Opportunity and Challenge Changing Housing Market in Japan : Opportunity and Challenge Changing Housing Market in Japan
January / February, 3003
Kuraishi Fumiaki
Advisor in charge of the Asia Builders’ Week
Japan Management Association (JMA)
Former General Manager of JETRO Housing Materials Center (Osaka)
Outline : ( Outlines )
1. Still the Second Largest Housing Market
2. Characteristics of Japanese Housing Market
3. Regulatory Changes in Recent Years
4. Steady Growth of Imported House
5. Imported Building Materials
6. Changing Attitude of Consumers and Home Builders
7. Potentials: Renovation, Home Centers, Resort Homes Outline
The Second Largest Housing Market : Source: National Countries (OECD) Account of OECD The Second Largest Housing Market
Housing Situation in Japan anｄ US : Source:US Census Bureau（2000）, Survey of Housing Loan (fiscal year 2000) by Government Housing Loan Corporation Housing Situation in Japan anｄ US
New Housing Market : New Housing Market
Reasons of Decline of New Home Market : 1. No Growth of Population ( Numbers of Family)
2. Enough Numbers of Homes (50.3million homes for
43.9 million families): But Quality, not Enough
3. Depressed Economy Source: Census of Housing and Land( latest 1998)
by Ministry of Construction Reasons of Decline of New Home Market
Difficult Time for Home Builders : Giant Home Builders (Prefab Home)
Ex. Sekisui House(60,996 units /year )
Daiwa House Industry (34,695 / year)
Misawa Home ( about 30,000/year)
Medium to Large Home Builders(1,000~5,000/year)
Medium size Home Builders (100~1,000/year)
Small & Medium Home Builders (less than 100/year)
Most of 130,000 Small builders ( built 5~10/year) Difficult Time for Home Builders
Competitive Market Force Big Companies to go Merger and Acquisition, Joint Ventures and Collaborations : Competitive Market Force Big Companies to go Merger and Acquisition, Joint Ventures and Collaborations Ex.
TOSTEM and INAX
set up a common holding company
TOTO and MATSUSHI DENKO
started business collaborations
MISAWA HOME and PAINT HOUSE,
joint remodeling business
Construction of Condos (Mansions ) boomed in the past 3 Years : Construction of Condos (Mansions ) boomed in the past 3 Years 166 192 218 223 (1,000 Units)
Low Cost Housing : Low cost houses are getting popular initiated by
”Limited 25”of Misawa Home in 2001
500,000 Yen / tubo( 3.3 ㎡）→250,000 Yen / tubo
2. Followed by other medium size home builders and
franchise home builders
3. With stagnant economy, Japanese consumers can not endure high amount of home loan (used to be 4 or 5 times of their annual income). Low Cost Housing
Characteristics of Japanese Housing : Characteristics of Japanese Housing Shorter Life
Price is too High
Quality, such as Energy Efficiency is not high
Resale Value of Home declines to almost Zero in 20 years
Characteristics : Shorter Life : Source: White Paper of Construction 1996 (Ministry Of Construction) Characteristics : Shorter Life
Characteristics (Japan) : Characteristics (Japan) First Generation Second Generation Third Generation
Characteristics (Western Europe) : Characteristics (Western Europe) First Generation Second Generation Third Generation
Regulatory Changes in Recent Years : Regulatory Changes in Recent Years Next Generation Energy Conservation Standard (1999)
Revision of Building Standard Law(2000)
Housing Quality Assurance Law (2000)
Next Generation Energy Saving Standard (1999) : Next Generation Energy Saving Standard (1999) Stricter Energy Saving Standard closer to the R-2000 Standard of Canada, which was introduced in 1982
Enhancing the importance of insulation and air tightness
Positively affected to Imported Houses and Building Materials
Revision of Building Standard Law(2000) : Revision of Building Standard Law(2000) Shift from Prescriptive( Specification) Code to Performance Building Code
Interim and Final Building Inspection
Setting Up of Private Building Inspection Bodies
