Japan Residential Construction Market Size (2024 - 2029)

Japan Residential Construction Market Analysis

The Japan Residential Construction Market size is estimated at USD 263.66 billion in 2024, and is expected to reach USD 342.64 billion by 2029, at a CAGR of greater than 5.38% during the forecast period (2024-2029).

The COVID-19 pandemic has caused the construction of residential properties to be halted in Japan. This slowed the growth of the residential construction market in 2020, but it was picking up in 2021 and 2022.

Japan is rapidly constructing high-rise condominiums in urban areas while new residential areas continue to sprout up in the suburbs. On the other hand, at the same time, the number of vacant houses is increasing in Japan. This is because people have shifted their focus more toward purchasing second-hand homes and abandoned homes.

Condominium prices had reached 180.3, or 1.8 times the median, as of April 2022. According to the industry association, the average price of a new condominium per 70 square meters in central Tokyo in 2021 would be JPY 87.57 million, JPY 64.75 million in the surrounding metropolitan area, and JPY 59.43 million in Osaka. High-earning couples are said to be driving demand for such expensive homes, buying condos to live in, invest in, or reduce their inheritance tax burden. This increase in the cost of new units is also pushing up the cost of used condominiums.

Price increases in Japan's residential construction market are not always a result of greater demand. After all, as a result of the rise in work-from-home, some office space will be turned into flats, increasing the supply of apartments. For instance, the builder of Tokyo Station's "Torch Tower," the city's highest tower, recently revealed plans for 50 luxury apartments with monthly prices ranging from 1 to 5 million yen. The Real Estate Economic Institute predicted that 14,000 new apartments would hit the market in Tokyo's 23 wards in 2022, a rise of 1.4% from the previous year. This prediction indicates that 34,000 units will be made available in the greater Tokyo area (+4.6%).

Japan Residential Construction Industry Segmentation

Residential construction includes construction on single-family or two-family dwellings that are occupied or used or are intended to be occupied or used, primarily for residential purposes. One in which the architect uses materials to construct the complete structure according to customers' tastes and choices before selling it to the buyers at a profit. The Japanese residential construction market is segmented by type (apartments & condominiums, villas, and other types) and by construction type (new construction and renovation). The report offers market size and forecasts for Japan's residential construction market in value (USD billion) for all the above segments.