Sweden's Housing Market Crashing as High Debt Levels Threaten New Recession
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Housing prices in Sweden have risen rapidly since 2007, driven by low interest rates and population growth, but are now falling sharply due to rising rates and high inflation.
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Household debt levels are very high in Sweden, with mortgages making up 83% of debt. This makes the economy vulnerable as rates rise.
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The construction sector is declining and investment dropping as the housing market weakens. Only 25,000 new housing starts are expected this year, down from 75,000 previously.
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Sweden had a major housing crash in the 1990s after mortgage limits were removed, leading to bank bailouts. There are concerns of a recession happening again.
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Ilija Batljan built up a large real estate company, SBB, which has now had its credit downgraded to junk status, forcing him to step down as CEO.