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Trends of building materials and house prices in Japan in 2023

[Jan 24, 2023]

 In 2022, we were busy dealing with supply constraints and soaring prices of materials (timber, building materials and equipment). I will explain the outlook for this material shock and housing price trends. (Excerpt from “Housing Industry Forecast 2023”)

The future of the material shock
According to a survey by the Ministry of Agriculture, Forestry and Fisheries in October 2022, cedar positive angle was 114,700 yen/m3, 84.6% compared to the same month last year. The price of Suginaka Maruta remained flat at 18,000 yen/m3, although the price has decreased by a little less than 20% from a year ago. The wholesale price of coniferous plywood (12 mm thick) in the Tokyo area has risen by 50% in one year to about 2,000 yen per sheet. It is also hovering at a high level due to a decrease in imports and a decrease in domestic production.

The 42 Nikkei Commodity Index, which is calculated from intercompany transaction prices, rose for the second consecutive month at the end of November last year. Domestic prices of materials, including construction materials such as wood and cement, are still rising due to the depreciation of the yen and soaring fuel and electricity costs.

Due to these factors, timber prices will continue to be on a high trend, and building material equipment prices will continue to rise until the first half of 2023. However, in the second half of 2023, material prices are expected to settle down temporarily due to a decline in demand due to the economic recession in Europe and the United States and the appreciation of the yen.

Rising house prices
In a survey conducted by Zenken Soren on the rate of increase in construction costs in July-August 2022, 47.1% of new constructions and 37.4% of renovations answered that they would increase by 20% or more compared to the same month of the previous year [top] . Many people at the site say that construction costs have increased by more than 100,000 yen per tsubo since the beginning of 2009.

If these prices are directly passed on, the customer-provided price for a new building order will change from the conventional 20 million yen to about 22 million yen, from 25 million yen to about 28 million yen, from 30 million yen to about 34 million yen, and from 35 million yen. It will be about 40 million yen.

If the price rises this much in a situation where wage increases are insufficient, it is only natural that customers would move to subdivisions and second-hand homes, as mentioned above. The number of wait-and-see customers will also increase.

Cost increased by 5.5% in one year
The increase in custom-built housing prices is clear from the questionnaire survey of the owners. The figure shows the results of Recruit's annual survey of custom-built housing costs. The average price rose 5.5% from 29.88 million yen in the previous year to 31.53 million yen.

: s-housing.jp