Challenges in the Detached-House Market and Slower High-Margin New Sales

「In the housing business, while new housing starts declined, sales increased as a result of rising renovation demand and proposals for additional product options prompted by revisions to the Building Standards Act.」

「During the cumulative first-quarter period under review, restrictions on sales activities, including voluntary curtailment of activities following the declaration of a state of emergency amid the spread of COVID-19, contributed to sluggish year-on-year sales and a revenue decline in the Housing Business Division, whose main products are design CAD systems related to wooden housing and which accounts for a significant share of sales in the segment.」

「In the housing business, whose main products are design CAD systems related to wooden housing, sales benefited from the approval of applications under the IT Introduction Subsidy Program during the second quarter. However, in the third and fourth quarters, sales declined year on year due in part to the post-subsidy drop in sales and the decline in new housing starts in the housing market.」

「In the housing business, whose main products are design CAD systems related to wooden housing, sales benefited from the approval of applications under the IT Introduction Subsidy Program during the second quarter. However, in the third quarter, sales declined from the same period of the previous fiscal year due in part to the post-subsidy drop in sales and the decline in new housing starts in the housing market.」

「During the cumulative nine-month period under review, sales have been tracking slightly below the same period of the previous year, partly due to external factors including the year-on-year decline in new housing starts.」

「During the first half under review, the architectural CAD business was affected by the year-on-year decline in new housing starts and the reduced subsidy amount under the IT Introduction Subsidy Program, among other factors. Net sales were ¥2,651 million, down 2.3% year on year, while operating profit was ¥746 million, up 10.0%.」

「Due to the impact of the consumption tax increase scheduled for October 2019, the number of housing starts from April 2018 was slightly higher than in the same period of the previous year.」

「In the consolidated fiscal year under review, new housing starts declined for 8 consecutive months year on year, leaving the housing industry with its second-lowest result after 2014, when demand fell following the rush to purchase before the consumption tax increase. The decline was particularly sharp in owner-occupied detached homes, which are highly relevant to the Group’s customers, and the industry as a whole is once again looking to demand ahead of the 2019 consumption tax increase.」

「During the cumulative nine-month period under review, housing starts stagnated and declined for five consecutive months, resulting in challenging conditions in the detached-home sector.」

「During the first half under review, the architectural CAD business reported sales above the same period of the previous year, despite difficult conditions in detached-home contracting in the housing industry, owing to the impact of the new “ARCHITREND ZERO Ver4” product released in July and the tailwind from the IT Introduction Subsidy Program implemented by the Ministry of Economy, Trade and Industry.」

「In addition to the continued improvement in employment and income, the Bank of Japan’s negative interest rate policy lowered mortgage rates, increasing interest in home purchases and keeping housing starts firm.」

「During the cumulative nine-month period under review, the housing market saw housing starts remain firm, but this was driven by rental apartments resulting from population growth in Tokyo and rental housing developed for inheritance-tax planning. Conditions were challenging in the detached-home sector. These factors also had a material impact on CAD software sales, with high-margin new sales showing a slight slowdown.」