A severe housing shortage plagued Japan after World War II. It is estimated that in 1947, two years after the war's end, the housing deficit amounted to more than four million units. A construction program resulted in 9.7 million new units by the end of 1965. The following year, the government undertook a five-year plan for the construction of 7.6 million houses by mid-1971; the plan was designed to fulfill the goal of "one house for each family."
Housing construction peaked at 1.9 million units in 1973; despite efforts to promote construction as a means of stimulating the domestic economy, construction lagged in later years, falling to between 1.1 million and 1.5 million units in the 1980s. The decline reflects not so much a saturation of demand—many Japanese regard their housing as inadequate—as a rapid rise in land and construction costs, especially in the Tokyo, Nagoya, and Osaka metropolitan areas, which has put new housing out of the reach of potential buyers.
In the mid-1990s, the average salaried worker in Tokyo could only afford a house 40 km outside the Tokyo metropolitan area. Condominiums and prefabricated homes provided much of the nation's new housing in the 1980s. In fiscal 1987, low interest rates pushed new housing starts to 1.729 million units; they declined in 1988 to 1.6 million, and fell to 1.343 million in 1991 with the start of the recession. However, in 1998, there was a total of 50.25 million dwellings, representing 13% more than the number of households. About 61% of dwellings are owner occupied. Most dwellings are relatively small by international standards. In 1998, about 1.1 million rental properties had under 60 square meters of floor space.