onsdag 18 januari 2012

Investors Ignore Nordic Housing Bubble Risks as Hunt for Havens Picks Up

The notion that the Nordic region is a haven “is really a false perception,” said David Deddouche, a foreign-exchange strategist at Societe Generale SA in Paris, in an interview.“The risk is that at some stage there is a domestic development which pushes every investor out of the market at the same time and it is going to squeeze heavily. It’s quite dangerous.”

The risks aren’t reflected in the countries’ bond or currency markets, which investors are treating as havens from the euro area thanks to fiscal surpluses in Sweden and Norway. Sweden pays less than Germany to borrow for 10 years and Norway’s government bond yields slumped to a record-low last week, approaching parity with the largest euro-area economy.

Household debt in Norway will surge to 204 percent of disposable incomes this year, the highest since at least 1988, the central bank estimates. House prices doubled from 2001 to 2010, and jumped an annual 8.5 percent last month, Norway’s Real Estate Brokers Association said on Jan. 2.

In Sweden, the International Monetary Fund said in June homes “appear overvalued with enduring price falls likely,”after values tripled over the past 15 years. House pricesdropped 2 percent last quarter from a record, coming off a peak that had been fueled by tax cuts, historically low central bank policy rates and as the economy in 2010 rebounded at the fastest pace in 40 years.

and here is an interesting chart of debt to GDP. As shure is that the overall financial debt is the challenge relative the UK economy the challenge for Swedes is all relataed not to geverment but to household (housing) debt:


In fact one third of all housholds in sweden has loans 7 times exeeding their income. Only quite minute interest hikes thus will cause a significant impact on the overall Swedish housing market.

Hushållens skulder har ökat kraftigt i både nominella termer, 3 323 procent, och reala, 714 procent. För att förstå om skulderna har vuxit sig allt för stora för hushållen jämför vi olika värden med skulderna. Störst ökning har skuld mot disponibel inkomst med 110 procent. En förklaring kan vara att många av de andra måtten, exempelvis bostadstillgångar, stiger med de ökade lånesummorna. Effekten blir att kvoten inte stiger trots att skulderna ökat.

Det finns stora skillnader mellan hushållens skuldnivå. Snittbelåningen är 45 procent, medan var tredje låntagare vid en mätning 2009 var belånad över 80 procent. De med störst bolån är unga som nyligen köpt sitt boende till dagens höga priser. Skulder finns även i bostadsrättsföreningar vilket ökar hushållens skuld utöver den som togs för att finansiera bostadsrättsköpet.


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