FX.co ★ Japan Housing Starts Fall the Most Since 2009

In May 2025, Japan experienced a significant 34.4% year-over-year drop in housing starts, a figure that fell well short of market predictions of a 14.8% decline and deteriorated further from the 26.6% decrease observed in the previous month. This represents the third month of decline in the current year and the most severe downturn since September 2009. The reduction in housing starts was evident across various categories: owner-occupied homes decreased by 30.9% compared to April's 23.7% drop; rental properties fell by 30.5% from a prior 27.9% decrease; built-for-sale homes saw a sharp decline of 43.8% from 29.7%; prefabricated residences dropped by 9.3% improving from the previous 20.5% decline; and two-by-four home starts decreased by 26.4%, an improvement from the previous 46.6% fall. Conversely, construction starts for issued units saw a marked acceleration, rising by 76.7% compared to the earlier 27.3% increase.