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Japan Housing Starts Surge More-Than-Expected on Abenomics (1)

June 28, 2013

Japan’s housing starts rose for a ninth month in May, the longest streak since the period ended February 2011, as the government’s pledge to end 15 years of deflation fueled expectations for a recovery in property prices.

Construction companies broke ground on 14.5 percent more homes last month from a year earlier, according to a report released today by the Ministry of Land, Infrastructure, Transport and Tourism in Tokyo. Housing starts were expected to rise 6.1 percent, based on the median estimate of 24 economists in a Bloomberg News survey.

An unprecedented monetary easing under Bank of Japan Governor Haruhiko Kuroda and increased government spending under Prime Minister Shinzo Abe’s leadership have helped bolster consumer confidence. About 35 percent of 2,478 people surveyed in April by Haseko Corp. (1808), a condominium builder, said now is the time to buy a house, an increase from 30 percent in January.

“The biggest change after Abe is the expectation of asset prices and housing prices,” Masahiro Mochizuki, an analyst at Credit Suisse Group AG in Tokyo, said. “By purchasing real estate, people now have an opportunity to make profit.”

Housing starts rose to an annualized 1.027 million units in May, matching October 2008, the report showed. They were expected to rise to 950,000 units, according to the median estimate of 19 economists surveyed.

The Topix Real Estate Index, a measure of 43 property-related stocks, closed at a one-month high in Tokyo, rising 5.6 percent.

Tokyo Supply

In 2012, housing starts gained for a third year, up 6.2 percent and the fastest pace since 1996, after declining 22 percent in the 10 years to the end of 2010 from the previous decade, according to land ministry data.

They will reach as many as 940,000 units for the fiscal year ending March 2014, the highest level since 2008, according to an estimate by Hidetaka Yoneyama, a senior researcher at Fujitsu Research Institute in Tokyo.

The supply of new apartments in Tokyo’s metropolitan area this year will reach the highest level since 2007 to meet rising demand, according to an estimate by the Real Estate Economic Institute. The number of condominiums put up for sale will rise 9.6 percent to about 50,000 units in 2013, according to the Tokyo-based industry researcher.

In May, the offering surged 49 percent to 4,967 apartments from a year ago, marking the biggest gain in more than a year, the researcher said on June 17.

To contact the reporter on this story: Kathleen Chu in Tokyo at

To contact the editor responsible for this story: Andreea Papuc at

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