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Swedish housing boom now over


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Sounds like the Scandi's are in the same sinking boat we are in.  I knew things were bad in other parts of Northern Europe but had no idea that it was getting that bad.  This is probably working to our advantage because of the way financial institutions are linked and this really could be the Tsunami that tips the balance.  Does make you wonder what to with your 'investments' though?

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1 hour ago, Democorruptcy said:

In 2016 Sweden cut the maximum mortgage term to 105 years when the average was 140 years

http://www.telegraph.co.uk/personal-banking/mortgages/sweden-cuts-maximum-mortgage-term-to-105-years-the-average-is-14/

70% were Interest Only but they also decided to start forcing part repayment

https://uk.reuters.com/article/sweden-mortgages/sweden-plans-mandatory-mortgage-repayment-to-cool-housing-market-idUKL5N11B0GM20150905

Crazy

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4 hours ago, Democorruptcy said:

In 2016 Sweden cut the maximum mortgage term to 105 years when the average was 140 years

http://www.telegraph.co.uk/personal-banking/mortgages/sweden-cuts-maximum-mortgage-term-to-105-years-the-average-is-14/

70% were Interest Only but they also decided to start forcing part repayment

https://uk.reuters.com/article/sweden-mortgages/sweden-plans-mandatory-mortgage-repayment-to-cool-housing-market-idUKL5N11B0GM20150905

This is nuts. It's almost impossible to believe. Sweden is one of the most sensible places I've ever been. It's like Switzerland but with better looking people and more coastline. 

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2 hours ago, adarmo said:

This is nuts. It's almost impossible to believe. Sweden is one of the most sensible places I've ever been. It's like Switzerland but with better looking people and more coastline. 

I would say that's true on the surface, but I get the feeling there are lots of tensions underneath.

Also, woe and betide you if you're different and/or think differently to the socially accepted norm.

 

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11 minutes ago, Calcutta said:

Only Swedes I know hate the place. 

i stayed in stockholm for a week about 12 years ago and the consensus was that london was a far nicer place to live.

locals complained about beer costing £6 a pint then and not many places to go in the evening. 

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11 hours ago, longgone said:

i stayed in stockholm for a week about 12 years ago and the consensus was that london was a far nicer place to live.

locals complained about beer costing £6 a pint then and not many places to go in the evening. 

 Ive been there five times in the past couple of years (Stockholm, Malmo, Motala) and i quite liked it but was always glad you be home.

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16 minutes ago, adarmo said:

 Ive been there five times in the past couple of years (Stockholm, Malmo, Motala) and i quite liked it but was always glad you be home.

Norway is similar, I lived in Oslo for 10 years and they had HPI then HPC twice in that period. Unlike the UK house loans get tax relief so people keep topping them up. This leads to an asset rich cash poor society. Oh and due to the currency fluctuations Guinness was the equivalent of £11 a pint at one stage :blink:.

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Hi, Swedish person here. The telegraph article is dodgy and this was discussed at the time. It's all about banning interest-only and making 'partial repayment' mortgages mandatory. Some quack went for a headline based on an obscure average repayment time.

Positive news that falls are finally being noticed - as we know on this forum it is all about lending. The same lack of housing supply nonsense was being spouted back home. Not sure if you've noticed but Sweden is hardly the densest populated country in the world...

 

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23 minutes ago, saderic said:

Hi, Swedish person here. The telegraph article is dodgy and this was discussed at the time. It's all about banning interest-only and making 'partial repayment' mortgages mandatory. Some quack went for a headline based on an obscure average repayment time.

Positive news that falls are finally being noticed - as we know on this forum it is all about lending. The same lack of housing supply nonsense was being spouted back home. Not sure if you've noticed but Sweden is hardly the densest populated country in the world...

 

Amazing, it really is a global con isn't it? You have to wonder when countries like the USA had a bubble, as everyone snapped up property before it was too late - look at the size of the place! Even the UK has no shortage except in some parts of the SE, the rest of the country has a glut of property. Look at Liverpool, low occupancy for decades, yet look at house prices, same crazy deluded nonsense fuelled by the availability of cheap credit.

