Girouard N, M Kennedy and C André, 2007, “Has the rise in debt made households more vulnerable?” OECD Working Papers, no 535, 3 January.
Glick, Reuven, and Kevin J. Lansing, 2010, “Global Household Leverage, House Prices and Consumption,” Federal Reserve Bank of San Francisco, Economic Letter
Johansson, Martin, W., and M. Persson, 2006, “Swedish households’ indebtedness and ability to pay – a household level study.” Riksbank Working Paper.
Persson, Mattias, 2009, “Household indebtedness in Sweden and implications for financial stability – the use of household-level data.” BIS Papers No. 46.
Riksbank’s Commission of Inquiry Into Risks on the Swedish Housing Market–RUTH, 2011, Sveriges Riksbank
Prepared by Rita Babihuga (EUR)
As part of its employment support measures during the crisis, the government introduced a new tax deduction at the end of 2008 of up to 50 percent on housing renovation and rebuilding, which has since been raised to SEK 50,000 (EUR 5,000) per house owner and year. This tax deduction has been popular and widely used, and thus, has provided support to mortgage lending activity and in particular the construction sector during the economic downturn.
In the case of Sweden, data on housing wealth are unavailable beyond 2007 due to abolition of the household wealth survey in 2007.
The S-Curve is a cumulative distribution, in this case, illustrating households’ interest ratio.
Net interest ratios of older borrowers are likely influenced to a larger extent by holdings of financial wealth and hence, interest incomes, which may explain why net interest ratios are lower than the average.
This survey was previously administered by Statistics Sweden on behalf of the Fiscal authorities. It was discontinued in 2007 along the repeal of the wealth tax.
The mortgage survey was carried out by FI over a 3 day period in late September 2009, which represents the seasonal peak of new lending. It covered new mortgage lending over this period for banks which together represent 90 percent of the Swedish mortgage markets. The sample contains information about the borrower’s debts and disposable income, the market value of the property and the banks’ “left-to-live-on” calculations.
See Jonsson et. al., “Household Indebtedness – consequences for the banks’ credit losses and financial stability”, in RUTH (2011)
See Sweden FSAP Update: Technical Note on Stress Testing (2011)