Housing starts in Kyoto Prefecture saw a year-on-year drop of 13.1% in 2017 to 14,790 units, the second lowest level seen in the past 10 years. This is also the second year in a row to see a decline in new construction.

This has been attributed to a steep rise in the construction of hotels in Kyoto’s city centre, with developers choosing to focus on building hotels rather than apartment buildings. Construction of apartments has halved as a result. The tourism boom and demand for hotels has put pressure on land prices, causing them to reach a level where the land is no longer profitable for an apartment development. 

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