Could Sweden's Housing Crisis Spread Across Europe?

Sweden's housing bubble is bursting. That's bad news for Swedes but it could lead to a cascade of housing collapses across Europe. So in this video we'll unpack what all of this means for Europe and how the continent will react to a change in housing.

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[theinternetofrandomthings]

An important thing to remember is the growth prior to the drop. Sweden had 16.8% increase im house prices in 2021, and 6.9% in 2020 for example.

[colmcorbec]

Hopefully. It's about time we get back to a market without a giant bubble.

[spektrumB]

Like any bubble, the sooner it burst, the lesser the pain. Governments should not let the bubble built up in the first place. Popping the bubble is always painful.

[Dedog]

I wouldn't call a crash in housing prices a "crisis". Isn't it more like a housing opportunity?

[HafezBd]

Another reason it's less likely to happen that way is that there is already too much demand waiting to absorb that regardless of how everyone is panicking and calling the crash. Nobody was making this prediction in 2008, at least not the general public, as I indicated below. In the other comment, it was mentioned that the ownership rate peaked in 2004. As of today, we are at the median level, having previously peaked in the second quarter of 2020. It decreased by 3% over 4 years, from 2008 to 2012, going from 68 to 65 in the second quarter of 2020.

[FennaVa]

I feared a housing crash in America due to people buying homes above asking prices with little equity. If prices drop, affordability and potential foreclosures may arise, worsened by future layoffs and rising living costs. I want to invest more than $300k in houses but I'm not sure on how to mitigate risk.

[AntonioBianh]

I’m closing in on my retirement and I’d like to move to Sweden, but the prices on homes are stupidly ridiculous and Mortgage prices has been skyrocketing on a roll(currently over 7%) do I just invest my spare cash into stock and wait for a housing crash or should I go ahead to buy a home anyways.

[albevanhanoy]

Imagine housing finally becoming slightly more affordable and people calling it a "Crisis" . Smh

[Dragoneye]

I sure hope that it keeps going. Young people need their housing

[Emanuel-jrii]

The big concern I have is that large asset management companies like BlackRock and Vanguard take advantage of this housing price crash. They don't care about the interest rate since they don't need to borrow money to buy properties. With lower prices, they get more property per dollar spent. Growing their portfolio of houses even faster and therefore increasing the power they have. It's a wealth cycle which only goes faster and faster in the direction of those asset management companies. It's a classic example of the rich get richer and the poor get poorer.

[momciloradovanovic]

Wow, we are now calling more affordable housing a crisis. We don't live in an economy, we live in a country. We are not investors, we are people that might or might not invest. Let's keep the priorities straight.

[Hill_Walker]

Housing prices falling should never be called a crisis

[eliuz]

Oh nooo, something that's essential for people to live is getting cheaper 😪 What a crisis

[linuxares]

just 17% down is still enormously bad. It need to go down more. Houses and appartments are stupid expensive.

[shakthianjanananayakkara]

I don't think a housing crash is by default, a housing crisis. More often that not, its the other way around.

[Djungelurban]

Yes! Burst! Do it! I have no sympathy for people spending beyond their means and real estate speculators seeing their "investment" crumble before them. Home's are built to be lived in, not to just exist so that you can boost your nest egg. So despite the greater socioeconomical this undoubtedly have, I'm all for it. I live in Sweden and I sometimes visit real estate sites, not cause I'm looking to buy right now or anything, I just find satisfaction in seeing all the prices falling. And who knows, if things continue like this, maybe I will be able to buy a home some day. That would be a mad turn of events.

[Bald_Zeus]

I'm a student living in a student apartment in Stockholm. I get around 11000SEK in student loans every month and I need to pay 7000 of that to rent alone. If I fail more than two courses during the whole semester I lose my loans (I also get no loans during the summer and only half loan in may), meaning I need to work on top of my full-time studies and even then I'm always like a month away from having to give up the apartment.

I live in a constant state of anxiety because of this

[Dannyholt]

Because so many people overpaid for homes even while loan rates were low, I believe there will be a housing catastrophe because these people are in debt. If housing costs continue to drop and, for whatever reason, they can no longer afford the property and it goes into foreclosure, they have no equity since, even if they try to sell, they will not make any money. I believe that man individuals will experience this, especially given the impending mass layoffs and rapidly rising living expenses.

[MGL]

Oh, so good that banks are safe. I was worried about them. People's mortgages go under water, but by all means let's focus on preventing banks loose 1%.

[jorislal]

I bought an apartment 4 years ago in Vilnius. Purchase price was 136k eur brand new. At that point it was a grey box so we had to put a lot of work on walls, floor, ceiling and furniture. All in all it cost like 170k or so. Bank loan was 85% of original price so ~115k eur and by now the value of our apartment skyrocketed to ~300k eur. Since the euribor rate hit ~2.5% the mortgage payment also went from ~470eur to ~615eur per month. We don't mind paying a bit more, I just feel bad for my friends that were a bit late and despite earning more than we did when we bought our apartment they can't buy anything as good right now and they will certainly eventually have to take a bigger loan etc. In current context we were kinda lucky and we wish our friends were as well.