Housing Price And Household Debt Interactions In Sweden
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Housing Price And Household Debt Interactions In Sweden
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Author : Rima Turk
language : en
Publisher: International Monetary Fund
Release Date : 2015-12-28
Housing Price And Household Debt Interactions In Sweden written by Rima Turk and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-12-28 with Business & Economics categories.
Sweden is experiencing double-digit housing price gains alongside rising household debt. A common interpretation is that mortgage lending boosted by expansionary monetary policy is driving up house prices. But theory suggests the value of housing collateral is also important for household’s capacity to borrow. This paper examines the interactions between housing prices and household debt using a three-equation model, finding that household borrowing impacts housing prices in the short-run, but the price of housing is the main driver of the secular trend in household debt over the long-run. Both housing prices and household debt are estimated to be moderately above their long-run equilibrium levels, but the adjustment toward equilibrium is not found to be rapid. Whereas low interest rates have contributed to the recent surge in housing prices, growth in incomes and financial assets play a larger role. Policy experiments suggest that a gradual phasing out of mortgage interest deductibility is likely to have a manageable effect on housing prices and household debt.
Housing Price And Household Debt Interactions In Sweden
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Author : Rima Turk-Ariss
language : en
Publisher:
Release Date : 2016
Housing Price And Household Debt Interactions In Sweden written by Rima Turk-Ariss and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
Sweden is experiencing double-digit housing price gains alongside rising household debt. A common interpretation is that mortgage lending boosted by expansionary monetary policy is driving up house prices. But theory suggests the value of housing collateral is also important for household's capacity to borrow. This paper examines the interactions between housing prices and household debt using a three-equation model, finding that household borrowing impacts housing prices in the short-run, but the price of housing is the main driver of the secular trend in household debt over the long-run. Both housing prices and household debt are estimated to be moderately above their long-run equilibrium levels, but the adjustment toward equilibrium is not found to be rapid. Whereas low interest rates have contributed to the recent surge in housing prices, growth in incomes and financial assets play a larger role. Policy experiments suggest that a gradual phasing out of mortgage interest deductibility is likely to have a manageable effect on housing prices and household debt.
Sweden
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Author : International Monetary Fund
language : en
Publisher: International Monetary Fund
Release Date : 2011-09-16
Sweden written by International Monetary Fund and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-09-16 with Business & Economics categories.
As in other advanced economies, there has been a significant run-up of household debt in Sweden during the last two decades accompanied by rising housing prices, prompting concerns about sustainability and the implications for financial stability. The rise in household debt and the banking system’s increased exposure to mortgage debt resulted with the changes in the macroeconomic environment. The note explores implications for financial stability of household indebtedness as well as Sweden's specific institutional features to ensure resilience of the financial system.
Macroprudential And Monetary Policy Interactions In A Dsge Model For Sweden
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Author : Mr.Jiaqian Chen
language : en
Publisher: International Monetary Fund
Release Date : 2016-03-23
Macroprudential And Monetary Policy Interactions In A Dsge Model For Sweden written by Mr.Jiaqian Chen and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-03-23 with Business & Economics categories.
We analyse the effects of macroprudential and monetary policies and their interactions using an estimated dynamic stochastic general equilibrium (DSGE) model tailored to Sweden. Households face a ceiling on their loan-to-value ratio and must amortize their mortgages. The government grants mortgage interest payment deductions. Lending rates are affected by mortgage risk weights. We find that demand-side macroprudential measures are more effective in curbing household debt ratios than monetary policy, and they are less costly in terms of foregone consumption. A tighter macroprudential stance is also found to be welfare improving, by promoting lower consumption volatility in response to shocks, especially when using a combination of macroprudential instruments.
Sweden
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Author : International Monetary Fund. European Dept.
language : en
Publisher: International Monetary Fund
Release Date : 2016-11-17
Sweden written by International Monetary Fund. European Dept. and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-11-17 with Business & Economics categories.
This 2016 Article IV Consultation highlights Sweden’s strong economic performance, with real GDP growth heading for about 3.4 percent in 2016 on the heels of an expansion of just over 4 percent in 2015. Employment has increased by 1.5 percent so far in 2016, pushing unemployment down to about 7 percent. Growth is expected to moderate to a still solid 2.4 percent in 2017. The fiscal deficit is expected to be small in 2016, even as migration-related government spending has almost doubled to about 1.4 percent of GDP owing to the surge in refugee inflows in 2015.
