Daiwa House Industry announced that, from April 2027, it will consolidate its sales functions for newly built detached homes into 22 prefectures and suspend new orders in 23 prefectures. Although domestic sales are increasing, the decline in profit margins has become pronounced, pointing to a business restructuring policy that emphasizes regional differences.
Daiwa House has outlined a policy of geographically narrowing its domestic newly built detached housing business. From April 2027 onward, it will consolidate its sales functions in 22 prefectures and suspend new orders in 23 prefectures. Domestic sales are increasing, but overseas sales account for a large proportion of total sales, and domestic operating profit is expected to remain low.
Domestic sales of approximately ¥525.5 billion compare with overseas sales of approximately ¥816.7 billion. Although the number of homes sold domestically exceeds the previous year's level, domestic operating profit may have declined substantially. Against a backdrop of rising fixed costs, including material prices, labor costs and logistics expenses, some have pointed out that maintaining a nationwide operating structure has become difficult.
The overall market is contracting, but regional differences are substantial, with declines in new housing starts varying by prefecture. Daiwa House is pursuing a strategy of concentrating resources on high-priced and high-value-added housing, and has indicated that regional players such as local builders will have an important role to play.
The company has also outlined a policy of strengthening its stock business nationwide, in addition to new construction. In the long term, this raises the issue of whether a structure supported by regional housing companies will be needed to sustain the housing life cycle.
Daiwa House's announcement is drawing attention as a sign of the end of an era in which major nationwide companies met all demand, and of the potential expansion of a locally focused housing supply structure, with the market's structural changes ahead now under scrutiny.