Japan Housing Starts Drop Less than Estimated

Japan’s housing starts fell 0.4% yoy in January 2026, easing from a 1.3% drop in the previous month and beating market expectations of a 1.6% decline. It marked the third consecutive month of contraction, though the pace was the mildest since July 2024. Rental housing starts declined at a slower rate (-1.5% vs -3.4% in December). Meanwhile, owner-occupied homes rebounded (6.6% vs -1.8%), as did prefabricated housing (5.1% vs -6.1%). Starts for two-by-four homes also accelerated (8.7% vs 2.8%). In contrast, built-for-sale housing fell 4.8%, reversing a 1.9% increase in December.

Japan’s housing starts fell 1.3% year-on-year in December 2025, easing sharply from an 8.5% drop in the previous month and beating market expectations of a 4.1% decline. While marking the eighth contraction of the year, it was the mildest pace since September 2024. The slowdown reflected softer declines in starts for owner-occupied homes (-1.8% vs. -9.5% in November) and rental units (-3.4% vs. -5.5%). In contrast, built-for-sale housing returned to growth (1.9% vs. -11.3%), alongside a rebound in two-by-four homes (2.8% vs. -2.7%). Meanwhile, prefabricated housing contracted more sharply (-6.1% vs - 4.1%).

Japan’s housing starts fell 8.5% year-on-year in November 2025, missing market forecasts of a 0.4% increase and reversing a 3.2% gain in the previous month. It marked the seventh decline recorded this year, as weakness was broad-based across housing categories, including owned homes (-9.5% vs -8.2% in October), rented units (-5.5% vs 4.2%), built-for-sale homes (-11.3% vs 14.8%), prefabricated housing (-4.1% vs 9.2%), and two-by-four homes (-2.7% vs -3.8%).