Japan’s Lumber and Panel Prices Continue to Soar, Pulling Up Home Prices

The shortage of lumber and plywood in Japan that began last year has been further aggravated by Russia’s invasion of Ukraine. Russia has ceased exporting some of its lumber to Japan in retaliation for the sanctions Japan imposed on Russia.

As a result, lumber and panel prices in Japan have increased 10-20% in just the last 3 months. According to the Bank of Japan, lumber and wood products in June were as much as 43.4% higher year-over-year. Elevated prices have now made their way into Japan’s housing market, with prices already 2% higher from the start of the year. Additional increases are anticipated.

The price of lumber, plywood, and logs are rising steadily. Since about 60% of the lumber and panels consumed in Japan are imported, the weak yen is also now a major contributor to the higher prices of those building materials.

As a result, Japan’s builders are turning their attention to the use of domestically grown timber. After World War II, Japan planted trees to meet the rapid increase in demand for lumber. Currently, planted forests account for 40% of the country’s total forests. Forest resources such as cypress and cedar have been increasing by about 60 million cubic meters every year.

Mitsubishi Estate Home Co. President Hirofumi Kato said, “We want to utilize domestic timber as much as possible.” However, according to the Forestry Agency of Japan, there is no system in place for the production, distribution, and processing of domestic timber in large quantities.