Summary of Research Findings

Housing starts in FY2021 increased from the previous fiscal year. The growth owes to the subsiding of pandemic restrictions, the demand recovery for detached houses in suburbs due to wide adoption of telework, and the rise of affluent dual-income couples that have strong will to buy houses.

Against the backdrop of wood shock*, housing prices are soaring in FY2022, especially for the detached wooden houses. Homebuyers are either giving up or postponing their purchase. Meanwhile, many consumers are shifting from built-to-order houses to ready-built houses developed by power builders that are less affected by the uptick in material prices.

Moreover, in line with the increase in the general level of prices, mortgage rate may also rise hereafter. On an assumption that consumers concerned about the mortgages will be inclined further to buy ready-built houses rather than built-to-order houses, housing starts of ready-built houses is expected to remain strong.
 

*Wood shock: A global surge in lumber prices caused by booming new housing starts mainly in China and the US during the pandemic, which drove up wood prices at an unprecedented rate.

Noteworthy Topics

Homebuyers Distance Themselves from Built-to-Order Wooden Houses Due to Soaring Housing Prices

Due to the rise in price of house construction materials, such as lumber and plywood, the price of built-to-order wooden houses are skyrocketing. The situation has increased the demand for low-cost houses and second-hand houses.

Additionally, there are other risks that might shift homebuyers away from built-to-order houses, such as the cost of high-performance houses like super-insulated and airtight houses (which makes the housing price higher) and the outlook that home mortgage is expected to rise.

Research Outline