Skyrocketing wood prices and making homes more expensive than ever

Building construction costs in Japan continue to grow as economic sanctions on Russia have caused wood imports to stall. Prices are rising so rapidly that some new homeowners are having to choose between paying more or losing a spare bedroom.

Since the start of the pandemic, the so-called Wood Shock has seen the cost of raw materials increase due to supply chain issues and a surge in worldwide demand for new homes. The Russian invasion of Ukraine has only further exacerbated the situation. Russia has banned the export of wood veneer used in plywood. Last year, 82% or 294,000 square meters of Japan’s imports of this material came from Russia. According to the Ministry of Agriculture, Forestry and Fisheries (MAFF), the average price of a plywood board in Japan in March 2022 was 2,070 Yen, approximately 70% higher than it was 12 months ago.

Lumber wholesalers are facing rapidly dwindling inventory. There are concerns that low stock levels will not only affect home construction, but also the construction of apartments and office buildings. Some wholesalers are expecting supply levels to dry up by the summer.

The Japanese government is providing support to encourage the use of domestic wood, with 4 billion Yen set aside to cover transportation and procurement fees for timber processing companies using locally-sourced materials. The Forestry Agency is also looking at ways to encourage more reliance on domestic timber to ensure stability in the mid-to-long term.

Sources: 
The Yomiuri Shimbun, June 7, 2022.
The Nikkei Shimbun, May 21, 2022.

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