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Why northern Europe is so indebted (2021)

100 点作者 disadvantage大约 2 年前

22 条评论

sohtym大约 2 年前
Seems a bit general. Sweden is very much in debt because of the housing market. 15 years ago there were little regulation. You could get a 100 year mortgage with a variable rate and no money down. At the same time the government sold large amounts of public housing at below public market rate. Interest rates went from ~4% to ~1.5%. With no wealth or property taxes, but with tax deductions for renovations and interest rate payments. Most apartment buildings are co-ops, where the co-op have loans as well. Gradually there have been more regulation, but most still have variable rate mortgages which they are personally liable for and with no real a way to declare bankruptcy. Now interest rates will probably reach 4% again so hang on I guess.
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cronin101大约 2 年前
This is such a non-story, mainly driven by the fact that home ownership in Nordic countries is ubiquitous (80% of Norwegians OWN their primary dwelling) combined with the high medium incomes resulting in those houses being quite expensive. I’d really recommend not trying to draw any deeper conclusions from this data.<p>Edit: by “own” I mean “have a non-paid off mortgage”, the tax on net wealth here actually disincentives paying off a mortgage early vs “leveling up” your debt&#x2F;house.
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bigpeopleareold大约 2 年前
&gt; If we consider consumer credit, the welfare-debt theory makes sense again. While consumer credit is more the exception than the norm in Europe, and almost absent in the Nordic countries, it is common in Anglo-liberal countries (UK, US and Canada) where it is used by families as a substitute for poor welfare provision.<p>Hmm - in Norway here, it&#x27;s common to see advertising for credit (<i>lots</i> for fixed unsecured loans.) Basically all the grocery store chains except one have their own loyalty credit card. I never watched an episode, but there is a show called Luksusfelle which tries to help people reform their out-of-control finances - I think more than once, credit cards were mentioned. I mean, it&#x27;s not like the US and the regulatory environment is more consumer-friendly than the US, but I cannot imagine it as non-existent as it is said here.<p>I am not being coldly statistical here, but it really doesn&#x27;t match up with a lot of the anecdotal experiences I have.
smcl大约 2 年前
Not <i>Northern</i> Europe, but Czech Resident here. There has been an <i>explosion</i> in house prices here, a truly wild one. I bought my place for 3.6m CZK about 7 years back and according to a recent valuation practices is &quot;worth&quot; nearly double this now. It is fucking wild, and tbh I kind of hate it.
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jahnu大约 2 年前
More on Danish mortgages from last year<p><a href="https:&#x2F;&#x2F;www.washingtonpost.com&#x2F;business&#x2F;denmarks-mortgage-market-is-luring-global-investorsheres-why&#x2F;2022&#x2F;08&#x2F;12&#x2F;e5cef430-19ff-11ed-b998-b2ab68f58468_story.html" rel="nofollow">https:&#x2F;&#x2F;www.washingtonpost.com&#x2F;business&#x2F;denmarks-mortgage-ma...</a>
DavidVoid大约 2 年前
As always with debt, how bad it is very much depends on the interest rate of the loans. I bought an apartment here in Sweden a couple of years ago with the minimal required down payment (<i>kontantinsats</i>) of 15%, but 20% of my debt is still my student loan that currently has an interest rate of 0.59% (it was 0% a few years ago).<p>I will say that the housing loans here have one potential issue though: it&#x27;s <i>very</i> common to have a variable (or only 2 year fixed) interest rate on your loan, so Swedish borrowers will notice increased interest rates much sooner than borrowers in countries where 5+ year fixed rates are common.<p>Around 80% of new loans for house purchases here have their initial rate fixed for only 1 year or shorter [1].<p>[1] <a href="https:&#x2F;&#x2F;sdw.ecb.europa.eu&#x2F;quickview.do;jsessionid=3DC3C894DAB6BA2FFAF04380E0AE09BA?SERIES_KEY=304.RAI.M.SE.SVLHPHH.U1.MIR.Z" rel="nofollow">https:&#x2F;&#x2F;sdw.ecb.europa.eu&#x2F;quickview.do;jsessionid=3DC3C894DA...</a>
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viking1066大约 2 年前
It would make sense to correct for home ownership rate. With higher rates of home ownership, a higher debt is justified.<p>For example USA and Germany seems to have about the same level of household debt, but USA has 65% home ownership rate, while Germany has only 51%.<p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;List_of_countries_by_home_ownership_rate" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;List_of_countries_by_home_owne...</a><p>The other interesting thing is that South Europe in general has a longer history of financing public works like churches, than Northern Europe, but in terms of household debt, that relationship seems inverted.
VWWHFSfQ大约 2 年前
It&#x27;s my understanding that the northern European countries have very low immigration rates which means that their existing (mostly native) population is entirely responsible for their economic growth. That population grows old and fewer and fewer young people are available to contribute to the state-funded &quot;welfare&quot; to support their parents retired lifestyles. So the debt accrues and the country eventually becomes a &quot;welfare state&quot; with young people paying 50-60% of their income to taxes.
