What Broke Sweden? Real Estate Bust Exposes Big Divide
At the heart of Sweden’s woes is a dysfunctional housing market, which has not only cemented social divides, but exacerbated them. The country’s property boom — which saw prices increase by almost 250% in the past 20 years — was fueled by razor-thin borrowing costs and a shortage of rental properties. This lack of housing squeezed poorer families into overcrowded accommodation. And pushed others into buying — the total value of mortgages increased 459% in the two decades up to 2022. Before the latest crisis, household debt, including mortgages and consumer debt, had soared to more than 200% of disposable income, according to the OECD’s latest data from 2021. That is double the level in Germany. Sweden's Income Inequality Has Been Creeping Up Until now these problems had been papered over by cheap money and an ever-growing economy. With both coming to an end the vulnerabilities in the system are being exposed. An over indebted middle class now faces the prospect of not being able to afford to pay their mortgages, much less everyday luxuries.
Posted Mar 28, 2023, 1:14 PM UTC