About the MSJ Group's Management Vision (Market Environment & Short-term Strategy)
Hello. This is the IR and Public Relations department of Japan Mortgage Service Co., Ltd. (TSE Standard: 7192).
Our company held its 20th Ordinary General Meeting of Shareholders on Friday, June 27. We would like to sincerely thank all our shareholders for attending despite their busy schedules. Following the shareholders' meeting, we also held a shareholder briefing where our Group Representative, Mr. Uzawa, gave a presentation on our future growth strategy.
In this note, we will provide an easy-to-understand overview of the MSJ Group's management strategy. We hope this will help deepen your understanding of the strategies the MSJ Group is using to develop its business.
Market Environment ◆ The housing industry is facing a serious situation due to soaring housing prices and rising interest rates
First, let's look at how the MSJ Group perceives the market environment.
Currently, the housing industry is facing a serious situation due to soaring housing prices and rising interest rates. The reality is that for many middle-income households, housing prices have risen beyond what they can afford, making the dream of owning a "my home" increasingly distant.
・The hurdles to building a home are becoming even tougher due to high housing construction costs
Currently, construction costs for custom-built homes in the Tokyo metropolitan area are approaching 55 million yen. We anticipate that the rise in housing construction costs will remain at a high level in the future, driven by soaring material prices, the sophistication of housing design, specifications, and construction due to revisions in the Building Standards Act, and increases in labor costs.
・The impact of a world with interest rates on the housing industry
Housing loan interest rates are also on an upward trend for both variable and fixed rates. Rising housing loan interest rates lead to a decrease in borrowing capacity and an increase in repayment burdens, which, combined with rising housing prices, raises concerns about a further decline in consumer sentiment toward purchasing homes.
Furthermore, we believe that rising interest rates may affect not only housing loan rates but also public support measures such as subsidies, creating a risk that will spread widely throughout the housing industry.
Aiming for growth through a balance of short-term and long-term strategies
As mentioned in the market environment section, supplying housing at a price range that middle-income households can afford without strain is a major challenge in the current housing industry.
However, the MSJ Group believes there is a limit to cost reductions achieved through the corporate efforts of housing companies. The reason is that we recognize the root of the problem lies in the "structure of the housing industry itself," which cannot be solved by corporate efforts alone. In particular, our group believes that transforming the supply chain is the key to realizing reductions in housing construction costs.
Fundamentally transforming the "housing formation process," starting with the supply chain, and taking on the challenge of reducing housing construction costs. The MSJ Group positions this challenge as a long-term strategy and aims for sustainable growth in combination with our short-term strategy.
Short-term Strategy ◆ Surviving in a shrinking market by deepening cross-selling
Our group's greatest strength is our suite of housing finance services integrated with the housing formation process. As infrastructure supporting the housing business, we offer a wide range of genres and products, boasting one of the best selections in Japan. In our short-term strategy, we will make maximum use of these management resources.
・Industry-leading product variety supporting the housing business
The vertical axis (blue) in the chart shows the housing loan products handled by our group.We have a lineup of approximately 20 types of housing loans aloneand we meet a wide range of needs according to income, occupation, and life stage, from low-interest internet bank loans to proper loans for new construction and renovations, Flat 35, and reverse mortgages.
The horizontal axis (green) represents our group's housing finance solutions, which cover everything from the initial stages of housing construction to after-maintenance and renovations after handover. With financial support through bridge loans, quality management products such as ground warranties and new home defect insurance, and equipment warranties and emergency services after moving in,as a behind-the-scenes supporter of housing companies, we support living through a product variety of approximately 70 types.
Focusing on the needs of housing companies and providing optimal management support solutions
Our group has previously developed a cross-selling strategy that combines "new home defect insurance," which is mandatory during housing construction, with ground warranties, housing business cloud services, and more.
However, with the recent changes in the market environment, the management issues faced by housing companies have also become more diverse and complex. Given this situation, the MSJ Group willemphasize consulting and strengthen customized proposals that flexibly combine services.
By providing optimal management support solutions tailored to the management issues of housing companies, we will strive to further deepen our cross-selling strategy.
By enhancing our consulting capabilities, we will provide value to housing companies that exceeds the switching costs of our services, aiming to promote repeat orders. Through this, we will increase the number of services utilized per building, thereby establishing a stable and sustainable revenue model even amidst structural industry changes such as the decline in housing starts.
Long-term Strategy ◆ Continued focus on developing a platform that realizes reductions in housing construction costs
Our long-term strategy is introduced in detail in this note.
Shareholder Meeting Presentation Materials (PDF)
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Thank you for your continued support.
※Notes:
This article is intended solely for providing information regarding our business and is not intended as an investment solicitation.
