Sales price competition, surging construction costs, and the risk of construction delays

「There is a risk that sales will not progress in line with plans because of deterioration in the supply-demand balance resulting from economic trends and conditions, interest rates, tax policies, land prices and other factors, as well as rising construction costs and procurement difficulties.」

「In the real estate industry in which our Group operates, concerns are increasing over soaring construction material prices, labor shortages and the impact on mortgage interest rates from a review of monetary policy, among other factors.」

「In Japan, inflation is also accelerating, and concerns in the real estate industry include soaring construction costs, labor shortages and, over the medium to long term, the possibility of rising interest rates.」

「Rising construction costs due to higher raw material prices, delays in material deliveries caused by shortages of components and other items, intensifying competition for real estate acquisitions and higher acquisition prices remain pronounced, and the situation continues to require close monitoring of their impact on the market.」

「In the condominium development business, visitor numbers at sales centers fell sharply during the state of emergency, causing sales progress to stagnate. After the state of emergency was lifted, visitor numbers gradually recovered, and actual demand for housing amid the COVID-19 pandemic has remained stronger than expected. However, sales may stagnate if prolonged infections lead to unstable economic conditions, and the situation remains uncertain.」

「After the state of emergency was lifted, the number of contracts has gradually increased as visitor numbers recovered. However, concerns remain about the possibility of second and third waves of infections, and it is difficult to forecast the impact on future sales forecasts and construction schedules in addition to properties currently being sold. A review of the construction start dates for new condominiums may also become necessary.」

「If operations fail to proceed as planned because of intensified price competition with competitors, rising construction costs or other factors, or if delays in handover and unplanned cost burdens arise from construction delays caused by unforeseen defects such as underground obstructions, defective construction during the building phase or the bankruptcy of a construction company, these circumstances may affect the Group’s operating results.」

「If sales at the prices determined in the business plan fail to proceed as planned because of deterioration in the supply-demand balance resulting from economic trends and conditions, interest rates, tax policies, land prices and other factors, declining quality among condominium sales companies, intensifying price competition with competitors, rising construction costs or other factors, or if delays in handover and unplanned cost burdens arise from construction delays caused by unforeseen defects such as underground obstructions, defective construction during the building phase or the bankruptcy of a construction company, these circumstances may affect the Group’s operating results.」

「If sales at the prices determined in the business plan fail to proceed as planned because of deterioration in the supply-demand balance resulting from economic trends and conditions, interest rates, tax policies, land prices and other factors, declining quality among condominium sales companies, intensifying price competition with competitors, rising construction costs or other factors, or if delays in handover and unplanned cost burdens arise from construction delays caused by unforeseen defects such as underground obstructions, defective construction during the building phase or the bankruptcy of a construction company, these circumstances may affect the Group’s operating results.」