• Sweden edition
 

Sweden has housing bubble: politician

Published: 24 Jul 2011 10:30 GMT+02:00
Updated: 24 Jul 2011 10:30 GMT+02:00

"A drop in house prices would hit growth, employment and state finances," writes Waidelich, who also expresses concern for indebted families, who would be hard struck by a burst bubble.

Waidelich cites Nobel laureate Joseph Stiglitz's definition of a bubble, claiming Sweden's housing market is at risk of experiencing these conditions.

"If the reason that the price is high today is only because investors believe that the selling price will be high tomorrow – when ”fundamental” factors do not seem to justify such a price – then a bubble exists.”

Waidelich criticises the governing centre-right Alliance for several policies that he feels have worsened the situation on the housing market, such as the lowered housing tax, the ROT tax deductions for building, and the insufficient amount of new apartments built.

"Inflated housing prices are a global phenomenon, but several points of the government's economic policies have fueled this problem," he writes.

In order to soften the blow from falling prices, however, Waidelich is open for cooperation over party lines. He also suggests that subletting apartments should become easier.

TT/The Local/cg (news@thelocal.se)

Your comments about this article

13:52 July 24, 2011 by canuk
this is not rocket science, the drop in prices is a result of the 15% down one must now do to secure a mortgage...
18:58 July 24, 2011 by bjorkon
Prices have hardly fallen yet .. and most banks are only too glad to lend you the other 15% unsecured at a higher rate of interest. But since this is the only part you really have to pay off in full you have another reason for the bubble. As long as they dont change the rules too much or whack up interest rates or China goes pop (which it ight be soon) and Swedes lose too many jobs i will carry on inflating.
21:15 July 24, 2011 by Abe L
Canuk already touched base on one of the biggest problems in Sweden today. The enormous downpayment you need to make when you wish to pursue getting a mortgage for a house. In addition to the 15% downpayment there are another few taxes that you need to pay that combined make up almost another 5% of the property's value.

The government would do well by scrapping those taxes and force banks to hand out 100% mortgages according to your solvency. It's very hard to save up money in Sweden simply because the government likes to strip you off every penny you earn. If they can't change the current situation accordingly, there should be a tax relief for those wanting to save up to buy a house.
21:26 July 24, 2011 by DamnImmigrant
This is such a non-issue except to people trying to sell right now.

The price goes down, then the price goes back up. The only people who loose are the people who do panic selling. Patience is the key word with investments.
21:40 July 24, 2011 by Acero
DamnImmigrant, you bloody damn immigrant 'ya! Of course this issue affects more than the people who are trying to sell right now! A housing bubble affects most of a generation ...ok, it might only be the people wishing to sell who loose in real and nominal terms at that given time but the prices fall for a reason, and the ones who are still paying for over-priced housing, are being crucified by high repayments.

When house prices fall it is generally in conjunction with a slow down in economic growth AND activity. meaning people arent paid the sort of bonuses they WERE getting etc etc and ya would generally have more (if even only by point zero percentages) people unemployed.

(love that name!!)

Abe....although your argument was good.....you made the cardinal sin of saying that the banks should hand out 100% mortgages. Never ever should this happen. Purchasers have to learn to save when buying such a large valued asset. The higher the downpayment, the more realistic the house prices will be.

A 100% mortgage takes the value of the property out of the equation and solely looks at ability to repay.

Where as when you have a deposit to put down on a house, it reflects a genuine monetary level. Which the market will dictate never becomes exorbitant.

When china goes..say good buy to australia and vancouver. two of the worlds worst housing bubbles
12:53 July 25, 2011 by Nemesis
100% mortgages lead to US style bankruptcy of the entire country.

100% mortgages should never be allowed.
Today's headlines
Politics
Nuclear freeze agreed by new government
A nuclear power station in Forsmark, Sweden. Photo: TT

Nuclear freeze agreed by new government

Sweden's Social Democrats and Greens Party have announced a coalition agreement to halt nuclear energy development. READ  

International
Sweden rethinks Afghan translators' asylum
A Swedish soldier in Afghanistan. Photo: TT

Sweden rethinks Afghan translators' asylum

The Migration Court in Malmö has ruled that Sweden's Migration Board was wrong to reject the residence applications of seven Afghan interpreters without assessing their protection needs. READ  

The Local List
Top five winter festivals in Sweden
Speak Percussion will perform at Connect in Malmö in November. Photo: Connect

