With the spillover effects from the sluggish Japanese economy causing new housing starts to decrease, the number of vacant properties to increase and the move towards long-life housing, experts are predicting the number of new housing starts to fall below 800,000 units by the early 2020s.

The future estimate will fall to half of the level reported in 1996 when there were 1,630,000 new housing units. The number of housing starts in 2010 were 819,000 units.

According to Nomura Research Institute, The National Institute of Population and Social Security Research report on the future number of households has estimated that the number of households in Japan will increase until 2015, and will then shift to a decreasing trend. The decrease in the number of households will have the biggest affect on new construction.

The report estimated that the number of new housing starts will be 841,000 by 2015 and 834,000 by 2020. By 2023, housing starts will fall to 785,000. This is expected to lead to high competition between house construction companies, real estate companies and material suppliers that rely on new construction.

Source:
International Business Times, August 4, 2011.

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