This view is a big part of the problem.

What’s happening in Sweden is unprecedented for Swedes, and it’s not going to end well.

Everyone is a ‘long-term’ investor as long as prices are going up. And since they are, why not invest in a new kitchen for 250.000sek? How about a new bathroom, or granite counter tops, or a spa in the cellar? Plus, why should I max out my IPS savings now when we have ‘so much money in the house?’ After all, IPS är en förlust affär, so they say. Of course, we would never use the money for a trip to Thailand, but maybe just a little… I can tell you, it’s hard to sell and investment you made in a trip to Thailand three years ago.

Kitchens are not an investment. Nor are bathrooms or spas, or trips to Thiland, or the little extra you ‘took out of the house for investment’ that seems to have sort of disappeared and you’re not sure why.

Sooner or later, housing will return to long-term debt/income ratios. This is an inevitability. Prices are going to drop. Interest rates are going to rise, and since all interest rates in Sweden are flexible (3 month, 1-10 years), thousands of families with 3M sek loans will have monthly payments they can’t afford.

Samtidigt tror jag du överdriver effekterna av dessa Volvo-jobb och hur de kommer att påverka lånemarknaden. Vi vet att våra svenska banker har betydligt säkrare upplåning än de Amerikanska motsvarigheterna.