From the rise of stratospheric balloon funerals and progressively softer biscuit recipes to the use of noodle discounts to bribe the elderly into surrendering their driving licences, Japan’s demographics have produced a fine array of unexpected consequences. They could now, conceivably, include persuading a giant cohort of young Americans — the 23mn 18- to 29-year-olds who still live with their parents — to at last fly the family nest.The clue to how this might happen emerged last week when Sekisui House, the heavyweight Osaka-based homebuilder, said that it was buying Denver-based MDC for $4.95bn. The deal will not only be one of the largest undertaken in the sector by a Japanese buyer, but will catapult Sekisui into the top five US homebuilders as measured by 2022’s completed sales.
The deal, say industry experts, is part of an expected wave of consolidation in America’s surprisingly fragmented housebuilding sector, where analysts calculate that the 20 largest companies control roughly 40 per cent of the market. Consolidation could mean more supply, cheaper homes and, in theory, more opportunities for young adults to strike out on their own — they currently cite the unaffordable cost as one of the main reasons for living with their parents.
Japan looks more and more critical to driving this. The Sekisui deal, which was followed this week with a smaller US-based acquisition by Daiwa House, confirmed reporting by the FT last year that the ambitions of Japanese housebuilders were burning hot, and that their prowling for targets in the US market had reached a new pitch of aggression. Daiwa, Sekisui and Sumitomo Forestry are all now climbing the US rankings in terms of scale. M&A bankers who work with the trio are clear that they are far from done buying their way to expansion.