Top five winter festivals in Sweden

Autumn has swept into the country and chilly days lie ahead. But there are plenty of winter festivals where you can warm up in the coming months. With tickets already selling fast, here are The Local's top tips. READ  

Business
Swedish Saab plant sheds a third of workers
Workers at the Saab plant in Trollhättan. Photo: TT

Swedish Saab plant sheds a third of workers

Swedish car maker Saab has announced it has axed 155 workers, close to a third of its workforce. READ  

International
Sweden's 'most dangerous art' on sale
A Danish site is selling the works that the Swedish state wants destroyed. Screenshot: www.entartetekunst.dk

Sweden's 'most dangerous art' on sale

Work by controversial jailed Swedish artist Dan Park is on sale online and could reach a gallery in Copenhagen, despite a previous exhibition being pulled. READ  

Society
Sweden is 'second best' place to grow old
Pensioners in Sweden. Photo: TT

Sweden is 'second best' place to grow old

Sweden has dropped to second place in an annual index measuring the quality of life of elderly people in 96 countries around the world. READ  

National
Top Swedish skier killed in Chile avalanche
Andreas Fransson, left. Photo: Markus Alatalo

Top Swedish skier killed in Chile avalanche

UPDATED: The bodies of two of the world's top skiers, Sweden's Andreas Fransson and JP Auclair from Canada, were found on Tuesday after they were reported missing in an avalanche in the Andes. READ  

Politics
Coalition promise to boost welfare and jobs
Social Democrat leader Stefan Löfven. Photo: TT

Coalition promise to boost welfare and jobs

UPDATED: The Social Democrats and the Greens have agreed to raise unemployment payments and promised to create more jobs in the construction industry, The Local has learned. READ  

National
Ikea recalls elk pasta
Two types of pasta are affected. Photo: IKEA

Ikea recalls elk pasta

Ikea has pulled two different types of elk-shaped pasta from its stores in Sweden. READ  

Presented by Regus
How to get your own great office in Stockholm
A woman using a Regus workspace. Photo: Regus

How to get your own great office in Stockholm

Stockholm's business climate is hotter than ever, which leaves start-ups and business travellers hunting high and low for flexible office space. The solution is easier than they think. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
National
Apology for Swedish model's stolen photos
Politics
New coalition agrees on defence and migration
Fastighetsbyrån
Gallery
Property of the week: Botkyrka
Education
New government to make school compulsory to 18
Politics
Sweden Democrat wins Deputy Speaker spot
Blog updates

28 September

Spoiled Doyle (Blogweiser) »

"What you gotta watch out for in Sweden is the good stuff. http://www.youtube.com/watch?v=Re_EzUe6xpI In Sweden, it’s the good things you have to watch out for. Video on @TheLocalSweden http://t.co/rAb8eGFdTD pic.twitter.com/w37YYwMXy1 — Joel Sherwood (@joeldsherwood) September 29, 2014 " READ »

 

26 September

 (The Local Sweden) »

"Hi readers, Autumn swept into Sweden at the start of this week with snow in the north of the country and flooding in the south. As well as a change in the weather, Sweden’s change in political direction became clearer, with Social Democrat leader Stefan Lofven formally announcing his party would work with the Greens as..." READ »

 
 
 
National
Swedish scientists sneak Bob Dylan lyrics into articles
Lifestyle
The five best Swedish songs of the month
Gallery
People-watching: September 28th
National
When Italian style meets Swedish simplicity
Lifestyle
Review: Sweden's first alcohol-free nightclub
Gallery
In Pictures: The MS Estonia disaster
Lifestyle
Ten things expat women notice in Sweden
Politics
What's next on Sweden's political stage?
Gallery
Sweden's 2014 election: Most memorable moments
Society
What's on in Sweden
Gallery
People-watching: September 24th
Seaman Oliver Gee with his first lobster
Lifestyle
How to catch the first lobster of the year
Gallery
In Pictures: Fredrik Reinfeldt through the years.
Society
Plucked out of Canada for love and guitars
Politics
How Sweden Democrats went mainstream
Politics
Scandinavia and Scotland: closer links?
Sponsored Article
How to start a business in Stockholm
Society
Why is Stockholm's Södermalm so cool?
Politics
Sweden elections: Who's who?
Sponsored Article
Introducing… Insurance in Stockholm
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

866
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se
If you want to drink, that’s your business.
If you want to stop, we can help.

Learn more about English-language Alcoholics Anonymous in Sweden. No dues. No fees. Confidentiality assured.
AA-EUROPE.ORG/SWEDEN