NOTE: Enforcement Order of the BSL(Relating to Indoor Air Quality) will be enforced in July 2003
Housing Quality Assurance Law (2000) : 10-year Warranty on Defects on Principal Structures
Housing Performance Indication System
Nine Performance Indicators (Entirely Voluntary)
Establishment of Housing Dispute Resolution Bodies
Housing Quality Assurance Law (2000)
Nine Performance Indicators : Nine Performance Indicators Structural Stability
Fire Safety
Minimizing Building Deterioration
Easy Performance of Building Maintenance
Thermal Emvironment
Indoor Air Quality
Light and Visibility
Noise Control
Accessibility to the Elderly or the Disabled
Steady Growth of Imported House : Steady Growth of Imported House
The First Imported House in Kobe Imported from Portland Oregon in 1925 : The First Imported House in Kobe Imported from Portland Oregon in 1925
Origin of Imported House(2000 F. Year) : Origin of Imported House(2000 F. Year) Source: Imported House Survey by METI, MLIT , JETRO, Japan 2x4 Builders Association and Imported House Industry Organization in 2002
Seattle Vancouver Village in Kobe : Seattle Vancouver Village in Kobe
Seattle Vancouver Village in Kobe : Seattle Vancouver Village in Kobe
Sweden Hills in Hokkaido : Sweden Hills in Hokkaido
Imported Houses in a Small Lot : Imported Houses in a Small Lot
88%of Imported house, 2x4 or other Panel Structure : 88%of Imported house, 2x4 or other Panel Structure
Imported Houses are Cheaper : Imported Houses are Cheaper 0,000 yen/ tubo( 3.3 ㎡）
Imports of Housing Materials 99~02 (million yen) : Imports of Housing Materials 99~02 (million yen) 1999 2001 01/99
Prefabricated Building (Package House) 19,299 23,108 20%
Solid Wood Flooring 15,023 17,599 17%
Wood Windows & Frames 6,108 5,622 -8%
Wood Doors & Frames 11,711 12,226 4%
Structural Laminated Lumber 15,104 25,113 66%
Plastic Windows & Doors 3,076 3,402 11%
Glazed Ceramic Tiles 2,906 4,328 49%
Lumps & Lighting Fittings 30,103 43,814 46% Source: Japanese Trade Statistics
Positive Trend of Japanese Housing Market : Changing Consumers
Half of Home owners are not Satisfied
More information (mass media and internet)
Awareness of quality of housing( more
information)
Durability
Design
Healthy house
Energy efficiency
Barrier free
Cost consciousness Positive Trend of Japanese Housing Market
47.5% of Families are not Satisfied with their Home : Source:Housing Demand Survey by Ministry of Construction(1998) 47.5% of Families are not Satisfied with their Home
Positive Trend of Japanese Housing Market : Changing Attitude of Homebuilders
Crisis of losing business in the future
Changing attitude toward imported
building materials
Looking for New Building Products and
Technologies
Cost consciousness
Positive Trend of Japanese Housing Market
Survey of Home Builders : Imported Housing Materials also used
for Post & Beam House s and Remodeling Users Survey of Imported Housing Materials 1999
by JETRO Housing Materials Center Osaka(JHMCO) Survey of Home Builders
Client’s (Consumers) Demand is More Important : Question: What made you use imported materials for the fist time ?
Users Survey of Imported Housing Materials by JHMCO Client’s (Consumers) Demand is More Important
Design, Function & Price are Important : Question: Why did you choose imported materials?
Users Survey of Imported Housing Materials by JHMCO Design, Function & Price are Important
Problems of Using Imported Housing Materials : Delivery Time 57
Quality of Materials 31
Maintenance 29
Inaccuracy 29
Treatment of Defects 27
Response to Complaint 21
Standard and Regulation 18
Installation 14
Small or No Stock in Japan 7
Lack of Knowledge 7 Question: Please specify problems of using imported materials ?
Users Survey of Imported Housing Materials by JHMCO Problems of Using Imported Housing Materials
Survey of Home Builders : Question: Are you going to use imported materials again?
