Is the 2×4 apartment market in danger?

Posted by Jim Ivanoff
December 30th, 2008

For almost a year now rumours have been flying around about the 2×4 apartment market in Japan as the founder of Daito Trust began actively trying to sell his stake in the company. Did the pioneer of this market know something that made him want to get out or was he just planning his retirement? As apartments have come to make up almost 70% of the the 2×4 starts in Japan, this is a very serious question for Canadian suppliers. Recently another dark cloud has appeared over this market. 

The recession in the United States has hit Japanese exporters hard and as a result these companies are laying off contract and temporary workers. Some Japanese automakers have already announced that they will cut all such non-lifetime staff by the end of the fiscal year. It is these workers that helped exporters quickly ramp up production when sales were surging and in order to keep up with demand many companies had to entice workers to move from other parts of Japan or even from overseas. 

As these people came to work temporarily in rural areas around factories, they were a major target for the 2×4 apartments which are typically built on unused farmland. Now that these people are losing their jobs they have little reason to stay and will most likely move back to their hometowns. This will of course mean that a lot more apartments will become vacant for extended periods thus giving landowners little incentive to put up new ones. If so, the meteoric rise of the 2×4 apartment market may have already seen its peak.

By Jim Ivanoff
BC Wood Japan Office
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