According to Bloomberg:
Prime Minister Yasuo Fukuda said last week he regretted the slump in housing starts that resulted from building-code changes made in June after an architect fabricated earthquake-resistance data. The central bank lowered its evaluation of the economy for the first time in three years last week and the government slashed its growth forecast because of the building fiasco. Housing investment wiped more than 1 percentage point from Japan's 1.5 percent annual pace of economic expansion in the third quarter. The Cabinet Office last week cut its growth forecast for the year ending March to 1.3 percent from 2.1 percent. The Real Estate Economic Research Institute said last week that the condominium supply in Tokyo and the surrounding area will fall to the lowest since 1993 this year and may decline further in 2008.
The problem is affecting related industries. Demand for kitchenware, which represents about a quarter of the domestic stainless steel market, will decline from January, said Yoichi Saji, head of the Japan Stainless Steel Association. Nippon Steel & Sumikin Stainless Steel Corp., Japan's largest maker of the alloy, said yesterday it would cut output of nickel-based stainless steel by about 10 percent next month.
The 103-member Topix Construction Index has fallen 12 percent since having the biggest gain in more than eight years on Oct. 30 when the Land Ministry announced it would relax the building rules. Builders broke ground on 971,000 new homes and condominiums in November at an annual rate, the most since the regulations were introduced in June, today's report showed. The figure has risen from 720,000 in September, the lowest since the government began keeping records in 1965.