Summary Review of 2018 Japan Housing Starts
In 2018 total housing starts declined 2.2% to 942,370 units. Wooden housing fell 1.1% to 539,394 units. As a percentage of overall housing, wooden homes increased to 57.2%, the strongest showing in over three decades. Of all housing, post and beam starts were the most resilient: falling 0.5% to 409,873 units. Non-wood others starts fell 3.0% to 284,103 units. Platform frame starts declined 2.6% to 116,988 units. Wooden prefab fell 5.8% to 12,533 units and total prefab fell 5.5% to 131,406 units. In terms of relative market share prefab housing fell half a percentage point and 2×4 housing was essentially stagnant at twelve and a half percent.
In recent months, we’ve been seeing some strength in single family custom ordered and speculative housing starts as we lead up to the implementation of the consumption tax hike of 8% to 10% coming in October of this year. Market feedback is indicating that construction activity should pick up over spring and summer. The strength in single family housing is also leading to a recent slight increase in overall average wooden floor area. On the downside, the environment for wooden multi-family apartments has been challenging. One of the key things we are hearing is that in 2018 the Ministry of Finance implemented some tightening measures for regional lenders which is resulting in significantly higher mortgage down payments for property developers. These credit restrictions appear to be restraining multi-family starts and the issue could be with us for some time.