Japan Housing Starts Rise More-Than-Expected Before Tax IncreaseKathleen Chu
Japan’s housing starts rose for a 13th month in September, the longest streak since the period ended February 1994, ahead of the government’s planned consumption tax increase next year.
Construction companies broke ground on 19.4 percent more homes last month than a year earlier, according to a report released today by the Ministry of Land, Infrastructure, Transport and Tourism in Tokyo. Housing starts were expected to rise 12 percent, based on the median estimate of 24 economists in a Bloomberg News survey.
Demand for homes is increasing as the government plans to raise the sales tax to 8 percent from 5 percent next April and amid concerns that interest rates will start to rise as the central bank moves to stem deflation. Daiwa House Industry Co. and Sekisui House Ltd., Japan’s two-biggest homebuilders, have forecast better-than-expected earnings citing strong orders.
Housing starts rose to an annualized 1.04 million units in September, the highest since September 2008, the report showed. They were expected to rise to 983,000 units, according to the median estimate of 18 economists surveyed by Bloomberg.
Daiwa House said on Sept. 24 it will report a high-than-forecast profit of 73 billion yen ($742 million) for the year ending March 2014. Sekisui House on Sept. 5 raised its net income forecast by 22 percent to 77 billion yen for the year ending January 2014. Orders gained 16 percent for the first six months from a year earlier, the company said on its website.