On March 10th, the Yano Research Institute released the results of its "Survey on the Home Renovation Market" for the fourth quarter and full year of 2021 as well as 2022's market forecast. 

The market size was calculated based on interviews and document research with home renovation businesses..

The market size for 2022 is estimated to be in the range of 6.5 to 7 trillion yen.  If pandemic restrictions begin to relax through the year, discretionary spending on leisure, food and beverage as well as travel is expected to rise, and as a result, further renovation market expansion is expected to be limited. 

On the other hand, the analysis also suggests that there is a possibility of an upward swing, considering that the homes owned by the Dankai Junior generation are approaching the optimum timing for renovations. 

The Dankai Junior generation is a Japan specific demographic term referring to the children of baby boomers who are now in their forties and early fifties.  Dankai Junior’s are equivalent to what the West refers to as Generation X, Generation Jones and Xennials. 

According to CarterJMRN in 2019, “The Baby Dankai (or perhaps more respectfully, the Dankai Junior) are now 40-49 years old, consisting of roughly 19 million people, or 14% of the Japanese population.  They are not only an extremely large demographic group; they also possess about 20% of the total purchasing power in Japan.  On average, that is 48 trillion yen per year.”

The size of the home renovation market for the full year of 2021 (preliminary figures) is estimated at 6.9 trillion yen, up 5.7% Year-on-Year (YoY). 

The renovation market has been expanding since the fall of 2020 due to growth in demand due to the pandemic.  Increased focus on enhanced living environments is believed to have led to reinvestment in housing, including renovation.

By sector, "facility repair/maintenance-related" rose significantly, up 8.6% YoY, while "furniture/interiors" declined 8.3% YoY in reaction to the large increase the previous year.

The home renovation market in the fourth quarter of 2021 was estimated at 1.909 trillion yen (down 9.7% YoY).  While this is considered a reactionary decline from the record-high level during the same period of the previous year, the market has remained strong, printing higher earnings for the past 10 years running.

Further Reading

Yano Research Survey on the Home Renovation Market Press Release (Japanese only; March, 2022)