New Japan real estate loans hit record, eclipse bubble economy peak

New real estate lending in the April-Sept period rose 16% from the same period a year earlier to $53.94 billion

New lending to Japan's real estate sector rose to a record in the first half of the financial year, exceeding lending during the bubble economy of the 1980s in a warning that the sector could be overheating.

Real estate is a sensitive subject because land and asset prices inflated rapidly during the 1980s economic bubble. Asset prices then collapsed in the early 1990s, and Japan still has not fully shaken off the impact.

New real estate lending in the April-September period rose 16% from the same period a year earlier to 5.9 trillion yen ($53.94 billion), Bank of Japan (BoJ) data showed on Wednesday. This exceeded the previous peak in real estate lending in the first half of FY1989.

Total new lending in April-September also rose 16% from the same period a year earlier to 23.9 trillion yen.

Bank lending, which has been rising since 2013 when the BoJ began quantitative easing, has accelerated even further after the central bank said in January it would adopt negative interest rates.

The BoJ said last month it is closely monitoring bank lending to the real estate sector to guard against excessive credit but did not see signs of a bubble.

($1 = 109.3900 yen)