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> In August, Jyske became the first to offer a negative rate on a home loan, in effect paying customers 0.5% to borrow money for 10 years. Surely this can't en

by lawn 7y ago

> In August, Jyske became the first to offer a negative rate on a home loan, in effect paying customers 0.5% to borrow money for 10 years. Surely this can't end well? Here in Sweden the house prices are so high in cities it's almost impossible for young people to get a house, sometimes even an apartment. We've been waiting for the housing bubble to pop a while, but how long must we wait? The longer we do the worse it'll be.

alkonaut 7y ago
Prices have been stagnant for some time now, and tighter restrictions on new loans hopefully reduces the number of people that would be under water if prices dropped 15 or 25%. It would have a pretty bad effect on the economy as a whole though. I’d manage, but would stop spending for years.
- tom_mellior 7y ago
  > I’d manage, but would stop spending for years. If what happened, exactly? If you already "own" a home and are paying back a loan on it, a price drop of other housing units would not affect you in any way unless you felt that you needed to sell right at that moment. Would your payments rise from falling housing prices? Or your income decrease?
  - alkonaut 7y ago
    If prices dropped so my loan was 100% or 110% of the value, I’d try to get back to a reasonable level (85% say) as quickly as possible. This would require saving more and spending less than I’d otherwise do. Even if I have no plans on selling, you never know when you might be forced to sell (death, divorce, illness, work, ...).
toxik 7y ago
Call me cynical but I believe that this will not happen since the people in power are going to get hurt by such a correction. They will try their damned best to prevent it happening. The Swedish central bank (Riksbanken) has also stated as much, and the current policy is very much based on this.
detritus 7y ago
> We've been waiting for the housing bubble to pop a while, but how long must we wait? The longer we do the worse it'll be. As someone who moved to London far too long ago and has expected some miraculous drop in house prices every time the economy catches a sniffle - stop waiting. It'll never happen. I mean, it may do, but to all practical degrees, house prices will creep upwards forever. There's no 'right time' to get on the ladder, other than when you can actually afford. Now all I hope is that I get out of London before I get too bitter about not having simply bit the bullet a decade or so ago.
- lawn 7y ago
  Just as an anecdote we moved away. Our friends moves to the city and buy houses for 10x what we bought ours for, and smaller ones too. Of course it's not possible for everyone and there are sacrifices with living in a small community as we do.

by lawn 7y ago

alkonaut 7y ago

Prices have been stagnant for some time now, and tighter restrictions on new loans hopefully reduces the number of people that would be under water if prices dropped 15 or 25%. It would have a pretty bad effect on the economy as a whole though. I’d manage, but would stop spending for years.

tom_mellior 7y ago
> I’d manage, but would stop spending for years. If what happened, exactly? If you already "own" a home and are paying back a loan on it, a price drop of other housing units would not affect you in any way unless you felt that you needed to sell right at that moment. Would your payments rise from falling housing prices? Or your income decrease?
- alkonaut 7y ago
  If prices dropped so my loan was 100% or 110% of the value, I’d try to get back to a reasonable level (85% say) as quickly as possible. This would require saving more and spending less than I’d otherwise do. Even if I have no plans on selling, you never know when you might be forced to sell (death, divorce, illness, work, ...).

toxik 7y ago

Call me cynical but I believe that this will not happen since the people in power are going to get hurt by such a correction. They will try their damned best to prevent it happening. The Swedish central bank (Riksbanken) has also stated as much, and the current policy is very much based on this.

detritus 7y ago

> We've been waiting for the housing bubble to pop a while, but how long must we wait? The longer we do the worse it'll be. As someone who moved to London far too long ago and has expected some miraculous drop in house prices every time the economy catches a sniffle - stop waiting. It'll never happen. I mean, it may do, but to all practical degrees, house prices will creep upwards forever. There's no 'right time' to get on the ladder, other than when you can actually afford. Now all I hope is that I get out of London before I get too bitter about not having simply bit the bullet a decade or so ago.

lawn 7y ago
Just as an anecdote we moved away. Our friends moves to the city and buy houses for 10x what we bought ours for, and smaller ones too. Of course it's not possible for everyone and there are sacrifices with living in a small community as we do.