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cmrdporcupine大约 2 年前
The explanation here still wasn&#x27;t clear to me after several readings. They&#x27;re showing that a bias towards social spending on the elderly was co-related with higher overall debt. But I&#x27;m unclear on their explanation.<p>Given they&#x27;re talking about mortgage debt in particular, would like to see plotted against housing prices.<p>Especially curious if certain kinds social spending helps shore up baseline housing prices by increasing aggregate spending, by putting more cash in the system but also by reducing foreclosures&#x2F;bankruptcies.<p>And most importantly, if seniors can stay in their homes longer -- because of adequate pension systems -- that means less houses dumped on the market. &quot;Selling the family home so I can afford to retire&quot; (aka downsizing) is a pretty common maneuver in the Anglo-American economies [where pensions are dubious]. When all the baby boomers finally liquidate their real estate assets, it should be interesting to see what happens to housing prices. in North America
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thedudeabides5大约 2 年前
Maybe it has something to do with the negative interest rates?
mo_42大约 2 年前
I was getting some ideas from the text. Scandinavian countries have probably the world&#x27;s best institutions. I&#x27;m talking here specifically about courts, laws, police. Also lack of corruption, excellent education, and a good labor market. In a world like this, debt becomes really just a number on paper. They can take huge mortgages and pass them on to their children (alongside with the property of course).
dusted大约 2 年前
One of the larger crimes here in Denmark, is that debt for example for homes are tax deductible, so basically, it allows banks to make more profit, by letting the state cover some of the expense of taking out a loan.<p>There&#x27;s an old song &quot;if you have money, you can buy, if you don&#x27;t you can leave&quot;, people need to sing this to their kids a bit more often.<p>We&#x27;re an incredibly wealthy society, and yet, most people chose to live above their means.. Loaning money for cars and homes instead of simply buying cheaper ones.<p>The last house I bought, I paid in cash, because it cost less than the down payment for many of the homes other people in my income bracket typically buy.<p>The last car I bought cost less than the service-check for the tesla that some of the other people in my income bracket..<p>Living below ones means in Denmark is trivial, and yet, people feel they&#x27;re too good to live within their means, it&#x27;s a cultural problem.
layer8大约 2 年前
May load faster: <a href="https:&#x2F;&#x2F;archive.ph&#x2F;J72Cl" rel="nofollow">https:&#x2F;&#x2F;archive.ph&#x2F;J72Cl</a>
layer8大约 2 年前
(2021), according to archive.org and the comment on the article page.
adaml_623大约 2 年前
I really don&#x27;t like the graphs &#x2F; diagrams in that article. I feel they need units on the graphs.<p>And figure 2. is based on data from 2007<p>And figure 3. is comparing very different things on the same diagram.<p>If this were an undergraduate project I would not give it a pass.
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matsemann大约 2 年前
When you live in a stable society and have gotten a free education and a nice job, it makes sense to get a loan to buy a place to live and start paying a mortgage instead of debt.<p>Contrast with a society where the average education might be lower, less people having a stable job in a slow labor market, and if you lose your job there is no safety net. Hard to get a loan, so end up renting for longer, and in turn have a lower average debt.<p>Debt can be a proxy for a well working society, as you have the means to invest in your future, not just putting out short term fires.
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nonethewiser大约 2 年前
Many of the reactions here seem rather defensive. Observing that mortgages are the main driver isn’t some takedown of the article. It makes the exact same observation.
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jakub_g大约 2 年前
What is the unit of the X axis on those graphs? Is it % relative to something? (% of GDP? % of something else?) Or absolute values of some sort?
mikaeluman大约 2 年前
Change the title name to be more approptiate. This is about private debt, not total debt.<p>&quot;Why Northern Europe is so indebted&quot; sounds like clickbait...
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mikl大约 2 年前
Maybe over a decade of near-zero interest rates could have something to do with it?<p>The cheaper it is to borrow money, the more people borrow, unsurprisingly.<p>This is what’s been driving the massive rises in property prices the last many years. It’s straight out of “Economic Bubble Creation 101”.
ramesh31大约 2 年前
The answer is because it can be. The Euro is a global reserve currency.
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kevmo大约 2 年前
&quot;Debt, n. An ingenious substitute for the chain and whip of the slavedriver.&quot;<p>- Ambrose Bierce, Devil&#x27;s Dictionary
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