During a recent seminar on housing policy, Vice Deputy Governor of the Riksbank, Aino Bunge, expressed concerns about the investigation into amortization requirements and mortgage caps that was submitted to Minister for Financial Markets, Niklas Wykman, last November.
Bunge emphasized the importance of evaluating regulations, but warned that the proposed changes could pose greater financial risks for both households and banks. She stated, “Making borrowing easier does not solve the long-term challenges.”
The suggested changes could also drive up housing prices, according to Bunge, who believes this may worsen the situation for groups already struggling to purchase a home.
One of the committee’s proposals was to raise the mortgage cap from 85% to 90%, reducing the required down payment. Another proposal was a new debt-to-income ratio cap, limiting households’ loans relative to their gross income. The proposal suggested households could borrow up to 550% of their gross income, with some flexibility allowing lenders to increase the ratio by 10% for new loans.
These recommendations have sparked a debate among policymakers, economists, and industry experts regarding the potential impact on the housing market and financial stability. Critics argue that easing borrowing restrictions could fuel speculation and lead to a housing bubble, while proponents believe it could stimulate economic growth and homeownership.
The future of Sweden’s housing market hangs in the balance as stakeholders await a decision on whether to implement these controversial proposals. The outcome will not only shape the country’s real estate landscape but also have far-reaching consequences for its economy and society as a whole.