Canada Wood Today | The Canada Wood Group

Japan Economy, Construction & Lumber Shipments

Shawn Lawlor

By Shawn Lawlor

Director, Canada Wood Japan

April 1, 2014


Signal Housing Industry Risks

This past March the LDP government tabled a revision to the Dispatch Worker Law which allows for temporary labour to be employed in all job categories, up from two dozen categories at present. With a majority in the upper and lower houses, the bill revisions are expected to pass, but the implications could be serious for Japan’s housing industry. At present temporary workers represent just over two thirds of Japanese workers, however, economists predict that percentage may jump to as high as half by the end of the decade.

What are the implications for the housing industry? If demand can be defined as the willingness to purchase combined with the ability to pay, Japan’s young working poor share neither. The average temporary staff earnings approximate to CAD $25,000 per year or between 40% to 50% less benefits than a typical salaried employee. Even if Japan’s rock bottom mortgage rates of less than 1.85% for fixed 35 year mortgages, low and unsteady incomes sidelines temporary workers from new home purchases. Home ownership statistics bear this trend out as the percentage of home owners in their 30’s declined to 38% from 53% since 1983.  Unsurprisingly, the temporary work structure has also been linked to low household formation numbers. While the increase in temporary workers may continue to sustain growth in apartments, they raise concerns as to where single family housing is headed. 


Total January housing starts increased 12.3% to 77,843 units for the 17th consecutive monthly gain. Total wooden starts increased 7.8% to 40,199 units. Wooden pre-fab declined 0.2% to 1,355 units. Total platform frame starts increased 6.6% to 8,700 units. For platform frame starts, single family custom built homes increased 13.5%, rental apartments increased 6.3%, but built for sale spec homes declined 4.5%.