Increasing Resilience To Large And Volatile Capital Flows
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Author : International Monetary Fund. Asia and Pacific Dept
language : en
Publisher: International Monetary Fund
Release Date : 2017-09-13
Increasing Resilience To Large And Volatile Capital Flows written by International Monetary Fund. Asia and Pacific Dept and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-09-13 with Business & Economics categories.
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Macroprudential And Monetary Policy Interactions In A Dsge Model For Sweden
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Author : Mr.Jiaqian Chen
language : en
Publisher: International Monetary Fund
Release Date : 2016-03-23
Macroprudential And Monetary Policy Interactions In A Dsge Model For Sweden written by Mr.Jiaqian Chen and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-03-23 with Business & Economics categories.
We analyse the effects of macroprudential and monetary policies and their interactions using an estimated dynamic stochastic general equilibrium (DSGE) model tailored to Sweden. Households face a ceiling on their loan-to-value ratio and must amortize their mortgages. The government grants mortgage interest payment deductions. Lending rates are affected by mortgage risk weights. We find that demand-side macroprudential measures are more effective in curbing household debt ratios than monetary policy, and they are less costly in terms of foregone consumption. A tighter macroprudential stance is also found to be welfare improving, by promoting lower consumption volatility in response to shocks, especially when using a combination of macroprudential instruments.
Macroeconomic Imbalances
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Author :
language : en
Publisher:
Release Date : 2014
Macroeconomic Imbalances written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
Sweden continues to experience macroeconomic imbalances, which require monitoring and policy action. In particular, developments regarding household indebtedness, coupled with inefficiencies in the housing market, continue to warrant attention. Although the large current account surplus does not raise risks similar to large deficits, and is partly linked to the need for deleveraging, the Commission will follow the developments of the current account in Sweden in the context of the European Semester. More specifically, household debt has increased again after a period of stabilisation, as the main contributing factors - low interest rates on mortgages, debt-bias in taxation, slow mortgage amortisation and limited housing supply - remain in place. Various indicators of credit supply and demand conditions do not indicate imminent deleveraging pressures. After stabilising in recent years, house prices increased again in 2013, driven by favourable demand conditions and supply inefficiencies. Moreover, rental market inefficiencies, cumbersome planning procedures and little competition in construction, have also contributed to the house price dynamics. More stable house prices are needed to limit private indebtedness and reduce macroeconomic risks, once debt service costs increase. The recent macroprudential measures are instrumental, but likely not enough, to reduce macroeconomic risks. In particular, strong tax incentives for debt financing are perceived as key drivers of house prices. Higher residential investment would also improve the savings-investment balance. As regards the nonfinancial corporate sector indebtedness the analysis finds that it does not give rise to macroeconomic risks. Moreover, recent reforms in company taxation are likely to further reduce the level of corporate debt by limiting tax minimisation by multinationals.
Fundamental Drivers Of House Prices In Advanced Economies
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Author : Ms.Nan Geng
language : en
Publisher: International Monetary Fund
Release Date : 2018-07-18
Fundamental Drivers Of House Prices In Advanced Economies written by Ms.Nan Geng and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-07-18 with Business & Economics categories.
House prices in many advanced economies have risen substantially in recent decades. But experience indicates that housing prices can diverge from their long-run equilibrium or sustainable levels, potentially followed by adjustments that impact macroeconomic and financial stability. Therefore there is a need to monitor house prices and assess whether they are sustainable. This paper focuses on fundamentals expected to drive long run trends in house prices, including institutional and structural factors. The scale of potential valuation gaps is gauged on the basis of a cross-country panel analysis of house prices in 20 OECD countries.
Sweden
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Author : International Monetary Fund. Monetary and Capital Markets Department
language : en
Publisher: International Monetary Fund
Release Date : 2017-10-05
Sweden written by International Monetary Fund. Monetary and Capital Markets Department and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-10-05 with Business & Economics categories.
This Technical Note discusses the findings and recommendations made in the Financial Sector Assessment Program for Sweden in the areas of the systemic risk oversight framework and management. To promote accountability, the law should clarify the allocation of macroprudential powers between the government and the Finansinspektionen (Financial Supervisory Authority, FI) and grant the FI a clear legal mandate for macroprudential policy, with full operational independence. The Financial Stability Council, or a similar body—excluding the Ministry of Finance—should have the legal authority to issue recommendations, preferably with a “comply or explain” approach. The law should also ensure that the Sveriges Riksbank’s expertise in financial stability analysis finds a clear institutional role in the oversight of systemic risk.