Housing starts across Japan climbed 18.6 per cent in June for a third straight monthly rise, with the recovery missing the two-by-four segment built on imported dimension lumber, where starts fell 7.4 per cent. That is according to data the Ministry of Land, Infrastructure, Transport and Tourism released yesterday, which shows owner-occupied, rental, and built-for-sale housing all rising, while the platform-frame trade went the other way.
Economists had expected a 12.8 per cent rise, with the stronger result still slowing sharply from May’s 33.9 per cent surge as owner-occupied growth eased to 15.7 per cent from 31.8, rentals to 24.6 from 33.3, and built-for-sale homes to 14.2 from 39.2. Prefab housing swung 13.7 per cent higher after a 3.4 per cent fall in May, leaving two-by-four as the only wooden segment in decline.
None of the growth measures a strong market, because the comparison month produced just 55,956 starts, down 15.6 per cent in a third straight fall after the April 2025 revision to the Building Standards Act pulled demand forward into March. Nikkei’s building desk has already called May’s surge a mechanical rebound from that collapse rather than a recovery in demand, with building-material price rises still squeezing buyers.
Three rises have still left the seasonally adjusted annual rate at just 786,000 homes, up from 757,000 in May and short of the 10-year average, in a market that finished 2025 with 740,667 starts, less than half its 1994 peak.
The two-by-four fall carries more signal than its size suggests, because the segment barely moved when everything else collapsed, easing just 5.7 per cent in June 2025 while the total market fell 15.6 per cent. That leaves June’s 7.4 per cent decline compounding on a base that held, while the surging segments climb out of a crater.
“Competition is no longer only imported lumber from Europe or Russia,” Shawn Lawlor, Managing Director of Canada Wood Japan, wrote in an April market report that put domestic two-by-four production up 33.9 per cent in 2025 to 112,610 cubic metres. Japanese housing companies are specifying more home-grown Sugi dimension lumber over imported spruce-pine-fir, and the shift has continued even as Japan’s own sawmills cut lumber output by 8.8 per cent, amid a shortage of buyers.
It comes as Canfor reported Japanese demand deteriorating on weak housing starts, reduced import volumes, and buyers moving to domestic species, in the second-quarter results that swung the group back to operating profit, with the weakness expected to hold through the September quarter. “Continued substitution towards domestically sourced species is projected to pressure import lumber demand,” the group wrote in its outlook, naming pricing pressure alongside volume through the third quarter of 2026.
Structural decline has already redrawn the industry’s map, with Japan’s biggest builders buying growth abroad and Japanese firms now framing 6 per cent of US homes after Sumitomo Forestry’s Tri Pointe buyout cleared in April. Canada Wood Japan’s year-end tally put two-by-four starts at 91,448 homes for 2025, a record 12.4 per cent share and more than Japan’s prefab industry built for the first time, a position the trade now defends in a recovery that so far belongs to everyone else.
