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

Author

Listed:
  • Charles Yuji Horioka
  • Yoko Niimi

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 variable-rate 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 variable-rate housing loans will be raised sooner or later as monetary policy is tightened.

Suggested Citation

  • Charles Yuji Horioka & Yoko Niimi, 2020. "Was the Expansion of Housing Credit in Japan Good or Bad?," ISER Discussion Paper 1075, Institute of Social and Economic Research, The University of Osaka.
    • Handle: RePEc:dpr:wpaper:1075
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    File URL: https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2020/DP1075.pdf
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    Cited by:

    1. Charles Yuji Horioka, 2024. "Household Saving in Japan: The Past, Present, and Future," ISER Discussion Paper 1264r, Institute of Social and Economic Research, The University of Osaka, revised Jan 2026.
    2. Horioka, Charles Yuji & Niimi, Yoko, 2019. "Household Debt and Aging in Japan," AGI Working Paper Series 2019-12, Asian Growth Research Institute.
    3. Charles Yuji Horioka, 2021. "Is the selfish life-cycle model more applicable in Japan and, if so, why? A literature survey," Review of Economics of the Household, Springer, vol. 19(1), pages 157-187, March.
    4. Niizeki, Takeshi & Suga, Fumihiko, 2021. "The impact of the rise and collapse of Japan's housing price bubble on households’ lifetime utility," Journal of the Japanese and International Economies, Elsevier, vol. 60(C).

    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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