[HN Gopher] What broke Sweden? Real estate bust exposes big divide ___________________________________________________________________ What broke Sweden? Real estate bust exposes big divide Author : SirLJ Score : 56 points Date : 2023-04-01 20:22 UTC (2 hours ago) (HTM) web link (www.bloomberg.com) (TXT) w3m dump (www.bloomberg.com) | sgt wrote: | Sweden is broken? That's news to me. Why isn't this in the media? | tpmx wrote: | Young people are upset they can't live centrally in the capital | for cheap. Same story as everywhere else. Now go forth with the | ritual flogging, er, downvoting. | | (I live and work in the countryside of Sweden. I recommend it.) | ChuckNorris89 wrote: | Sure, but try dating and building social circles while living | in rural areas as a single 20-30 something year old. | | Of course young people want to live in dense walkable areas | where it's easy to find other like minded people. | | Isn't Swedish population also statistically one of the | biggest sufferers of loneliness in the world and also one of | the largest consumers of antidepressants? Or was that | Finland? I'm not sure. | tpmx wrote: | There are plenty of more affordable, densely walkable city | areas in Sweden. Every single city in the country is built | this way, from the smallest to the largest. That's not the | factor. The factor is that everyone wants to have a cheap | apartment in the same square mile that's the cool place. | | > Isn't Swedish population also statistically one of the | biggest sufferers of loneliness in the world and also one | of the largest consumers of antidepressants? | | No idea, but it sounds a bit like reverberations from | Dwight D. Eisenhower's 1960 speech where he said that "sin, | nudity, drunkenness and suicide" in Sweden were due to | welfare policy excess, which then quite incorrectly caused | americans to correlate Sweden with suicide and depression | for many decades. | | At the moment there are more suicides per capita in the US | than in Sweden but we're relatively similar in this | statistic. | | https://ourworldindata.org/grapher/share-deaths- | suicide?coun... | ChuckNorris89 wrote: | _> Why isn't this in the media?_ | | Not Swedish but I assume the ones who run the real estate | interest groups are also hand in hand with those who own | mainstream media so they have no interest to dig up dirt on | them and will turn a blind eye. | | I assume Germans initially also asked themselves why isn't the | Wirecard fraud in the local media and only reports on it come | from the US. | | Influential people in a country tend to scratch each other's | backs. | maximilianroos wrote: | > Why isn't this in the media? | | Like on bloomberg.com? | rejectfinite wrote: | Housing is yea. | belorn wrote: | It should not be a major surprise that the gap between the haves | and the have-nots will widen if you have a large compareable | influx of have-nots, or to speak more precisely, an influx of new | citizens with low social-economic status compared to those who | already were ctiziens. In a very dispassionate perspective, it is | just plain math. | | It is going to take time to return back to the same levels as | before. | jcz_nz wrote: | Swedish immigration has been decreasing for the last 14 years. | https://www.macrotrends.net/countries/SWE/sweden/net- | migrati.... | | Oddly enough, profitability of Swedish banks has been | increasing for the last 14 years: | https://www.macrotrends.net/countries/SWE/sweden/net- | migrati.... | | Maybe you can come up with an argument actually grounded in | reality, rather than the same old BS "oh it's the poor". | FpUser wrote: | >"It is going to take time to return back to the same levels as | before." | | Growing divide is universal and pending some tectonic changes | in the way our society operates there is no coming back. | ChuckNorris89 wrote: | _> if you have a large compareable influx of have-nots_ | | I'm not in Sweden but why are we always pointing the finger at | the poor immigrants? Do you think there are no native Swedes | being fucked by this real estate market? | | Granted, having an open borders migration policy is not a good | idea when you have a housing shortage. If you're struggling to | provide for the locals, then the newcomers will have it even | worse and won't like it, leading to more inequality, social | divide, unrest and increased crime. | | But blaming immigrants is always a cheap shot politicians take | to blame the demographic without voting rights for the problems | they themselves are responsible for. _" It's not us who screwed | you over with inflation and housing while taking your taxes, | it's the immigrants who took your job and house"._ | suddenclarity wrote: | > I'm not in Sweden but why are we always pointing the finger | at the poor immigrants? | | It's not about pointing fingers but rather that people with | one foreign born parent have increased from roughly 16% to | over 40% in the working age population during the last 30 | years. When you become half of the population, you'll have a | major impact on all statistics. People outside of Sweden most | likely aren't aware and might draw rushed