Apartment construction is booming as the wealthy rush to invest in rental housing as a way to reduce inheritance tax and banks hand out easy mortgages, but concerns are mounting that excessive supply paired with a shrinking population could soon lead to the bursting of the bubble.

New starts on apartments and other rental housing in 2016 rose 10.5 percent from a year earlier to over 418,500 units, government data show. The figure took a dive after the 2008 global financial crisis but has risen for the past five years.

The government of Prime Minister Shinzo Abe in 2015 expanded the scope of the inheritance tax, effectively raising taxes for wealthier families. As a result, many are investing in apartments to take advantage of a discount that applies to land with rental housing on it.