At 788,410, the total starts in Japan for 2009 came in at the lowest level since 1964. Ouch! Breaking down the numbers reveals that condos were once again disproportionately hit hard with a 43.8% fall. The only positive note within the condo segment is that luxury units in the Tokyo area seem to be gaining strength again which is an area we are targeting for members' products.
Wooden housing starts were down 18.3%, which is still a big drop and the reason we have seen many builders going out of business. While depressing, many industry observers have been saying for years now that such a shake-out was necessary as there are too many builders left-over from the bubble days fighting over fewer starts. This has caused fierce price competition and concerns over quality. The silver lining in these tough times will hopefully be an end to this deflationary cycle in the housing market.
The biggest bright spot in these recent figures is that it shows starts fell only 15.7% overall and wooden housing by only 4%. Condo developers have already been suggesting that they were expecting a turn-around in 2010 and these numbers suggest that the market is finally bottoming out.
Take a look at the full stats attached courtesy of the COFI Japan Office.