Users Survey of Imported Housing Materials by JHMCO Survey of Home Builders
Interested Items by Visitors to Japan Home Show 2002 : Interested Items by Visitors to Japan Home Show 2002
Interested Items at JHMCO 2002 ( Consumers and Business ) : Interested Items at JHMCO 2002 ( Consumers and Business )
Popular Items In JERTO Housing Materials Center（Osaka) : Popular Items In JERTO Housing Materials Center（Osaka)
Canadian Hardwood Flooring : Canadian Hardwood Flooring
Swedish Ventilation System : Swedish Ventilation System
American Wooden Windows and Doors : American Wooden Windows and Doors
Italian Tiles : Italian Tiles
Swedish Triple Grazed Wood Windows & Doors : Swedish Triple Grazed Wood Windows & Doors
Home Improvement and Renovation Market to Grow : Home Improvement and Renovation Market to Grow ( 7.3 8.0 8.7 9.3 ) Source: Ministry of LIT( Construction)
Ratio of Home Renovation to Housing Investment is much Smaller in Japan : Ratio of Home Renovation to Housing Investment is much Smaller in Japan ( 40.9% 44.7% 55.0% 65.1% 10.9% )
Source: Ministry of Land, Infrastructure and Transport
Renovation Market is Expected to Grow : Renovation Market
Opportunities for Imported Housing Materials
(Lesser extent of Regulatory Restriction )
Consumers’ Preference can be easily Reflected
（Fear of Potential Large Scale Earthquakes in Kanato, Tokai
and Nankai area)
Renovation Market is Expected to Grow
48% of Wood Structured Detached 2F Houses , judged Very Dangerous at time of Large Earthquake : 48% of Wood Structured Detached 2F Houses , judged Very Dangerous at time of Large Earthquake
Percentage of Dangerous Wood Structured 2F Houses
Houses built before 1980 82%
Houses built after 1981(Revised BSL) 33% 66% of People said They can not Spend more than 1 million yen
(about US$ 9000) for Renovation of these Dangerous Houses Research was concluded in June 2002 by Japan House Renovation
for Earthquake Organization. 45,000 houses( Average 31 years old)
Home Center to Play an Important Roles in Home Improving Market : Home Center to Play an Important Roles in Home Improving Market More numbers of Aged Consumers to
have more Free Time
DIY for Enjoyment and Money Saving
Home Renovation may be done by Home Owners
Small Home Builders started to use
Home Centers more
Home Centers handle More Housing Materials than 5 years ago : Home Centers handle More Housing Materials than 5 years ago
Consumer's Preference of Next Home : Consumer's Preference of Next Home Survey of Consumer’s Preference of Next Home 2002 by
“Gekkan Housing “ (Housing Monthly) of Recruit Co.
Summary : Summary １．New Housing Starts, No Growth
2. Imported Houses will Steadily Increase
3. Imported Housing Materials continue to be Used in Japan
4. Competition in Building Materials will be intensified (China ?)
5. Renovation Market and Condos (Mansions) will be a Factor
6. Quality of Multi Family Housing in Japan is still very Low
7. Changing Attitude of Consumers and Home Builders
8. Home Center may be playing an important role
Summary : Summary Important KEY Words for Marketing in Japan
Sustainable and durable Housing( For Three Generations)
Energy Saving and Environmentally Friendly Homes
Healthy Housing
Barrier Free Housing ( for the Elderly and Disabled)
Safe Housing ( Structural Strength against Earthquake)
Safe Homes ( Protection of Robberies and Pickings)
Some Suggestions : Some Suggestions More Value Added Housing and Building materials
(Promotion of Design, Function, Performance, Technology,
Science of Home Building, Experience of Elder Care Home)
More Education for Consumers is Important
More Publicity toward Consumers and Small Builders
Finding Good Partners (Person) is Important
Continuous Presence in Japan is very Important
(Visiting Japan and Communicating with Your Clients and Exhibiting in Japan Home Show Etc.) Thank you very much for your attention