conclusion if they | don't know why different stats are currently changing rapidly | in all areas. | bilbo0s wrote: | So true. | | Immigration is an entirely separate issue. Conflating it with | the fact that hard working Swedes can't secure good housing | only serves to make those Swedes, who are already pissed off, | _more_ pissed off. It's bringing the masses closer to taking | to the streets with calls for Madame La Guillotine. | | Housing needs to be fixed asap in Sweden. (And in most of the | western world if we're being honest.) | xienze wrote: | > Immigration is an entirely separate issue. Conflating it | with the fact that hard working Swedes can't secure good | housing | | How do you figure the two are unrelated? The native poor | are competing with an influx of poor immigrants for the | same pool of housing. I find it hard to understand how | those same poor natives would be worse off in terms of | housing prospects if the immigrants never showed up, all | things being equal. Immigration is never 100% of the reason | behind housing issues, but it's more significant than most | people want to admit. | 908B64B197 wrote: | > Immigration is never 100% of the reason behind housing | issues, but it's more significant than most people want | to admit. | | Considering how the Swedish government tried to hide the | crime wave that correlated with it's open doors | immigration policy [0] [1] [2], I wouldn't be surprised | if they were fully aware of the impact but were trying to | withhold that information as well. | | [0] https://twitter.com/KirkegaardEmil/status/11768490175 | 6682649... | | [1] https://emilkirkegaard.dk/en/2021/11/sweden-finally- | publishe... | | [2] https://www.bbc.com/news/world-europe-45269764 | rhaway84773 wrote: | The Sweden story sounds so much like the SF story. | | Area doesn't building housing, leading to a massive increase in | house prices and a destruction of class mobility as the rich get | richer (as their houses get more valuable) and the poor get | poorer (as they pay more to rent the same living space). | | The growing wealth inequality leads to all sorts of other | dysfunction including increased crime, worsening services, etc. | as the govt cannot raise enough taxes. | | And finally, instead of solving the fundamental expensive housing | problem, opportunists will blame the other. More often than not | the other are the victims of the problems. Immigrants in Sweden's | case, and since one can't blame immigrants for obvious reasons in | SF, homeless people in SF. | bequanna wrote: | > The growing wealth inequality leads to all sorts of other | dysfunction including increased crime, worsening services, etc. | as the govt cannot raise enough taxes. | | Hold up. I don't think the people of San Francisco grew weary | of increasing rents and decided to turn to a life of crime. | | Most of the "trouble makers" in the Bay Area are recent | arrivals to the area and come because of poor policing and the | government is generally more tolerant of them. | [deleted] | patall wrote: | Not sure about the main story about the article. However, | construction on that Ursvik/Rinkby construction site has been | very slow since long before the current crisis. I was biking | through the neighboring bridge of the one mentioned here (that is | about 100m down the road, so much about that new bridge alone | enabling crime) for about 8 month and while my way through | changed a few times, progress was very slow. (Not that any of the | many many construction projects in Stockholm has been fast). What | the article misses is that the Swedish Krona has lost more than | 10% compared to the Euro over the last year and that, while | theoretically making exports more valuable, increase inflation | for all import products. Which for me as an immigrant is the main | economic flaw in this country: it should have adopted the Euro | like Finnland or at least locked the exchange rate like Denmark. | But no, false national pride has now made the entire economic | down-turn even harder. | | (One should also note that mortage rate here in Sweden are still | surprisingly low. My 3 month fixed rate right now is 3.65% of | which I get back 30% via taxes. Hence I am effectivly borrowing | at 2.5%) | nickez wrote: | The SEK used to be locked. That lead to another kind of crisis | in the nineties. You are right that we should've adopted the | euro though. | ChuckNorris89 wrote: | Real estate can either be a lucrative investment or it can be | affordable. | | Why are people continuously acting shocked when they realize it | can't be both? | | And why are elected politicians everywhere continuously shrugging | their shoulders as if the housing market is somethin completely | outside of their control. | pessimizer wrote: | > And why are elected politicians everywhere continuously | shrugging their shoulders as if the housing market is somethin | completely outside of their control. | | This isn't what's happening. Any politician that promised to | lower house prices would be demolished by middle class people | who | | a) think that additional wealth from rising house prices is | their just