Housing Loan Rates Decrease

The Government Housing Loan Corporation (GHLC) reduced its lending rate to 3.1 percent as of April 1, 1997.

GHLC was established in 1950 as the sole government financial institution for housing loans. Most new single family homes and a large share of speculative and other types of housing are purchased with GHLC assisted financing. Recent deregulation in the housing sector has facilitated GHLC financing of imported housing.

Loan rates for resale houses also dropped to 3.1 percent on April 1. The resale market in Japan is only about 150,000 houses per year, compared with over 3 million resales in the US annually. Resale value in the US is based on market conditions where in Japan the value is often determined by a set formula of depreciation value based on the age of the house.

1997 Housing Starts

Forecasts for housing starts predict a downturn to 1.2 - 1.3 million starts for 1997. Data for the first quarter indicated starts were 5 percent lower than the previous year, at 481,323 units. Wood frame units were down 10 percent to 203,335 units. Units of 2x4 construction for the period have been reported to be ahead of 1996 figures.

A weak yen, continued slow economy and the 2 percent sales tax increase on April 1 are all factors expected to contribute to the downturn in housing this year. In previous down market years over the last decade, 2x4 housing starts generally increased over previous years, perhaps reflecting a market perception of better value and more affordability.

A technical assessment of nearly 20 imported housing projects was conducted by Washington State last March. The objective of the study is to identify areas of construction and finish detail that are done improperly or inefficiently. Feedback from the study will be used for planning future technology transfer programming and disseminated to industry members in Washington State and Japan to assist with clarifying common problem areas. The technical assessment was carried out by consultants Roger Williams, Mithun Partners; Tom Ossinger, US Construction Link; and

The objective of the study is to identify areas of construction and finish detail that are done improperly or inefficiently

Mark Anderson, Anderson Anderson Architects and Bay Pacific Construction. The study tour was organized by CTED and the American Forest and Paper Association in Tokyo. Projects visited were located in Kobe, Osaka, Nagoya, Toyokawa, Shizuoka and Tokyo.

Assessment information and technical appraisals of the projects will be summarized in a detailed report by the University of Washington, CINTRAFOR. Preliminary results from the study should be available late this summer, with a final report published in the fall.

The Ministry of Construction announced in March that new performance based standards for wooden platform frame construction will go into effect on June 1. The existing prescriptive standards in the Building Standard Law, Notification 56, have been revised to allow acceptance of building permit applications that are accompanied by structural calculations and test data to show satisfactory performance. However, test protocols for the new performance standards have not been announced yet and implementation of the new standards may be hindered by MOC's current lack of workable procedures for acceptance of US testing data and certifications. The requirement for scaffolding for 2x4 construction was dropped in March. Post and beam construction will still be required to use scaffolding during construction work.