• 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)

Don't miss...X
Left Right

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
Cops arrest 17 people for gang murder
Police at the scene. Photo: Niklas Luks/TT

Cops arrest 17 people for gang murder

Seventeen people were arrested during the early hours of Tuesday after a man was shot dead in central Sweden. Several of them were already known to the police for gang crimes. READ  

Swedish expert slams Norway terror alert
Terrorism expert Ranstorp and a policeman in Norway. Photos: TT

Swedish expert slams Norway terror alert

A Swedish terrorism expert has come forward criticizing the way Norway has handled its recent terror threat, saying the day the threat began was a "total problem in intelligence". READ  

Swedish nurse reported for patient 'death wave'

Swedish nurse reported for patient 'death wave'

A nurse in southern Sweden has been reported for abuse at a senior care centre after she allegedly waved to a colleague with the hand of a recently-dead resident. READ  

Pandas Plopp and Polly born in Swedish zoo
Plopp and Polly, the offspring of Pandora the panda. Photo: Kolmården

Pandas Plopp and Polly born in Swedish zoo

A pair of red panda cubs have been born in central Sweden, a wildlife park announced on Monday. READ  

Green Party ranked 'most gay friendly' in Sweden

Green Party ranked 'most gay friendly' in Sweden

The Green Party's views are 88.6 percent "LGBT-friendly", a Swedish LGBT rights group claimed on Monday, making the Greens the most gay-friendly of all Sweden's parliamentary parties. READ  

Man held on suspicion of murdering wife
Police on the scene. Photo: Johan Nilsson/TT

Man held on suspicion of murdering wife

Updated: Police arrested a man in Copenhagen on the suspicion of killing his wife, whose body was found at the couple's home in southern Sweden during the weekend. READ  

Arlanda, Stockholm
Lightning bolt grounds flight to New York

Lightning bolt grounds flight to New York

Swedes bound for New York learned on Monday morning that their plane had been cancelled after it was hit by lightning during Sunday's thunderstorm. READ  

Elderly Swedish man stripped of his 35 cats

Elderly Swedish man stripped of his 35 cats

The County Administrative Board of Skåne has decided to confiscate the 35 cats of an 81-year-old man who was forbidden from having more than nine of the furry felines. READ  

Wild weather set to strike Sweden anew
Photo: TT

Wild weather set to strike Sweden anew

With Sunday's thunderstorm reported as the worst of the year so far, Sweden is bracing for round two on Monday as meteorologists predict more of the same. READ  

Swedish youth suicides hit 25-year high

Swedish youth suicides hit 25-year high

Last year 1,600 people in Sweden took their own lives - and for Swedes aged 15 to 24, the numbers haven't been so high since 1989. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Gallery
People-watching, June 26th - 28th. Get inside Stockholm's hottest nightclubs
Gallery
Top ten Swedish taboos
Society
Seven-year-old Swede cycles to Berlin
Politics
'Gaza conflict needs help, not empty rhetoric'
Society
Swedes voted 'most beautiful' in the Nordics
Blog updates

27 July

Approaching Stockholm (Around Sweden in a kayak) »

"I woke up in the comfort of my own little cabin on Eva and Rolf’s boat, it was 7:30am and I was feeling a bit groggy after a couple of beers with all the lovely locals the night before. The previous day had really taken its toll on my body and I was very stiff and..." READ »

 

24 July

Sharing our Pride: Celebrating Love & the LGBT Community! (Stockholm in my American Heart) »

"It’s mid- July in Stockholm, and with much of the city on vacation, things can seem a little quiet – the streets, the bus, and the grocery store. One thing that has not paused for a summer break, though, is preparation for Stockholm’s Pride Festival, which will take place from July 28 to August 2...." READ »

 
 
 
Business & Money
Sweden demands EU clarity on Bitcoin tax
National
Swedish organic sales enjoy 'amazing' growth
Photo: Johan Nilsson/TT
Society
What's On in Sweden
Gallery
People-watching July 23
National
Swedish cops elect not to shoot 'angry elks'
Business & Money
New alcohol retail rules threaten micro-breweries
Gallery
People-watching Båstad
Business & Money
Sweden falls to third in global innovation index
Society
Swedish ornithologists keep webcam watch
Photo: Andreas Nordström/Image Bank Sweden
Gallery
Top ten Swedish beach hot spots
Tech
Swedish Wiki vet sets new content record
Photo: Fastighetsbyrån
Lifestyle
In Pictures: The Local's Property of the Week
Photo: Finest.se
Gallery
People-watching July 15-16
Photo: Ola Ericson/Image Bank Sweden
Society
What's On in Sweden
Photo: Lisa Mikulski
National
Hope springs eternal for expat pet shop owner
Gallery
Princess Estelle steals limelight at mum's birthday
National
Swedes risk infants' lives by covering up prams
National
Swede runs for office just using Bitcoin funds
Sponsored Article
Introducing... Your finances in Stockholm
Sponsored Article
Introducing... Housing 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

729
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
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
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