Saturday, July 11, 2009
TOKYO (Nikkei)--Tax cuts and other government initiatives appear to be having a gradual effect on the housing market, with Mitsui Home Co. (1868) and two other homebuilders enjoying year-on-year upticks in June orders. Mitsui Home logged a 5% year-on-year increase in orders, including those received by regional franchise stores, marking its first gain in 10months. Orders surged 13% on a parent-only basis, where operations are mainly in big cities, with a considerable rebound in Tokyo. Sumitomo Forestry Co. (1911) saw a 9% jump, its first rise in one year. At PanaHome Corp. (1924), orders for detached homes climbed after a one-year hiatus.

Behind the recovery in housing orders are a string of incentives for homebuying, including expanded tax breaks on mortgages and reduced inheritance taxes. But orders are still falling at Sekisui Chemical Co. (4204) and Misawa HomesCo. (1722). "Sumitomo Forestry and Mitsui Home have reaped the benefits of bolstered marketing efforts," explains Daisuke Fukushima, an analyst at Nomura Securities Co. "But order levels are still low and we've yet to see a full-fledged recovery."

Another cause for concern is the drop in order prices. Demand to rebuild homes -- an expensive venture -- has yet to recover and buyers are mostly young people with relatively less room to spend. "The government initiatives have spurred young people into action," says Mitsui Home Senior Managing Director Kenji Matsumoto. "The recovery will gain traction once buyers who are waiting for an economic rebound start
spending big."
(The Nikkei July 11 morning edition)
 

 

The Australian residential property market may be about to experience a surge in building activity levels, with economic forecaster and industry analyst group BIS Shrapnel suggesting housing starts could jump by 21% to 160,000 in 2009/10 in what it suggests would be the beginning of a four-year upturn for the sector.

The forecast comes in the group's "Building in Australia, 2009-2024" report and is based on its view interest rates will stay low for long enough for housing construction to strengthen by enough to offset weaker levels of business investment that are just starting to become apparent.

BIS senior economist Jason Anderson expects first home buyer numbers will fall as the first home owners grant is phased out, with numbers in this sector expected to decline to around 140,000 in 2010 from a forecast 200,000 this year, a downturn that will come at the same time as business investment levels also decline.

On Anderson's numbers, the decline in business investment could take as much as 2.8% from GDP in 2009/10, with lower levels of commercial and industrial building commencements to be a major factor in the decline. Stronger residential housing will therefore be needed to offset this fall and for this to occur Anderson takes the view interest rates will need to stay low to attract investors and those looking to upgrade their properties.

 Assuming a housing upturn, NSW is best placed to benefit in his view given its undersupply situation is far worse than in other states, but he sees an extension of the temporary halving of stamp duty as necessary for there to a sufficient impact on demand.

Low interest rates will support what has remained strong demand in Victoria, as will what are more generous first home buyer grants than in New South Wales and the fact affordability is better in the Victorian market. But with commercial construction likely to drop sharply in the year ahead Anderson sees overall building activity in the state as relatively flat in 2010.

Queensland is forecast to enjoy a 24% gain in housing starts in 2009/10, offsetting part of the 34% decline experienced in 2008/09. Brisbane should enjoy the strongest rate of expansion as Anderson notes there are more first home buyers in Queensland as a percentage of total households than anywhere else in Australia. Overall though he sees the state's building sector as relatively subdued given work on apartments, offices and shops are expected to be lower.

South Australia has enjoyed relatively stable dwelling construction levels in recent years, but Anderson sees a 13% rise in dwellings in 2009/10 to 13,900, which would put it above underlying demand of 11,000. Given this BIS Shrapnel expects a modest rate of decline in starts for three years post June 2010.

Dwelling construction in Western Australia is forecast to fall by around 18% in 2008/09, but 2009/10 should see a 20% jump in this number. House prices in Perth should also return to a modest level of growth. Combined with low borrowing costs, Anderson expects this will mean an increase in upgrader demand for new houses.BIS Shrapnel expects dwelling commencements in Tasmania will be steady in 2009/10 helped by good levels of affordability, while in the Northern Territory only a minor increase in starts is expected, despite a significant shortage of dwellings. Anderson expects upgraders will be active in this market given continued strong price gains in the residential property sector.

Starts have risen by about 11% in the Australian Capital Territory in 2008/09 and demand from both the first home buyer and upgrader segments of the market is expected to remain strong in coming years. At the same time Anderson sees a sharp fall in office construction dragging non-residential construction rates lower.

 

Inspired by the construction method of the temple in Shanghai, the administration committee of Hanzghou Xiangji Temple decided to use wood in the construction of Xiangji Temple in Hanzghou, a city 150 km far from Shanghai. Composed of nine buildings within the complex, Xiangji Temple, according to bidding document, will absorb 2.5 MMBF (6,000 M3) Dir-Fir glulam beams. The temple is schedule to open to the public in October.  

China Softwood Lumber Imports Rise
In 2008, Chinese imports of softwood lumber increased by 32% compared to 2007 - from 2.8 million m3 to 3.69 million m3. Canada attained the largest one year increase in softwood lumber exports to China - from 615,125 m3 in 2007 to 1.1 million m3 in 2008 (+76%), while Russia had the second largest volume increase from 1.43 million m3 to 1.79 million m3 (+26%). (Source: Chinese Customs)

China Timber Products Industry Grows
As the global economic crisis gripped China in 2008, China's timber products revenue for exports and imports increased by 15.4% in the first ten months of 2008 - a 17% drop in the 2007 timber products growth rate. (Source: China Customs)

China To Raise Standards on Wooden Furniture
According to the China Green Times, China implemented new national standards on wooden furniture as of 1 May 2009. The measures are expected to harmonize national standards for wooden furniture. Disputes between enterprises and consumers will be settled according to the standard on which the law is based. Under the standards, wooden furniture is classified as wooden furniture, panel furniture or synthetic furniture. Wooden furniture is divided into three major types: full solid wood furniture; solid wood furniture; and veneer overlaid wooden furniture. The three major types of wooden furniture are differentiated by the proportion of basic wooden materials used. In addition, wood-based panel furniture has four separate classifications: fiberboard furniture; particleboard furniture; blockboard furniture; and multilayer plywood furniture. Synthetic furniture is made of timber mixed with wood-based panel

China Exports Drop Significantly In First Quarter
Affected by the global economic crisis, China's foreign trade in major forest products tumbled considerably in the first quarter of 2009. This is mainly due to shrinking markets of developed economies such as Europe, the US and Japan, which are the main export markets of China. The statistics from China Customs have shown China's total import and export trade value of major forest products declined for two successive quarters to only USD11.768 billion in the first quarter of 2009, down 18.9% from the same period of last year. Of the total, the country's import value was USD4.829 billion, down 27.8%, and the export value was USD6.939 billion, down 11%. The favorable trade balance continued to climb, however, and reached USD2.11 billion, up USD968 million compared with USD1.142 billion in the same period of last year.

Wooden furniture
A total of 52.60 million pieces of wooden furniture (including wood frame seats, bedroom furniture, office furniture, kitchen furniture and other wooden furniture) were exported valued at USD2.3 billion, down 4.7% by volume and 2% by value from the same period last year. Wooden furniture is an extremely important component of China's forest products exports, accounting for one-third of the total export value of forest products in the country.
 

September