On the Japanese Housing Market

I have long been fascinated in just how differently housebuilding is organised in different countries. And, amongst the world’s wealthy nations, nowhere marks a sharper contrast with the UK than Japan.

This week’s Economist runs a short piece about trends in the Japanese housing market. It starts with the counter-intuitive point that whilst the building codes now demand that new homes should be capable of surviving earthquakes, their typical lifespan is no more than 30 years. More than 60% of Japan’s homes have been built since 1980 and only 5% of the ones still standing were built before 1950.

The roots of this enormous turnover in housing may in fact be to do with earthquakes. The Japanese are used to having their homes wrecked every now and then by forces beyond their control, and so they have traditionally valued the land on which the homes sit, rather than the homes themselves. This is reflected in the legal system that separates the land from the buildings.

Whilst some of us marvel at the ability of the Japanese to re-invent their housing stock every generation, the Japanese themselves are worried by their profligacy and think it may be time to start building more durable structures. The Prime Minister, Yasuo Fukuda, is about to introduce new rules to encourage “200 year homes”, with tax breaks for houses that adhere to more robust building standards. But this is probably only a beginning of a lengthy process. Japan has no culture of buying old homes, no surveyors capable of assessing them, no mortgage lenders prepared to take risks on old homes, and no construction businesses that can maintain and repair them.

On the other hand, they have the capability of replacing their housing stock within a generation. If they introduced something like the Code for Sustainable Homes as part of their more robust details, they could make a huge impact on their national energy consumption and in a timescale that might have some meaningful effect on climate change.

In contrast, we replace so little housing in this country (under 0.1% per annum, as opposed to 3% in Japan), that our efforts thus far to green our new housing standards are destined to have negligible impact on our overall carbon emissions.