reward for being wealthy enough to own a house, and | | b) will be in deep shit on their mortgage if house prices go | down, because mortgages are just highly leveraged investments. | | edit: whenever house prices seem like they might go down, | governments inject huge amounts of tax money into the housing | market. The people that tell us in the US that cancelling | student debt is a subsidy to the rich will never fail to send | direct subsidy to homeowners and prospective homeowners. In | that way, government interventions into the housing market | _only_ happen as a bubble is popping, and their intention is to | maintain bubble pricing. | havblue wrote: | It's funny that it was sold as "affordability". Is it really | more affordable to have a mortgage that lasts twice as long? | Can we really consider interest only to be home ownership? You | don't own that home, the banks do, Maverick! | brabel wrote: | If you invest your money on anything that gives , say, 5% | yearly returns on your money, instead of paying off your | mortgage, which used to be at less than 2% (but is not | getting beyone 4%), you're just better off. | | Say you start with a 10,000 mortgage, and your payment per | year is 500, not including interest. By the end of the year, | you'll have a 9,500 mortgage left. If you just invested the | 500 and only paid interest on the mortgage (which was common | in Sweden until a few years ago), you'll still have a 10,000 | mortgage, but you have 525 in your pocket. You could now go | and pay off some mortgage, resulting in you having now only | 9,475 left (i.e. you're better off)... but why would you do | that? Just keep investing that money! | xapata wrote: | Suppose a large, publicly listed real estate investment trust | (REIT) owned a diversified portfolio of housing across the | country and operated it all as rental housing. Tenants could | buy shares in the REIT and thereby invest not only in their own | house, but all the others as well. Less risk and more flexible | than home ownership. | | The downside for tenants is not being able to renovate. The | upside is not being responsible for maintenance. | bugglebeetle wrote: | Imagine the state did this instead using taxes and eminent | domain. Congrats, you've invented Vienna, one of the most | beautiful cities in the entire world. | [deleted] | ambientenv wrote: | We somehow have this belief that the "market" is some immutable | law of nature like say, gravity. The "market" is based on | behaviour, albeit behaviour that is heavily manipulated and | controlled (somewhat invisibly - complicity or otherwise - to, | seemingly, most people). We acquiesce and, when life is good | for us, ignore the fact that we have to the power to change our | behaviour and our beliefs and values and, thus, the market. But | that will take hard work over time and much sacrifice. And so | it goes ... | nivenkos wrote: | The main problem is the terrible rent control system - with a | lucky few getting rent-controlled first-hand contracts, and | everyone else facing a cut-throat almost completely unregulated | market of sub-letting. | | Rent control never works. | brabel wrote: | Very true. I wanted to buy an investment property in Sweden, | and rent it out while waiting for prices to go back up in a few | years... but learned that this is not a thing here! If you want | to rent out, you need permission of your building association, | which normally won't give it... or you can buy a "detached | house" (no association) which is usually much more expensive, | but then you must deal with renters and find them yourself, as | the real estate agents , apparently, are not allowed to handle | that. WTF?! Makes me wonder how the heck prices got so bloody | high in the big cities when investing in property is virtually | impossible. | styren wrote: | I'm not sure, I live in a rent controller apartment and it | certainly is great for the many people in my apartment who work | in the city but could never pay the rents. | | Thankfully me and my girlfriend can afford and we're therefore | planning to buy and lose our contract, but to be honest it | probably going to go to someone who needs it. Because owning | your own place, being able to modify it to your liking and | having people that live there take care for it just makes it | much better to own instead (in my opinion). | gruez wrote: | > I'm not sure, I live in a rent controller apartment and it | certainly is great for the many people in my apartment who | work in the city but could never pay the rents. | | That's kind of like saying "What's so bad about zoning | restrictions? I own a house and it's not affecting me at | all!". Of course it's great for you and other people who have | a rent controlled unit. The OP explicitly acknowledges this. | The issue is for everyone else who doesn't have a rent | controlled unit. | ChuckNorris89 wrote: | Of course it doesn't. The only way to bring down prices is to | build more supply than the demand, but for some reason this | elephant in the room is always ignored because always a million | reasons come up against it, mostly being just NIMBYsm in | disguise. | | Keeping a limited supply artificially price capped through | regulations, sounds good at first, and will most likely be | popular with clueless voters, but it will lead to shortages | down the road and only the lucky few with money or connections | will be able to afford. | | We had that in communism, except ironically, not with housing | but with food and goods. Now the west has the opposite problem, | everyone has plenty of food and iPhones, but no housing. Have | Swedes never learned about this and the functioning of | supply/demand in their excellent school system? | varispeed wrote: | > but for some reason that route is never explored. | | The reason you are looking for is called corruption. | | There is a very strong lobby of landlords and the rich | treating residential housing as a store of value. It offers | better returns than keeping money in the bank and it is | safer, especially if you are from a country where your assets | could be in danger - it's much harder for foreign states to | take control of the property, sell it and recover the monies. | | Here in the UK we have the same problem. Good percentage of | the ruling party (and opposition) are landlords, there is a | ton of foreign money coming in buying up properties left and | right and they don't even care if they are rented out, | because empty property gives good enough return. We even have | banks start to move in this business as well. | | It has gone completely mad. | | But since big money is all over it and our security services | are not interested in looking into it, nothing is going to | change it will only get worse. | mihaaly wrote: | I wonder why the rich and those in charge of regulating and | steering policy think it will not end bad for them too when | masses could not afford the housing on the highly inflated | prices fuelled by passive money drawn out of economy into | "investment" (more like sleeping) properties, hence | crashing housing prices all around making them loose a lot. | And that all that living cost hikes will not exacerbate | things further accelerating this crash as people need to | spend sooo much on housing less remains there for the | functional parts of the economy? They hope they die before | this comes or what?! They will not be in charge and could | sip gin and tonic silently in a big warm garden somewhere | before this happens? But what about their children and | their other young family members? What will they do with | properties woth nothing in a dissolving society where it | will not be good or perhaps not even safe living due to | unrest of the poor? A frequently repeting worry in articles | and analysis here and there is the gigantic wealth | accumulated for few stucked away suffocating the rest of | the society and raising desperation yet what I can see | people seem to mumble "it's ok so far, it's ok so far" to | themselves while falling alongside a high rise building. Do | they hope for a soft landing with this behaviour? They hope | that printing cash in increased speed pumped into even more | passive wealth here and there through the sliding middle | and lower classes will last forever? | varispeed wrote: | The solution for this will be CBDC - electronic | programmable money and social credit score. The class of | the ultra rich that has developed and controls the | governments will use the poor as means of production - | since they already own most of the economy, there is no | longer any need for markets in the traditional sense, | that we know. | | At one point if you have 100 billion, it doesn't matter | if you have 101 or 200. The capitalism has reached its | end and the rich are preparing us for the so called | fourth industrial revolution. | joshuaissac wrote: | > The reason you are looking for is called corruption. | | It could just be democracy. Homeowners are an important | vote bank and they generally want house prices to rise. A | government that substantially increased housing supply | would cause house prices to drop, which would make | homeowners unhappy. | im_down_w_otp wrote: | I try to remind people in the US that there's exactly one | constituency that wants affordable houses. | | People who don't have houses yet. | | Everybody else wants housing to continue to be a growth | investment, and thus increasingly unaffordable. | Developers want to make & sell more expensive things. | Lenders want to make more & bigger loans. Existing owners | want the value of their most valuable asset to go "up & | to the right". | | That's a very big hurdle to overcome politically. Even | worse in the US where real estate investments are a | central pillar of the broader economy, and if the "growth | investment" patina of it starts to fade, then a cascading | catastrophe will likely follow. The situation might be | untenable as prices keep going up, but there are so many | incentives working against any kind of intervention, that | I never expect one to occur. | VirusNewbie wrote: | If someone owns a condo and wants to buy a mansion, does | it make sense for them to hope all real estate | appreciates in price vs depreciates? | varispeed wrote: | There is no