Housing Finance Arrangements, Wealth Positioning and Housing Consumption in Japan: An Analysis of Built-for-sale Homeowners
Home purchase is financed through equity and debt. Housing finance arrangements require initial downpayments and impose monthly repayments. Similar to many countries, Japanese households accumulate savings out of their current income and receive private transfers from parents or relatives. From the survey conducted by the Ministry of Land, Transportation and Infrastructure from 1992 to 2000, the paper analyses the time spell until built-for sale homebuyers have amassed sufficient equity to meet the downpayment requirement. For the first-time buyers, private aid in form of cash was the dominant component of equity besides own savings. The innovative feature of our paper is to categorize the households into four classes of positive versus negative excess savings and positive versus negative excess “luck” as other equity sources including private transfers get termed here. For each category we estimate the duration of the accumulation process, and perform a sensitivity analysis that compares the spells under varying amounts of GHLC-loans with other types of mortgages. Since GHLC-loans are means-tested, they can effectively counteract the regressive effects arising from income; but as we will show they cannot really speed up the access in favour of the poorer strata. This finding sheds light on a growing wealth disparity that causes self-selection in ownership access. Copyright Springer Science+Business Media, LLC 2007
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- Guiso, Luigi & Jappelli, Tullio, 2002.
"Private Transfers, Borrowing Constraints and the Timing of Homeownership,"
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- Guiso, Luigi & Jappelli, Tullio, 1998. "Private Transfers, Borrowing Constraints and the Timing of Homeownership," CEPR Discussion Papers 2050, C.E.P.R. Discussion Papers.
- Piyush Tiwari & Yoko Moriizumi, 2003.
"Efficiency in housing finance: a comparative study of mortgage instruments in Japan,"
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Taylor and Francis Journals, vol. 3(3), pages 267-288, December.
- Piyush Tiwari & Yoko Moriizumi, 2003. "Efficiency in housing finance: a comparative study of mortgage instruments in Japan," International Journal of Housing Policy, Taylor & Francis Journals, vol. 3(3), pages 267-288.
- Hendershott, Patric H. & LaFayette, William C. & Haurin, Donald R., 1997. "Debt Usage and Mortgage Choice: The FHA-Conventional Decision," Journal of Urban Economics, Elsevier, vol. 41(2), pages 202-217, March.
- Kanemoto, Yoshitsugu, 1997. "The housing question in Japan," Regional Science and Urban Economics, Elsevier, vol. 27(6), pages 613-641, November.
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