Japanese Stimulus Package to Spur New Home Sales

Posted by Jim Ivanoff
May 10th, 2009
SekisuiHouse As in most other countries around the world, the Japanese government has been releasing stimulus packages to fight the effects of the US/European financial crisis. The latest proposed package included several measures to specifically promote home building, including record tax breaks on mortgages and an expanded gift tax break on assets passed on by the older generations so that their children can buy or renovate homes. These tax breaks are projected to have an economic impact of Y4 trillion (US$40 billion).

To gauge whether or not these incentives will have the promised effect, the Nikkei Newspaper recently interviewed the chairman of Sekisui House, Japan's leading home builder. During the interview Chairman Wada said Sekisui House predicts that if passed the stimulus package will create an additional 100,000 starts for the year and thus keep annual housing starts above the one million mark. However, considering the aging population and the environmental push to move away from the scrap-and-build model, Mr. Wada also said that it was inevitable that starts would eventually fall below one million. Therefore, Sekisui House plans to focus more and more on high-quality, energy efficient homes.

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