Posted on 08/24/2014 6:03:41 PM PDT by Lorianne
Johan and Alejandra are the kind of Swedes the IMF has been warning about - piling up debt to keep up with an ever-rising property market and fund a lifestyle of travel, maids and nights out.
The couple plan to buy a flat in Stockholm for 5 to 6 million Swedish crowns ($724,000 to $869,000), initially with an interest-only bank loan, among other spending plans.
"I may travel, I may want to invest in a new business," said Alejandra, who runs a cafe in the city centre.
Less than a month away from a general election, there are no votes in campaigning to stop the credit flowing, but there are fears that such Swedes could be the Achilles heel of a country that boasts a coveted AAA score from credit rating agencies Fitch and S&P.
Four in 10 mortgage borrowers in Sweden are not paying off their debt, and those that are repaying the principal do so at a rate that would on average take nearly a century.
Swedish property prices have nearly tripled in just two decades. In July, home prices rose at a double-digit pace from a year ago - the first time in more than four years.
The IMF has warned financial instability in Sweden is an increasing concern and urged a comprehensive set of macroprudential measures to temper soaring mortgage debt. Nobel Prize laureate and economist Paul Krugman has chimed in, saying
(Excerpt) Read more at cnbc.com ...
Think it has anything to being overrun by Muslims?
Sounds more like people trying to live beyond their means.
It always starts small, than eventually becomes unsustainable because people weren’t willing to make the small adjustments necessary to keep themselves in check.
The unfortunate thing is that most changes, if one was willing, are usually small and imperceptible for most people. But they aren’t willing to do it.
a 50 year mortgage without touching the principle? I call that ‘renting’.
Sweden is a socialist country and is quickly running out of other people’s money.
Where the excerpt ended and where I stopped reading.
“Sounds more like people trying to live beyond their means.”
Eat, drink & be merry, for tomorrow ISIS arrives.
You’re smart. ;-)
I thought Sweden was a paradise.
“Sweden’s centre-right government has asked regulators to come up with a plan to force repayment schedules. It has set a November deadline - which if opinion polls are right will be two months after it loses power to a centre-left opposition.
The Social Democrats have not laid out plans on the matter...”
LOL! Isn’t democracy grand?
Good article.
I thought Sweden was the socialist utopia America was aiming for. Everything is perfect there. Education is free. Health care is free. I KNOW!!! Sweden needs to import more third world immigrants who refuse to adopt their host country’s culture and lavish welfare benefits on them.
It can’t be that. Muslim diversity is the best kind after all!
Yes, of course. If Swedish companies continue performing like they've done recently (look at H&M, IKEA, Skype, Ericsson, Volvo, Electrolux - just to mention a few) people in Sweden will be able to pay their hefty loans. It, actually, is that simple. As long as workers are highly productive and earn well, they can borrow a lot as well as consuming a lot.
Today, the economy of Sweden is sound. That was not the case 25 years ago when my country discouraged Capitalism and entrepreneurship.
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