Hong Kong-based HKR International Ltd. (Victor Cha, Executive Chairman) is planning to build a large-scale accommodation facility in the Soga District of Niseko Town. The conglomerate engaged in real-estate development aims to start civil works in September 2022 and complete construction of the buildings in 2024. The contractor for this project will be decided at a later time.

At Furano’s Kitanomine, which is attracting attention as the “second Niseko,” a wave of large-scale development is spreading not only in the urban area but also to the adjacent Shimogoryo district. Land preparation and sales are becoming active, and new construction projects such as a Route Inn hotel and foreign-funded condominiums have been planned. The momentum to embark on construction work after the COVID-19 pandemic is over is increasing, and people involved in and outside the city are watching the trend.

“Although I have experienced the rise and fall of material prices many times, this is the first time I have witnessed a situation like this.” The president of a housing builder in Sapporo is baffled by uncertainty about the future of the wood shock. Japan relies on imports for more than 60% of its lumber consumption. Supply sources are wide-ranging, including China, EU nations, and countries in Southeast Asia and North America, and lumber prices have been influenced by overseas trends. Now, let’s examine various data to see what is happening around the world.

How is the wood shock affecting Hokkaido’s lumber industry? Most Hokkaido lumber is processed into industrial materials such as cushioning materials, pallet materials and lumber products other than structural materials. Although there may seem to be little relation to the shortage of foreign lumber in the housing industry, lumber companies in Hokkaido are also feeling the change.

A “wood shock” has been triggered by the rise in demand for lumber and housing in the United States and China, both of which have been severely impacted by the COVID-19 pandemic, as well as the do-it-yourself craze, thus resulting in soaring prices for foreign lumber and procurement difficulties. The impact of this has been significant, especially for housing companies. Here we will be examining what brought on this wood shock as well as talking with those on the front lines of Hokkaido companies who are struggling to deal with the situation at hand.