The Japanese housing starts for August are in and they look good! Overall starts are up 20.5 % marking the first double digit growth in 22 months. More importantly this is the third straight month of gains so it now safe to say that the market has levelled off and is starting to regain some ground.
August’s surge was mainly due to a 44.6% jump in condominium starts. While single-family homes have been picking up for a while, condos have not shown a strong rebound yet. This might be the beginning and if so signals the return of many first time home buyers to the market. At the high-end, the Nikkei Newspaper has been reporting that luxury condos being built for both sale and rent are showing particular strength.
Other sectors also did well. Single family home starts grew by 16.1%, rental units by 23.1%, and spec homes by 40.9%. Looking at only wood framed construction, this translated into 21% increase: 2×4 being up by 22.8% and zairai up equally by 21%.
When looked at regionally, the numbers showed another surprising change. For August the growth was led by the Greater Osaka region which had been depressed for an extended period. The starts there jumped by 25.9%, followed by 19.9% in Greater Tokyo, and Greater Nagoya pulling of the rear with 10.9%. In fact, the rest of Japan which like Osaka has been very weak also topped Tokyo and Nagoya with an increase of 22%. It seems that the recovery from the major centers is finally starting to spread to other areas which is a good sign for the economy overall.