democracy if most parties have the same | policies regarding this and the weaker parties can be | easily influenced to drop anything against the status | quo. | jjoonathan wrote: | Misguided handout-seeking poor are not stopping construction. | Rent control doesn't solve the problem, but it doesn't cause | the problem either. | | > NIMBYsm in disguise | | Yes, this is the real problem: the same capitalist incentive | structure that pulls forward the future returns of a new | housing investment also pulls forward the consequences of | future supply normalization onto current owners. Capitalism | also guarantees that these owners are the ones with power. It | gives them the means and the motive to torpedo new | development. So they do. | | Capitalism causes NIMBYism. Which is the real problem. | dogma1138 wrote: | Forced rent control definitely causes a problem as it | suppresses supply. | gruez wrote: | >Rent control doesn't solve the problem, but it doesn't | cause the problem either. | | It causes the problem by diminishing the returns for new | construction. That in turn disincentivizes people willing | to fight through the bureaucracy to get new construction | approved. | | >Capitalism also guarantees that these owners are the ones | with power. It gives them the means and the motive to | torpedo new development. So they do. | | I'd be sympathetic to this if all the home owning NIMBYs | are funding super-PACs or lobbyists to "torpedo new | development", but they're not. They're just people showing | up to local government meetings in their spare time. | jjoonathan wrote: | > super-PACs or lobbyists | | Presidents don't make zoning decisions. Next time you | attend a zoning meeting, take a good look at the people | who are most passionately creating friction (or their | power base, if they are outsiders). You will find a bunch | of property owners looking after their property values. | gruez wrote: | >Next time you attend a zoning meeting, take a good look | at the people who are most passionately creating friction | (or their power base, if they are outsiders). You will | find a bunch of property owners looking after their | property values. | | That's... exactly what I was arguing for? In the | subsequent sentence: | | >They're just people showing up to local government | meetings in their spare time. | jjoonathan wrote: | My point is that these people are directly motivated by | capitalist incentives. | | > spare time | | No, not spare. Stopping new construction makes them | money, sometimes a lot of money. They are expecting a | large, dollar-denominated (or Krona-denominated) return | on their investment of time, paid for by future renters | and buyers who will not have the additional options they | are so diligently trying to torpedo. | boringuser2 wrote: | Nobody likes to talk about the effect of moving large populations | around globally without the housing infrastructure to support | them. | twodave wrote: | Interesting undercurrent that the article presents: a Sweden with | high immigration has a lot of the same problems as the United | States. Maybe living in a utopia is only possible if you first | ship away those pesky poor folks. /s | brailsafe wrote: | * * * | oblio wrote: | Paywall :-| | ftyers wrote: | https://archive.ph/rLm7B | timkam wrote: | A key problem in Sweden -- besides the weird interaction of | privatization and legacy over-regulation -- is that the current | inflation and rising interest rates break the social contract: a | relatively even salary distribution allowed many people to have a | solid middle-class life style, recently albeit with never-ending | mortgages. Now, the interest rates are too high for these | mortgages to be even superficially sustainable, people have less | money at hand to pay for them, and there is no political will to | relief the working and middle class, which means many will slide | down the social ladder. As an immigrant living in Sweden I fear | that the country will soon be pretty unattractive to live in for | most 'internationals' who have a choice. | jokethrowaway wrote: | It's the same everywhere, not only in Sweden. | | What a surprise. The government got your taxes AND screwed you | with inflation over time. | | Then COVID happened and they had to print more, postponing and | aggravating the crisis. | | Now it's time to pay and nobody will take the blame. | | When are people going to rebel? | moltar wrote: | I think you could say exactly the same story about Canada. And | imagine many other countries soon. Interest rates will spoil | the party. | varispeed wrote: | > which means many will slide down the social ladder. | | That is intentional - part of you will own nothing and you will | be happy - programme run by World Economic Forum and their | politicians they penetrated governments with. | | Many people still don't believe it and develop cognitive | dissonance, saying it's not happening, it's a conspiracy | theory, despite having their own savings disappear, being able | to afford less and less and so on. ___________________________________________________________________ (page generated 2023-04-01 23:00 UTC)