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The Shock of Sweden's Housing Market Is Hitting the Country's Currency

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Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#131

Post by ptaipale »

woah wrote: post #122
ptaipale wrote: post #100

Earlier quoted context omitted.

Or more accurately, you cannot avoid paying for it (as it is collected in employment taxes). The employer has to pay 4,35 % as sjukförsäkringsavgift , as well as other payroll taxes that total 31,42 % of nominal salary (2017). https://sv.wikipedia.org/wiki/Arbetsgivaravgifter_i_Sverige

Is that in addition to income tax?

Yes but that's "paid by the employer" which means that it's on top of nominal salary, but obviously included in the total tax burden.

Employer pays $6000 per month, nominal salary is $4565, and employee's income tax 35 % => employee gets $3000.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#132

Post by astura »

Dylan16807 wrote: post #114
lisper wrote: post #107

Earlier quoted context omitted.

> High housing prices are great for those who already owned houses Not really. Rising prices (not high prices) are great for people holding houses as investments . But for owner-occupied houses, rising prices are as bad for the owners as they are for everyone else. my wife and I own a house in Northern California, which we bought during the sub-prime crash. Since then it has nearly doubled in price. It is also too bi…

That's more because prop-13 is a garbage fire than any other factor.

Well, if you didn't have prop-13 wouldn't your taxes just go up anyway even if you didn't sell? Around these parts all real property is reassessed every five years. So the tax burden would hit right away rather than when you sell which would be worse.

I have a family friend whose neighborhood became really high end since the 30 years she bought the house. Her taxes are really high now and it's becoming a financial burden on her.

Unless I'm mistaken.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#133

Post by pacala »

astura wrote: post #69
Supernaut wrote: post #36

Earlier quoted context omitted.

Your use of the term "obsession" implies a degree of irrationality. Many people, myself included, would contend that the desire to own your own home is eminently sensible.

Jeez, nobody said the desire to own your home was irrational, by definition. You can have a rational desire to own a home or you can have an irrational obsession. Irrational obsession would include things like when you prioritize homeownership over financial security and other basic necessities like healthcare or food. For example I know someone who gave up health insurance to buy house - and she readily admits this.

A broader definition of financial security _includes_ home ownership. The other options are homelessness and renting. The first one is silly, the second is just paying the landlord mortgage while being exposed to financial risk over the long term.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#134

Post by ppeetteerr »

dfhdfhfdh wrote: post #73
baursak wrote: post #17

I don't get it. When prices are high, it's a housing crisis. When prices are going down, it's a housing crisis. It's almost as if news articles just need to be written regardless of the reason.

Maybe housing shouldn't be a market system. Instead, housing should be free and landlords should be abolished.

The first part makes sense, the second is just communist non-sense. Location is still important and better location will be desirable, regardless of the value system you use to value desirability.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#135

Post by rayiner »

phaemon wrote: post #104
staticelf wrote: post #47

Earlier quoted context omitted.

Well, if you are increasing the population a lot, all of those people are going to need somewhere to live. It isn't really hard to figure that out but most people don't seem to make that connection. Don't understand how it could even be remotely racist or popular. The statistics of housing prices correlates very well with increases in immigration. Of course, correlation does not imply causation but in this case I'm p…

> Well, if you are increasing the population a lot But you aren't increasing the population "a lot", now are you? You linked to a graph that shows around 350,000 asylum seekers over 5 years. What percentage of Sweden's population is that?

It's over 3.5% of the total population, which is equivalent to the U.S. adding about a million people. Also note that they're going to be concentrated into relatively few urban areas, instead of being spread out over the entire country.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#136

Post by mbesto »

lisper wrote: post #107
opportune wrote: post #14

When will we learn that a "strong" housing market is not necessarily a good thing? High housing prices are great for those who already owned houses but terrible for everyone else (e.g. the entire generations born after prices became inflated). Not to mention people are greedy and will over leverage themselves when interest rates are good. No country should let the "landed gentry" hold them hostage over interest rates…

> High housing prices are great for those who already owned houses Not really. Rising prices (not high prices) are great for people holding houses as investments . But for owner-occupied houses, rising prices are as bad for the owners as they are for everyone else. my wife and I own a house in Northern California, which we bought during the sub-prime crash. Since then it has nearly doubled in price. It is also too bi…

Fellow Northern California homeowner here. You can sell it and you will net a return. I'm not sure I understand your gripe. It sounds like you're annoyed about the hassle of moving , the associated fees, etc. But the parent's point is valid - the appreciation of value of your house is great for you.

