Demographics and development of housingIn the years following the end of World War II, Japan experienced a severe housing shortage. To meet the demand caused by the rapid increase in urban population, the government responded with a large-scale provision of public housing. New and cheaply built multistorey apartment building complexes made of concrete, called “Danchi”, became a symbol of prosperity during the period of economic recovery in the 1960s. The emergence of Danchi had an impact on lifestyles and led to the transformation of household structures. Multi-generational households living under one roof had been the norm in the pre-war period, but the mass provision of apartment buildings resulted in an increasing proportion of the population living in nuclear families.
Today, Japan’s population is rapidly aging and shrinking. A sharp population decrease is projected for the coming decades, accompanied by a rising share of single households, and a decline in the average number of members per household. The demographic shift is one of the reasons for a growing share of vacant and abandoned houses across Japan that is especially apparent in rural areas and has prompted the government to promote home renovations and the utilization of the existing housing stock.
Second-hand housing marketJapanese consumers have a preference for new homes, based on the widespread perception that dwellings have a short life span. This is partly due to the government’s emphasis on a quick supply of affordable housing at the expense of quality and durability during the period of rapid economic growth. Newly built homes quickly depreciate after construction and the low prospects of selling-second hand houses at a good price makes it unattractive for owners to invest in the maintenance and renovation of their homes.
Although Japan’s housing stock already surpassed the number households in 2018, a large number of new dwellings is put on the market every year. With pre-owned home sales only making up around 14 percent of new housing starts, Japan’s second-hand housing market is comparatively small.