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Not trying to take away from you, that it is difficult. Just saying that it hasn't changed too much over the past 50 years – it was also difficult for the prev

Not trying to take away from you, that it is difficult. Just saying that it hasn't changed too much over the past 50 years – it was also difficult for the previous generations. At least in Denmark, the situation is better now than it has been earlier, despite the market being heated. You can comfortably buy a house at around 4x annual salary with reasonable savings (~10% down payment).

marginalia_nu 3y ago
Swedish housing prices have increased something like 300% the last 20 years. Salaries have not. In fact, nothing has. This is in part due to interest payments being tax deductible, a measure to help the Swedish housing market bounce back from the housing crash in the mid '90s. The government "forgot" to remove that insane policy even once the market had recovered, since it would be unpopular for everything to be more expensive, even throughout the negative interest rate years they didn't do anything about this. Which means everyone and their grandmother has loans up to their ears, taken back when interests were basically free. ... so now interests have gone up by like 5 percentage points and everyone with a loan is in struggling, that interest subsidy policy is going nowhere in a hurry, meanwhile it still drives up prices and creates an ever-widening gap between those who own and those who can't afford the down payment because the market has seized up entirely since nobody wants to realize the loss of selling their house for less than their mortgage.
- madsbuch 3y ago
  also the interest rate has gone down from 20% to close to 0%.the rate is going up again, and we should see the housing market correct itself, but it usually takes a couple of years - in particular, my take is that the interest rate does not go down as long as we expect it to (ie. we don't change the behaviors that are required for the banks to lower the rate). regardless, in Copenhagen you can get a 2 room apartment for 2.5m DKK. if you have a down payment of 200k you can buy this with a salary of roughly 550k a year, which indeed is reasonable as you live in Copenhagen. if you are a couple, then you are at 5m kr where you can start to get houses in the suburb or quite nice apartments. personally I prefer a market with higher interest rates such that the price is not just set as multiples of a median salary.

marginalia_nu 3y ago

Swedish housing prices have increased something like 300% the last 20 years. Salaries have not. In fact, nothing has. This is in part due to interest payments being tax deductible, a measure to help the Swedish housing market bounce back from the housing crash in the mid '90s. The government "forgot" to remove that insane policy even once the market had recovered, since it would be unpopular for everything to be more expensive, even throughout the negative interest rate years they didn't do anything about this. Which means everyone and their grandmother has loans up to their ears, taken back when interests were basically free. ... so now interests have gone up by like 5 percentage points and everyone with a loan is in struggling, that interest subsidy policy is going nowhere in a hurry, meanwhile it still drives up prices and creates an ever-widening gap between those who own and those who can't afford the down payment because the market has seized up entirely since nobody wants to realize the loss of selling their house for less than their mortgage.

madsbuch 3y ago
also the interest rate has gone down from 20% to close to 0%.the rate is going up again, and we should see the housing market correct itself, but it usually takes a couple of years - in particular, my take is that the interest rate does not go down as long as we expect it to (ie. we don't change the behaviors that are required for the banks to lower the rate). regardless, in Copenhagen you can get a 2 room apartment for 2.5m DKK. if you have a down payment of 200k you can buy this with a salary of roughly 550k a year, which indeed is reasonable as you live in Copenhagen. if you are a couple, then you are at 5m kr where you can start to get houses in the suburb or quite nice apartments. personally I prefer a market with higher interest rates such that the price is not just set as multiples of a median salary.