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Was the Expansion of Housing Credit in Japan Good or Bad?

Charles Horioka () and Yoko Niimi ()

No DP2020-02, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: This paper shows, using data from the Family Income and Expenditure Survey, that housing credit has become increasingly available over time in Japan, especially since 2000, and that this has made it easier for Japanese households to purchase housing and enabled them to do so at an earlier age. However, it also shows that the greater availability of housing credit has increased households' housing loan repayment burden, which has resulted in their cutting back on their other consumption expenditures and created the potential for retirement insecurity. Another concern is that the increasing availability of housing credit has been accompanied by a pronounced shift from fixed-rate to variablerate housing loans. This is cause for concern given the low level of financial literacy that prevails among the Japanese population and the likelihood that interest rates on variablerate housing loans will be raised sooner or later as monetary policy is tightened.

Keywords: Homeownership; Housing credit; Housing loans; Mortgages; Household debt; Household liabilities (search for similar items in EconPapers)
JEL-codes: D14 E21 R21 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2020-01
New Economics Papers: this item is included in nep-ban, nep-fle, nep-mac and nep-ure
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https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2020-02.pdf First version, 2020 (application/pdf)

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Journal Article: Was the expansion of housing credit in Japan good or bad? (2020) Downloads
Working Paper: Was the Expansion of Housing Credit in Japan Good or Bad? (2020) Downloads
Working Paper: Was the Expansion of Housing Credit in Japan Good or Bad? (2020) Downloads
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