The Impact of the Strait of Hormuz Situation on Construction Materials and Schedules in Japan

From the perspective of The Room, which provides end-to-end support from development to operation of STR (Short-Term Rental) properties in Japan, we explain the impact of the ongoing geopolitical risks on Japan's real estate development and investment environment.

The de facto blockade of the Strait of Hormuz, triggered by the military conflict in the Middle East at the end of February 2026, has dealt a blow to Japan's energy supply network. However, what STR investors should truly pay attention to is the specific material shortages and schedule uncertainties this macro event is causing at Japanese construction sites, and the changes in investment opportunities it brings.

1. The Reality of Japan-Specific Material Shortages and Price Surges

The supply anxiety of crude oil and naphtha due to the blockade of the Strait of Hormuz is directly linked to Japanese construction sites. Especially as of April 2026, the following severe material shortages and price surges are occurring.

Rapid Price Surges and Depletion of Petrochemical Products

The most affected are materials made from petrochemical products. For insulation materials, which determine the performance of a house, board-type insulation such as Styrofoam has suddenly seen a price increase of about 40%, rather than spray types. What is even more serious is not the price, but the fact that "there are no goods." Currently, roof waterproofing sheets are out of stock in the market, and the supply of a wide range of items is delayed, including unit baths, thinner solvents used for paint, and even non-ceramic toilet bowls.

Limited Impact on Aluminum Products

While it is true that aluminum smelting costs are rising due to power supply anxiety in the Middle East, the impact on residential construction in Japan is limited. In current new homes in Japan, the use of standalone aluminum sashes has decreased from the perspective of insulation performance, and the transition to resin sashes, etc. is progressing. Therefore, the damage caused by the surge in aluminum prices to the overall project is within a controllable range compared to the depletion of petrochemical products.

2. Prolonged Building Confirmation Applications Due to Legal Revisions

Adding to the material shortage is the strictness of Japanese building regulations.

Due to the recent revision of the Building Standards Act, structural calculations have become mandatory even for small-scale wooden houses, which were previously exempt. Furthermore, in Tokyo, unique energy-saving standards have been newly established, significantly increasing the number of examination items.

As a result, the examination process at administrative and designated confirmation inspection agencies is significantly delayed. Building confirmation applications, which used to take about 2 to 3 months to complete, now routinely require nearly double the time.

3. Developer Withdrawals and Changes in the Central Tokyo Land Market

The double burden of delayed material procurement and prolonged confirmation applications has made the business environment for new construction projects extremely severe.

Currently, limited construction materials are preferentially supplied to major house makers and power builders with strong management foundations and purchasing power. Therefore, ordinary builders handling one-of-a-kind items like STR properties are unable to read the delivery dates of materials at all, falling into a situation where the construction schedule is unforeseeable.

Normally, developers who purchase land and sell new properties run projects on a short capital recovery cycle of about one year. However, now that the prolongation of the construction period is certain, or even the completion time has become unforeseeable, many developers are making the decision to suspend or pass on projects.

This movement of developers is bringing clear changes to the land market in central Tokyo. As of April 2026, with developers stepping down as buyers, prime land in central Tokyo, which was previously hard to come by in the market, is starting to be put up for sale here and there. A decrease in demand inevitably creates downward pressure on land prices.

4. Strategies STR Investors Should Take

In such a highly uncertain market environment, STR investors need to take clear strategies according to their financial strength and acceptable risk.

Strategy A: Take Time Risks and Purchase Undervalued Land in Central Tokyo

For investors who have financial leeway and can tolerate the risk of project period extension, the current situation can be said to be an excellent investment environment. While competing developers are absent, it is possible to purchase prime land in central Tokyo, which would normally be unobtainable, at a relatively undervalued price. Although it takes time to complete, it becomes a strategic investment to secure future asset value and high profitability as an STR.

Strategy B: Emphasize Certainty and Aim for Renovation of Used Properties

For investors who want to proceed with projects with a certain degree of certainty, the current recommended strategy is to avoid new construction and renovate used properties for operation. Even with a full renovation, the absolute amount of materials required is small compared to new construction. With a small amount of materials, there is a high possibility that they can somehow be procured even in the current supply-constrained market, allowing the launch of an STR business while minimizing the risk of construction delays.

The Room will constantly monitor market trends and material supply situations, and provide optimal property selection and project management tailored to the situations of our investors.