Tokyo takes steps to head off bad debts from rising condo loans

Tokyo

JAPAN is stepping up its supervision of bank lending amid growing concerns that a spurt of construction financing for new apartment blocks could be sowing the seeds for bad debts in the future, people involved in the matter say.

Small apartment and condominium block development has been a rare source of lending growth in an economy struggling to revive activity. However, much of this represents speculative investment, not housing demand, as wealthy people chase tax breaks and yield, amid a near zero interest rate environment.