Yeah... I have had a hard time with my friends on this topic. In general, in my country (Sweden), the system is kicking the can down the road. You have 65% of the people in the country owning, with an common housing mortgage at 85% of the purchasing price. Avgift(you pay a rent equivalent to your apt association)+interest+amortization requirement make up around 30-50% of the average income.
Average loan amortization rate is 25 years, with a 35 year roof.
Govt has approved 90% loans at the end of this year, meaning you will only need 10% as down-payment when you take a multi-million SEK loan, which will achieve nothing except for continued price growth and larger loans, and push up the average amortization rate closer to the roof.
The banks dont care, they would be fine with a 0% down payment rate, as they are immediately selling these loans and the associated risk to the pension funds.
Every year, you have new political patches to make the pyramid scheme palpable. Last year they had that homeowners can get services on their homes subsidized by 66% by the govt. The year before that they had that you can write off your taxes using loans as "economic losses". The year before that they capped the property tax, etc.
You can as a housing owner (in an association) build your own in-house electricity distribution, essentially letting the renters pay for all the government electricity infrastructure. You can negotiate lower costs for internet, water, power in bulk with distributors.
As you can guess, since the homeowners with loans are the majority, its political suicide by any political party to not kick the can down the road. So no action is taken.
When I talk about this with my friends, they have not thought about this. Honestly, I would be more happy if they said "Oh yeah, I know, I believe that there is such a majority of people with loans that the government will have to bail us out, or increase inflation to eat the loans", but there isn't.
Even if we ignored the inevitable crash, and looked at the situation as-is in the current moment with all of the patches to improve house-owning, its STILL cheaper to rent. Its mind-boggling.
Average loan amortization rate is 25 years, with a 35 year roof.
Govt has approved 90% loans at the end of this year, meaning you will only need 10% as down-payment when you take a multi-million SEK loan, which will achieve nothing except for continued price growth and larger loans, and push up the average amortization rate closer to the roof.
The banks dont care, they would be fine with a 0% down payment rate, as they are immediately selling these loans and the associated risk to the pension funds.
Every year, you have new political patches to make the pyramid scheme palpable. Last year they had that homeowners can get services on their homes subsidized by 66% by the govt. The year before that they had that you can write off your taxes using loans as "economic losses". The year before that they capped the property tax, etc. You can as a housing owner (in an association) build your own in-house electricity distribution, essentially letting the renters pay for all the government electricity infrastructure. You can negotiate lower costs for internet, water, power in bulk with distributors.
As you can guess, since the homeowners with loans are the majority, its political suicide by any political party to not kick the can down the road. So no action is taken.
When I talk about this with my friends, they have not thought about this. Honestly, I would be more happy if they said "Oh yeah, I know, I believe that there is such a majority of people with loans that the government will have to bail us out, or increase inflation to eat the loans", but there isn't.
Even if we ignored the inevitable crash, and looked at the situation as-is in the current moment with all of the patches to improve house-owning, its STILL cheaper to rent. Its mind-boggling.