenomenon is strong in rural Japan, where towns are shrinking due to an aging population and outmigration to cities. Cities have the jobs as their economy is a bit more concentrated than America’s. The abundance of vacant properties, or akiya, has led to an oversupply of housing. As of 2023, there are over 8 million akiya across Japan. This number is expected to rise to 10 million by 2030. The cities do see a slow growth in prices. While major cities like Tokyo and Osaka remain more expensive than rural areas, housing costs in these cities have stabilized or grown at a much slower rate compared to cities in the West. These cities build housing stock unlike many American cities. Japan has had a sluggish economy per Paul Krugman, but a lot of goods have stalled allowing people to catch up. The average condo price in Tokyo peaked in the 1990s during the economic bubble and only recently reached similar levels in 2020. California crashed and Millennials didn’t get even a decade to jump in.

If Trump deports a million illegals, many more will self-deport. This pulls demand down for housing across the nation. While some may argue that it affects cities more, this is not purely the case. Even if it did just affect cities, the lower demand in cities would not force out city residents who then bid up apartments and homes in the inner-ring suburbs. The knock-on effects ripple outward from the metro core.

Rents have rolled over in some markets, like Austin and Denver, but the illegals issue is everywhere. If rents do decrease by 10%, with an average two-bedroom renting for $2,000 a month, the savings is $200. The decreases could be even larger. Add in suburbs and little hamlets suddenly having to compete with lower city rents and worse commutes and now we have a bidding war for the remaining renters.

Eggs, chicken and milk, a dollar here and there, does add up. Seeing rent drop $100-500 a month will make fluctuations in groceries look like peanuts. We know the birthrates have been low since 2008, so there is not a flood of youngsters coming to bid up apartments. The Biden open border insanity was the driving demand for rents. There are downsides but this is one specific asset. It might be the Japanese deflation trap for one asset class, but after forty years of bubble fueled excess, it’s time to reward the renters of America.

-By Sam Dexter