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cromulent

In 2016, Sweden limited mortgage terms to 105 years.

This was because in 2013, the average term was 140 years.

https://www.thelocal.se/20160324/sweden-limits-mortgage-loan...

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Its tricky to compare debt between countries since it works differently.

In Sweden you can't 'walk away' from your mortgage like in the US for example. This means its much safer for the bank to lend money and that interest rates are very low. Swedish mortgage default rates are very low.

A bit more precise: non-recourse ('walk-away') mortgages are only the norm in 11 or 12 states in the US: https://en.wikipedia.org/wiki/Nonrecourse_debt#Footnotes footnote 3,4

Yes, I heard that with Sweden mortgage you're not really buying your house but kind of renting it to the bank. You know you're never going to pay it off.

This used to be true, but you are now required to pay down the loan by law. Restrictions are the following:

- Maximum loan is 85% of property value (min down payment 15%) - Annual pay down 2% until at 75% of property value - Annual pay down 1% until at 50% of property value - An additional 1% annual pay down if you have borrowed more than a multiple of your annual income (either 4.5x or 5.5x, can't remember exactly)

Used to be that you just borrowed 100% and paid down nothing, kind of absurd to be honest.

Where I live (a city about 2 hours from Stockholm) paying it off over 20-30 years is still doable, at least as long as itnerest stays below 3%. We payed off almost 15% of our house in about 5 years.

Whether it is financially sound is another matter. Interest rates have been low for many years, and investing has been a better choice for some time. Many pay their houses off to about 50% and then leave it there at the default mortgage, only loaning more money when something needs to be done on the house.

Whether it is financially sound is another matter.

Yea, this is a big cause of the current 'problem'. It's not so much that people cannot pay off their mortgage in 30ish years, it's that the current financial climate heavily disincentives people from doing so.

Sweden is among the emptiest countries in Europe, with massive surplusses of wood. How on earth have they managed to create shortage of housing and over century long mortgages? I have an almost certainity that the maybe dozen of aristocratic/oligarch Swedish families owning the economy of the country made a private grange from the entire country.

> How on earth have they managed to create shortage of housing

Because people want to live close to their jobs which in modern society is mostly in cities. It does not really matter how much empty space/forest you have around them if that means living outside of all the services/too long commute.

As far as I know the prices are high only in vibrant areas. You can have houses in middle on nowhere in mid- and north Sweden for very little. So, it's essentially the same as in other countries with low nominal population density, in which the density is concentrated around attractive cities.

>I have an almost certainity that the maybe dozen of aristocratic/oligarch Swedish families owning the economy of the country made a private grange from the entire country.

Here you go: https://en.wikipedia.org/wiki/Wallenberg_family

Since when has the housing market been dictated by available space in a country? Are you not puzzled that house prices in Canada aren't ~0?

Sweden is more hermetic and not that open to inflow of American, Arab, and Chinese cash into their real estate market. For European rich their real estate market is not that attractive. My hypothesis is that the situation is intentionally designed to be stuffy.

Why does this matter if the claim is that the availability of space in a country seriously affects housing prices? I agree that in very very constrained countries like Singapore this is the case, but the space available to a country does not matter for housing prices beyond a certain point.

The original claim was that it does. Why does it matter that Canada sees more foreign money flowing in? The space is essentially limitless, so prices should drop to zero. Except they don't, because it's not about space. It's about living in small, pleasant regions with a good economy where others also want to live. That drives up the prices, be it Toronto or Stockholm. It doesn't matter that both countries have essentially limitless land elsewhere.

Edit: Also, the claim that Sweden is "more hermetic" is also a bit silly. You are aware of freedom of movement in the EU, right?

They are monarchy with well established old-money elite and their own currency, staying outside of NATO. I can easily travel to Sweden (not exactly now though) but not buy real estate there that easy at all.

> They are monarchy

A parliamentary constitutional monarchy, just like Canada. And why would it matter in the first place?

> with well established old-money elite and their own currency

Canada doesn't have these things?

> staying outside of NATO

How does military alliance memberships matter when discussion house prices in two peaceful, stable democracies who are unlikely to be in defensive wars any time soon?

> I can easily travel to Sweden (not exactly now though) but not buy real estate there that easy at all.

OK. What does it matter? The approximately 500 M EU/EEA citizens can. That makes Sweden very much not "hermetic".

My theory: small countries have single-center-syndrome: they can (either through some economic or cultural reason) only support one major center, their capital region. Their (thought to be) to small for multiple centers. This drives up prices in the capital region, because people can't conceive and consequently don't create secondary centers to avoid the issue of land value.

In most of the country (by area) you can still buy a house for few months salary. There have been examples of sea view land given away (If you promise to build and move in)

Land (and thus homes) is expensive near cities, but cheap elsewhere.

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