Evaluation of the Expansion of Housing Credit in Japan

Horioka, Charles Yuji

新見, 陽子

Niimi, Yoko

住宅購入

住宅ローン

持家率

家賃地代

Homeownership rate

housing finance

housing loans

housing purchase

mortgages

rent

In this paper, we show that there was a rapid expansion of housing credit in Japan after 1970 and then consider what benefits and costs the rapid expansion of housing credit conferred on Japanese households and whether it was, on balance, a good thing or a bad thing for them. On the one hand, the rapid expansion of housing credit made it easier for households to purchase housing, which in turn enabled them to purchase housing at a younger age and en able d them to avoid the need to pay rent. On the other hand, the rapid expansion of housing cr edit increased the h ousing loan repayment burden of households, which in turn forced them to cut back on non-housing consumption and weakened their ability to accumulate financial assets in preparation for retirement. We c onclude that, until now, the benefits of the expansion of housing credit seems to have outweighed the costs thereof, as a result of which it has increas ed the welfare of households but that there are some areas of concern and that the government should tak e the necessary steps to alleviate these concerns .

新見, 陽子