> 1. Capital gains tax

Note - if it's your primary residence you get capital gains relief on the first $500k.

> 2. Real estate agent fees

If you're in the bay area, then you negotiate these down to the minimum (IIRC 2.5%) because the market is so liquid and the agents add very little value (if you're smart). Also, you can negotiate not to pay the commission if you're the buyer. So the only burden is on the sale, which is less impactful since you've already made a profit on it.

> 3. Higher property taxes

Yes, this is a bitch in CA...see next point.

> we can't afford to move!

Clarification - you can't afford to move in the general vicinity, but you could certainly move to Nevada (for example). If you are not viewing your house as an investment, then guess what? You get to live in an area that is high demand! Good for you for timing the market appropriately when you bought.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#137

Post by saosebastiao »

graedus wrote: post #126
saosebastiao wrote: post #108

Earlier quoted context omitted.

The fact that you take that as an axiom is frightening. Moderate deflation is no more scary than moderate inflation, and the idea that an "overall inflation rate" determines people's behavior is laughably wrong. I mean, which of the thousands of inflation rate definitions are you talking about? The FRED database tracks 34,000 different series of some 10,000 inflation measures. More importantly, people don't sense ove…

I think the post you're responding to is being critical of the unexplained/unexamined axiom that "deflation is bad", which is usually an underlying assumption in the financial press.

Wow. I had to take a look at the grandparent comment to understand he was being sarcastic. Thanks for the correction.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#138

Post by mbesto »

lisper wrote: post #124
astura wrote: post #121

Earlier quoted context omitted.

Do you have to pay capital gains tax on your primary home? I was under the impression you didn't if you lived in it for X number of years.

There's a 500k exemption, but our house has appreciated more than that. The more it goes up, the more we lose if we move.

But you're not "losing" more...you're only losing more in relation to the gain that has appreciated.

Are you inferring to the fact that the rest of the market is appreciating at the same rate, and thus "losing" out when you buy on the downsize?

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#139

Post by paulsutter »

lisper wrote: post #107
opportune wrote: post #14

When will we learn that a "strong" housing market is not necessarily a good thing? High housing prices are great for those who already owned houses but terrible for everyone else (e.g. the entire generations born after prices became inflated). Not to mention people are greedy and will over leverage themselves when interest rates are good. No country should let the "landed gentry" hold them hostage over interest rates…

> High housing prices are great for those who already owned houses Not really. Rising prices (not high prices) are great for people holding houses as investments . But for owner-occupied houses, rising prices are as bad for the owners as they are for everyone else. my wife and I own a house in Northern California, which we bought during the sub-prime crash. Since then it has nearly doubled in price. It is also too bi…

Consider renting out your current house and buying that smaller house to live in. Talk to your tax person, you may get depreciation and more.

EDIT: person

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#140

Post by rayiner »

charlesdm wrote: post #43
alkonaut wrote: post #10

There are tons of things inflating house prices. The most important for Sweden are - Deduction of interest expenses from income tax. - Too long mortgages (100 years or more) means nominal prices are high which add to the risk - Historically big mortgages (90, 100 or even 110% of the cost could be financed - yes negativev down payments existed in the early 2000's). - Rent control of almost all flats, meaning no one wi…

100 year mortgages? Why is this? Because prices are too high for average folks to purchase otherwise, or because people prefer "owning" (renting from a bank) instead of renting from a landlord?

Seems like renting from instead of renting from a landlord is a good way to get around rent controls.
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