RIEB Discussion Paper Series No.2020-02

RIEB Discussion Paper Series No.2020-02


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


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.


Homeownership; Housing credit; Housing loans; Mortgages; Household debt; Household liabilities

JEL Classification

D14, E21, R21


Charles Yuji HORIOKA
Research Institute for Economics and Business Administration
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: +81-78-803-7036
FAX: +81-78-803-7059
Institute of Social and Economic Research, Osaka University
Asian Growth Research Institute
National Bureau of Economic Research

Faculty of Policy Studies, Doshisha University and Asian Growth Research Institute