Sweden's real estate market has never been so crazy, and buyers have never been so "willful". However, cheap credit and spiraling prices may be blowing up a huge bubble-if this bubble unfortunately bursts, it may have a negative impact on the Swedish economy.

The house price is crazy.

At present, the development speed of Sweden is incomparable to that of any developed country. When the inflation rate is close to zero and the official interest rate is negative, buyers can not only enjoy interest-free loans, but also enjoy a series of tax incentives. At present, Sweden's consumer debt is about 175% of disposable income, ranking among the best in European countries.

However, the house price in Sweden is rising continuously-the house price in the capital Stockholm is about $6,530/m2. In contrast, the average price per square meter of an inch of land in London is only over $200. According to the current interest rate, most Swedes need 1 century to pay off all their mortgages.

However, the debt has not dampened the enthusiasm of Swedish buyers-they often snap up the property directly before seeing the house on the spot, and sometimes even make decisions based on the photos of the house. It has become a social phenomenon to brush Hemnet, the hottest online real estate website in Sweden. Some Swedes brush advertisements several times a day, hoping to find their favorite house.

"The house price is crazy." CathrinWentzel, a 37-year-old Swede, said. Unzer is looking for a 44-square-meter one-bedroom apartment, built in 1930s, located in the most popular King's Island area in Stockholm. The room has a fireplace, balcony and water features at the same time, and the price is about 3.8 million kronor (about 446 thousand US dollars).

Unzer estimated that she needed to spend at least 500,000 kronor more to buy the house. "I attended an auction last week, but even though my price was 900,000 kronor higher than the auction price, the other party withdrew the house." Unzer said, "They don't think this bid is high enough."

In Sweden, most real estate sales are done by SMS. Generally speaking, each message will increase the bid of10,000 ~ 20,000 USD.

The dilemma of the Swedish central bank

This week, the Swedish central bank decided to keep interest rates at a low level, which will add another fire to the already high housing prices and rents. However, the Swedish central bank is also in a dilemma: continuing to keep interest rates low will encourage family buyers; But raising interest rates will severely suppress the crazy housing market.

What is worrying is that Sweden may end up in a situation like the 2008 financial crisis. Homeowners with huge mortgages may see their house prices plummet. Therefore, they may cut spending or start putting money in the bank, which will eventually affect the economy itself.

John Hasler, the Swedish government advisory body and chairman of the fiscal policy committee, was not worried about the real estate market in the past, but now his attitude has also changed. "The acceleration and unexplained rise in real estate prices, coupled with speculation in the market, are very bad signals." He said, "This worries me, but I didn't think so a few years ago."

In the past few months, with the further soaring real estate prices, people's worries about the bubble began to accumulate.

From 2065438 to September 2005, the growth rate of mortgage loans reached a new high in four years. Even so, the Swedish central bank kept the interest rate at a historic -0.35%. "We have failed to properly handle the Swedish real estate market, which will threaten the long-term economic development." StefanIngves, governor of the Swedish central bank, said frankly.

Is the credit bubble still in short supply?

However, not everyone agrees with the judgment of the real estate bubble. Skeptics believe that the real cause of market distortion is the lack of construction in the past 10, not the excessively loose credit policy.

According to the estimation of relevant institutions in Stockholm, Sweden will need to build at least16,000 houses every year in the next 10 year to meet the demand of population growth. It is estimated that 500,000 people will move to Sweden before 2030, not to mention the unprecedented influx of refugees.

At the same time, the increase of income and the decrease of unemployment rate mean that Sweden is richer than ever. "Even if house prices rose by 15%~20% last year, people can still bear it calmly." Tommy Langstein, a Swedish real estate agent, said. The highly regulated market also means that Swedes have to wait for a long time to rent a house in Stockholm, which indirectly leads to the fact that buying a house is almost the only choice for people.

In addition, the reform plan to reduce bubbles has always been risky. Until 20 10, Swedes can still borrow money equivalent to the house price, and some people will borrow more money for house decoration. The new 85% loan limit is often circumvented. At the same time, four of the 65,438+00 Swedes, motivated by tax incentives, simply have no willingness or ability to repay their loans. But at present, even the smallest reform measures have encountered legal difficulties, such as the government's plan to tighten the mortgage conditions of loans.

Before the door of opportunity closed, some Swedish buyers were still scrambling to buy their dream property, selectively ignoring the discussion about the bubble. "I once discussed this issue with a real estate agent, and he said it was just a discussion." Unzer said.

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