Housing starts may drop to a 48-year low as a sluggish economy discourages home buyers, according to Takeo Higuchi, head of the country's largest home builder.
Annual starts could fall to 600,000 in "coming years," said Higuchi, chief executive of Daiwa House Industry Co. Starts are likely to drop more than 20 percent to 800,000 in the current year ending in March.
"The property market will remain sluggish for another year or two because Japan's economy is in bad shape," Higuchi said this week. "High unemployment and falling wages are scaring away many potential buyers."
The Osaka-based home builder, the nation's biggest by sales, is expanding in China and Vietnam as its business falls at home. Sales are forecast to drop 7.2 percent to ¥1.57 trillion in the year ending in March.
Last year saw 1.04 million housing starts, down from a peak of 1.9 million in 1972, according to data compiled by the Land, Infrastructure, Transport and Tourism Ministry. Starts of 600,000 would be the lowest since 1961.
Daiwa House is investing ¥30 billion on housing developments in Dalian and Suzhou in eastern China, and plans to invest ¥30 billion in Zhejiang Province.
