Construction is a major engine in the development of the housing market, and Japan’s housing market in particular has been characterized by substantial continuous and sustained housing construction. In Western European countries, housing construction peaked in the late 1960s and early 1970s, and subsequently began to decline (Ball and Harloe, 1998). In contrast, Japan maintained a high level of housing construction, averaging more than 1.4 million units a year from the mid-1970s, despite the infl uence of cyclical fl uctuations in production conditions. International comparison of construction volume by population reveals considerable differences in the Japanese case. The number of houses newly constructed per thousand people ranged between three and six units during the 1980s and 1990s in Britain, Germany, France and the USA. Japan, in contrast, maintained a level of between ten and fourteen units, even though this fell to nine units in the late 1990s (JSS, 2004).