On June 28th, the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) released updated Japan wide housing start statistics for May 2024.
The number of new housing starts in May was 65,882 units, a 5.3% decrease compared to the same month last year, marking a decline from the previous month's increase.
The total floor area of new housing starts was 5.198 million square meters, also down 5.3% year-on-year (YoY).
Broken down by property type measured:
Custom built single-family home (SFH) starts:
17,217 units (8.7% decrease YoY), continuing a 30-month downward trend.
Rental starts:
27,175 units (5.3% decrease), reversing last month's YoY increase.
Strata-Title Condos / Subdivided SFH:
21,207 units (0.9% decrease), also reversing the previous month's YoY increase.
Within this category:
Condo unit starts increased by 13.2% to 10,976 units, marking two consecutive months of YoY growth.
Sub-divided SFH starts fell by 13.0% to 10,105 units, continuing a 19-month YoY decline.
Looking at Japan’s three major metropolitan areas, the data is as follows:
Greater Tokyo Area Starts:
Total: 24,684 starts (6.8% decrease YoY)
Custom built SFH starts: 3,552 units (12.0% decrease)
Rental starts: 10,198 units (13.7% decrease)
Strata-title starts: 10,810 units (3.6% increase)
Greater Nagoya Area (Chubu) Starts:
Total: 7,165 starts (3.5% decrease YoY)
Custom built SFH starts: 2,630 units (0.3% increase)
Rental starts: 2,362 units (11.4% decrease)
Strata-title starts: 2,151 units (2.1% increase)
Greater Osaka Area (Kinki) Starts:
Total: 11,149 starts (4.7% increase YoY)
Custom built SFH starts: 2,178 units (6.7% decrease)
Rental starts: 5,242 units (16.7% increase)
Strata-title starts: 3,704 units (2.2% decrease)
Why are housing starts important?
Housing starts are an indicator of builders' readiness to invest in new projects, reflecting their expectations of housing demand.
This trend can provide valuable insights into market confidence and consumer sentiment.
The housing market plays a vital role in the economy, significantly impacting the banking, construction, and real estate sectors.
The health of this sector also influences employment levels and the prices of key commodities like lumber and copper.
Further Reading:
MLIT May 2024 Japan Wide Housing Start Excel
Sources:
R.E. Port News (Japanese only)
MLIT May 2024 Housing Start Release (Japanese only)
