Builders see boost before ’14 tax hike

JIJI

Major homebuilders expect their sales and profits to rise in fiscal 2013, which ends next March, thanks to a projected surge in housing demand ahead of a planned consumption tax hike next April.

Rush demand ahead of the tax hike and housing loan rates at historic lows, despite recent slight rises, are expected to help increase orders for owner-occupied houses to boost their profits.

Model home galleries got 30 percent more visitors during Golden Week from late April to early May than last year.

“People had more incentives than usual to visit such galleries this year, including not only the tax hike but also growing expectations that interest rates will rise and improved economic sentiment,” a housing industry official said.

On the back of rising housing demand, leading home builder Daiwa House Industry Co. expects record sales, operating profit and net profit for fiscal 2013. Asahi Kasei Homes Corp., a unit of chemical conglomerate Asahi Kasei Corp., sees record sales and operating profit.

The current 5 percent consumption tax will apply to customers who sign contracts for custom-built houses by the end of September this year even if the handovers take place after the tax rises to 8 percent in April.

The companies thus fear that orders for such homes will plunge in October and later.

Misawa Homes Co. expects its orders for custom-built houses to grow by about 2 percent in fiscal 2013 to 8,230 units. Of them, 4,570 units, or 55 percent, are expected in the first half of the year. The company plans to bolster its sales campaign in an effort to offset the projected decline in orders in the second half.

Sumitomo Forestry Co. plans to raise its target for home construction orders by 6.5 percent to 9,700 units.