The housing market will weather a consumption levy increase because of a tax break on home purchases, according to Mizuho Securities Co. and Morgan Stanley MUFG Securities Co.

Prime Minister Shinzo Abe said Tuesday the sales tax will rise to 8 percent in April from 5 percent now, marking the first increase since 1997. In January, the government doubled home-buyer tax exemptions to as much as ¥4 million per transaction, compared with ¥1.8 million in tax breaks back in 1997, according to Mizuho Research Institute Ltd.

While expectations of the higher sales tax has spurred last-minute buying among potential home-buyers, concerns that demand will dry up after the increase has prompted Deutsche Bank AG to cut the rating on Japan's real estate industry for the first time since 2010.