Jim Ivanoff | ivanoff@bcwood.jp

Being so close to China, Japan was one of the first countries to be hit by COVID-19. However, having a front-row seat on what was happening in Wuhan, also prompted Japan to act quicker than most countries. The tragedy aboard the Diamond Princess cruise ship in particular led to decisive actions such as closing schools early on. As a result, despite having densely populated urban areas, Japan has fared much better so far than most countries. This was illustrated recently when one of Japan’s major telecoms tested all of its 44,000 employees for the virus’ antibodies. Even though more than half of those employees are public facing, the tests showed that only 0.43% had been exposed to COVID-19.
From the beginning, the Japanese government was determined to minimize the effects on business and there was never a hard lockdown of the country. Instead, the government simply requested that business reduce operations and let people work remotely while asking citizens to stay home as much as possible. As a result, aside from the hospitality industries, most businesses kept operating at relatively normal levels. With almost all voluntary restrictions having been removed, Japan is very much back at work.
This recovery will be also aided by a variety of stimulus packages that have been introduced. In total, over US$2 trillion has been committed, representing a staggering 40% of GDP. More importantly corporate Japan was also much better prepared to deal with the COVID-19 induced downturn thanks to the US$6.5 trillion in cash it is holding. As a result, companies were less motivated to lay off staff, helping to keep the unemployment rate a very enviable 2.6% in April. All of this should help allay consumer fears and get them spending again.
While construction sites kept moving during the “stay home” campaign, the housing industry lost one of their best sales lead generation periods when the Golden Week holiday at the beginning of May was basically cancelled. However, with COVID-19 also unleashing the concept of “remote work” in Japan, strengthening consumer confidence may also usher in a new era of home building where cheaper, “inconvenient” rural land becomes sought after and allowing buyers to use their savings on the land to build larger, more comfortable homes that are equipped with home-office space. Such a shift will be game changing in the Japanese real estate industry.
Things could quickly take another turn for the worse with a 3rd wave, but with so many positive signs in Japan, BC Wood is working hard to help members take advantage of this recovery. The Japan Home & Building Show is going ahead as planned in November and BC Wood has also rolled out an all new virtual support program for members. For more information on these programs or on the market situation, please contact Jim Ivanoff ( ivanoff@bcwood.jp).