Slowdown in Japanese housing expectedFriday 13 Dec 2013 Housing starts in Japan continued to move up in 2013 to ~920,000 units (from 883,000 in 2012). Japan’s consumption tax will rise from 5% to 8% in April 2014 (new houses were required to have a formal contract in place prior to the end of September 2013 to avoid the increased tax). As a result, a slowdown in housing is expected for 2014, as much of the pent-up demand for new homes is already under contract.Japan continues to increase its self-sufficiency in wood demand through the harvesting of its maturing forests; it is currently close to 30%, and the government’s goal is 50%. However, Japan’s timber harvesting faces many issues, including inefficient logging practices, an aging workforce, a lack of efficient domestic sawmills, fractured land holdings, etc. After several years of steady decline — from 21.8 million m3 in 2004 to a low of 14.4 million m3 in 2009 (-34%) — Japanese consumption has grown consecutively each year from 2010–2013. Given the likelihood of reduced housing starts in 2014 due to a general slowdown, and the impact of the consumption tax (starting in Q2/14), demand is forecast to move from 16.7 million m3 in 2013 (10.3 billion bf net, or 7.0 billion bf nominal) to 16.2 million m3 in 2014, and to 16.0 million m3 in 2015. The Japanese government introduced its Wood Points program on April 1, 2013. The program was designed to increase the supply and usage of domestic forest products from 20 million m3 in 2011 to 28 million m3 by 2015. The program has a massive budget of ¥41 billion, and subsidies for domestic wood use could potentially be extended to cover more than 135,000 new homes (in 2012, total wooden housing starts totalled 486,756 units). This program could impact imported lumber, as Japanese buyers are rewarded by using the Japan forest resource (which is heavy to second-growth) at the expense of imported wood. Source: International Wood Markets Group, www.woodmarkets.com |
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