Housing permits will reach a 15-year low in Japan in 2025 11/2025

by Robin Huth

Overview of recent developments in building permits in Japan, based on the latest update of our Global Building Monitor
by Robin Huth | B+L

I’d like to share the latest update of our Global Building Monitor, with a focus on Japan. The data show that the weakness in residential construction that began in 2025 is persisting. Quarterly figures for dwellings started indicate a decline of ‑8.5 % in Q1 2025 and ‑2.7 % in Q2 2025. For the full year we now expect a contraction of ‑4.4 %, leaving the market at roughly 823 000 units in 2025 – a level not seen for about fifteen years.

Looking ahead, the outlook is modest. We anticipate a slight recovery in 2026, but total completions are unlikely to exceed 850 000 units. Two main factors drive this outlook. First, the overall economic environment remains weak. Second, Japan’s demographic trends are unfavourable: the population has been declining for the past fifteen years and the rate of decline is accelerating. An ageing society reduces the demand for new housing, which directly explains the subdued residential‑construction forecast.

The same downward pressure is visible in the non‑residential sector. Completed non‑residential floor‑space fell to below 50 million m² in 2025, a sharp drop from the average of ≈ 60 million m² that prevailed between 2014 and the years before. Although we expect a gradual increase in non‑residential construction in the coming years, it will be modest and not driven by a strong domestic economic recovery. Even with a broader global recovery, the Japanese market is not projected to surpass 55 million m² of non‑residential floor‑space before 2028.

In summary, both residential and non‑residential construction in Japan is experiencing a prolonged slowdown due to economic weakness and demographic decline.