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31 minutes ago, longgone said:

maybe it`s changed :lol:  it was 2004 when i was there.  £15 for two pints of beer. 

Wow - it's pricey for sure but I don't recall it being that crazy. Maybe £5 or £6 for a beer in the hotel. If I'm honest though the most indulgent of my trips were on the company dime. 

Just fascinated that a country with such a sensible veneer could be so reckless with mortgages. Maybe they've never heard of Japan. 

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31 minutes ago, saderic said:

Hi, Swedish person here. The telegraph article is dodgy and this was discussed at the time. It's all about banning interest-only and making 'partial repayment' mortgages mandatory. Some quack went for a headline based on an obscure average repayment time.

Positive news that falls are finally being noticed - as we know on this forum it is all about lending. The same lack of housing supply nonsense was being spouted back home. Not sure if you've noticed but Sweden is hardly the densest populated country in the world...

 

hej på dig Saderic!

I recall people complaining about prices in Stockholm but I think you're right with respect to the perception of a shortage v the reality. In Motala there seemed to be a great deal of fairly simply but well constructed apartments (and in Malmo). A friend who recently moved there with his Swedish wife has just bought in Malmo and I think prices are actually more affordable here. 

Seems like they were just headline grabbing then. I guess interest only loans have a repayment date only as a technicality?

Edited by adarmo
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31 minutes ago, saderic said:

Hi, Swedish person here. The telegraph article is dodgy and this was discussed at the time. It's all about banning interest-only and making 'partial repayment' mortgages mandatory. Some quack went for a headline based on an obscure average repayment time.

Positive news that falls are finally being noticed - as we know on this forum it is all about lending. The same lack of housing supply nonsense was being spouted back home. Not sure if you've noticed but Sweden is hardly the densest populated country in the world...

 

Thanks for that, of course with the right (or rather wrong) planning restrictions and enough centralization any country can have a shortage of housing.  In Russia many people in St Petersburg live in housing that makes London look good - but it is hardly a densely populated country.

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15 minutes ago, adarmo said:

 

Just fascinated that a country with such a sensible veneer could be so reckless with mortgages. Maybe they've never heard of Japan. 

let me guess, the people who make the rules are the ones that receive the most benefit of high prices ? 

That is why they are reckless. GREED  

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11 hours ago, iamnumerate said:

Thanks for that, of course with the right (or rather wrong) planning restrictions and enough centralization any country can have a shortage of housing.  In Russia many people in St Petersburg live in housing that makes London look good - but it is hardly a densely populated country.

Agree the density argument is simplistic. In central Stockholm there may be a shortage argument but the key point is that the Swedish bubble stretches across the country. I'm from a less than popular part of the south and house prices have more than doubled in the last 5-10 years. Land is not that expensive in my parts and some of the more savy people I know have self built at a reasonable cost. But the majority is drawn to fancy developments, bit of a prestige thing, and renting from the bank is cheaper than ever so who cares about the ticket price.

I think there are some good lessons to be learnt here, especially if the recent falls are sustained. Keep in mind that Sweden is mostly free from the disgrace of BTL / property hoarding, and interest rates remain at rock bottom (for now) so any change is surely down to enforced changes to lending conditions.

Fans of monetary policy should also study the Swedish experience. We infamously tried hiking already in 2010, despite deflationary pressure on the CPI measure. This was supposedly motivated by concerns around blowing up housing bubbles (the last one still just about in memory of policymakers). When Sweden slipped into negative CPI territory, this approach was naturally ridiculed by the global establishment, economists and central banksters. To avoid being outcasts we've now had a complete policy reversal with Riksbanken more dovish than most, blowing up the mother of all bubbles in the process. The latest set of lending restrictions is definitely an attempt to defuse the bubble without the embarrassment of negative CPI (things getting cheaper, oh the horror).

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  • 433 Brexit, House prices and Summer 2020

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      • down 5% +
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      • up 5%



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