Market Overview

As the market goes through a long-term downward trend caused by declining population as well as the number of households and excess of residences, the new housing starts for FY2030 is projected to shrink by 13.5% from FY2022 to 744,600 units.

Although newly built home market is on the decline from the long-term perspective, robust demand is expected in the long run for repairing against aging degradation and for renovations to bring about more comfort in living spaces, which is likely to drive the market players that have mainly focused on newly built homes to shift to already-built ones.

Noteworthy Topics

ZEH (Net Zero Energy House) Rate Improves, Looking Ahead Its Becoming Mandatory after FY2030

In response to the declaration by the Japanese government that it aims to achieve carbon neutrality by 2050, the housing and construction industries have accelerated the advancement of energy efficiency in buildings. By FY2030, the industries target to raise the energy-efficient performances for newly built homes to the ZEH (Net Zero Energy House) * level, regardless of whether detached houses or condominiums. Therefore, newly built homes after FY2030 will naturally be at ZEH standard.

Major house builders have already developed their ZEH technologies, as can see from their products already responding to ZEH standards. In line with their own ZEH plans, each house builder is expected to achieve the rate of ZEH to be 100% by FY2030.

On the other hand, however, community-based, general building contractors tend to dispense with skills and knowhow on ZEH technologies. In viewing ZEH to become obligatory after FY2030, the following countermeasure options are indispensable: To establish the ZEH-specific expertise, to obtain the construction experiences, or to build a system to receive ZEH orders with some external support.

*A ZEH (Net Zero Energy House) is a dwelling that contributes to realization of carbon neutrality by introducing renewable energy such as photovoltaics thereby to make the annual energy income and outgo to zero, after achieving enormous energy efficiency through improved thermal insulation performance, etc.

Future Outlook

As the population continues to decline from the long-term aspect, the housing market size is on the shrinkage. New housing starts that maintains 800,000 units range in the beginning of 2020s are likely to decline to 700,000 units level by the 2030s, and to 600,000 units range by 2040.

In association with long-term decrease in housing demand, there may be a shakeout to be in progress among home suppliers and construction material and facility businesses. To survive in such a market environment hereafter, in addition to building a business portfolio that can expect growth and stability such as by shifting from the newly built home market to the existing house-related markets including renovation or by business development overseas, it is necessary to diversify the revenue sources such as by strengthening the commission-based business, like house sales mediation.

Research Outline