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Swedish Mortgage Cap May Be Relaxed In Social Democrat Plan

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http://www.bloomberg.com/news/2014-08-24/swedish-debt-cap-may-be-relaxed-as-social-democrats-reveal-plans.html

Sweden’s Social Democratic Party, which polls show will oust Prime MinisterFredrik Reinfeldt’s ruling coalition in elections next month, is ready to relax a regulatory limit on mortgage financing.

The party says a rule that prevents Swedes getting loans for more than 85 percent of property values hurts first-time buyers. According to Magdalena Andersson, the party’s economic spokeswoman, the Social Democrats may seek to ease the loan-to-value cap if the regulator introduces rules that force households to amortize their mortgages. Less well-off Swedes would be exempt from such a requirement, she said.

“It’s important when we take measures that we don’t for example exclude young families,” Andersson said in an Aug. 23 interview south of Stockholm. “The mortgage cap is undeniably something that creates bigger problems for young people.”

The proposal, which would reverse a 2010 limit put in place during Reinfeldt’s tenure to contain record household debt, risks colliding with central bank pleas to slow credit growth. Riksbank Governor Stefan Ingves said last week failure to address consumer indebtedness could force the central bank to tighten monetary policy to protect financial health.

Nothing to do with higher asking prices then? If someone can't save 15% deposit clearly the answer is to lend them more.

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The party says a rule that prevents Swedes getting loans for more than 85 percent of property values hurts first-time buyers. According to Magdalena Andersson, the party’s economic spokeswoman

Won't you think of the victims? They're entitled to it, over and above the Phds, engineers, IT specialists who recoil at the asking prices, and stay renting for another 10 years.... coffee-shop runners "just wanted a home/saw it easy on the telly".... let them pay $1million dollars and have the hpc excusers saying they are victims.. are the new Friends generation, even if Kruggers himself thinking it looks a bit pricey. Can't blame them.. got appointment with lender and he has a certificate and a nice pen. Begin more bailouts

Swedish household debt soars as poll nears

Sunday, 24 Aug 2014

Johan and Alejandra are the kind of Swedes the IMF has been warning about - piling up debt to keep up with an ever-rising property market and fund a lifestyle of travel, maids and nights out.

The couple plan to buy a flat in Stockholm for 5 to 6 million Swedish crowns ($724,000 to $869,000), initially with an interest-only bank loan, among other spending plans.

"I may travel, I may want to invest in a new business," said Alejandra, who runs a cafe in the city centre.

Less than a month away from a general election, there are no votes in campaigning to stop the credit flowing, but there are fears that such Swedes could be the Achilles heel of a country that boasts a coveted AAA score from credit rating agencies Fitch and S&P.

Four in 10 mortgage borrowers in Sweden are not paying off their debt, and those that are repaying the principal do so at a rate that would on average take nearly a century.

Swedish property prices have nearly tripled in just two decades. In July, home prices rose at a double-digit pace from a year ago - the first time in more than four years.

The IMF has warned financial instability in Sweden is an increasing concern and urged a comprehensive set of macroprudential measures to temper soaring mortgage debt. Nobel Prize laureate and economist Paul Krugman has chimed in, saying

Sweden probably has a significant housing bubble.

more: http://www.cnbc.com/id/101942770

Although, not sure how this will work out for renters... seems realistic to me, provided they tighten money at the same time (unlikely?) Instead coffee-shop youngup should lever to buy some BTLs as well, at a $1m each - like in this country - full of dumb dumb landlords thinking they're the total wizard boss investor with all their HPI.... while hpcers make up new excuses for those buying flats in Brixton at £500,000 a shot at packed out open-viewings.

The asking price doesn't matter; money doesn't matter, only property matters.

Sweden’s Home Shortage Sparks Attack on Rent Regulations

By Niclas Rolander and Niklas Magnusson 2014-08-28

http://www.bloomberg.com/news/2014-08-28/sweden-s-home-shortage-sparks-attack-on-rent-regulations.html

Swedish lessons show even deflation cannot cure the house price bubble

Sweden now finds itself in much the same boat as the depressed periphery countries of the eurozone, at least in terms of price inflation

21 Apr 2014

http://www.telegraph.co.uk/finance/comment/10778474/Swedish-lessons-show-even-deflation-cannot-cure-the-house-price-bubble.html

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That's nice. Swedish socialists pimping the kids to the banks to let the older + wealthier to keep their unearned money.

Our socialists pimping our poor kids to a load of hill billy muslim kiddy fiddlers.

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