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Why northern Europe is so indebted (2021)

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Re: Why northern Europe is so indebted (2021)

#61

Post by nonethewiser »

bkor wrote: post #57
nonethewiser wrote: post #40

Many of the reactions here seem rather defensive. Observing that mortgages are the main driver isn’t some takedown of the article. It makes the exact same observation.

> It makes the exact same observation. I find it highly difficult to figure out what the article is trying to say. This especially as it's trying to say something about private debt vs the welfare system. I don't understand what the article is trying to say, especially the link between welfare system vs mortgages vs debt.

What I got out of it is that mortgages are the main driver and that they see a correlation between welfare benefiting young people and higher debt. By contrast countries where the welfare is more focused on the elderly there is less household debt.

Re: Why northern Europe is so indebted (2021)

#62

Post by kiba »

robomartin wrote: post #44
cronin101 wrote: post #6

This is such a non-story, mainly driven by the fact that home ownership in Nordic countries is ubiquitous (80% of Norwegians OWN their primary dwelling) combined with the high medium incomes resulting in those houses being quite expensive. I’d really recommend not trying to draw any deeper conclusions from this data. Edit: by “own” I mean “have a non-paid off mortgage”, the tax on net wealth here actually disincentiv…

> 80% of Norwegians OWN their primary dwelling I see your clarification. Question: In Norway, if you pay-off your mortgage, do you still owe annual taxes on your property? If so, how much? What happens if you don't pay property taxes? One of the things that has always bothered me about home "ownership" is that, from my perspective, at least in the US, you never really own your home. You can pay off your mortgage, of…

Someone might say: We need taxes to pay for X. Well, sure. I get that. We should get that money through other means, not through a system where people work their entire lives to pay off a mortgage only to discover they will have to keep paying to "own" that home for the rest of their lives. Perhaps the distinction should be your residence vs. investment/rental property. Not sure. Haven't through it through much deeper than that.

I think we should tax land, but not buildings. Land shouldn't be horded and should be distributed to folks who are best to make use of it for societal's benefit.

The idea of building enough nest egg for retirement doesn't make sense to me, especially if we take the long term perspective. It only make sense because we age over time and thus get weaker and frail. If we were always healthy as a horse, then we would have periods in which we work for our living, but not permanent retirement.

Re: Why northern Europe is so indebted (2021)

#63

Post by sohtym »

nonethewiser wrote: post #58
robomartin wrote: post #44

Earlier quoted context omitted.

> 80% of Norwegians OWN their primary dwelling I see your clarification. Question: In Norway, if you pay-off your mortgage, do you still owe annual taxes on your property? If so, how much? What happens if you don't pay property taxes? One of the things that has always bothered me about home "ownership" is that, from my perspective, at least in the US, you never really own your home. You can pay off your mortgage, of…

I’m sympathetic to this observation but what’s your point? Just a tangent? There is nothing wrong with that but I’m not sure if this is supposed to clarify something. For whatever it’s worth it looks like at least Sweden and Norway have property taxes. Didn’t check others. China is an example of a country without them. Except you can’t own land in China. Your house is effective leased from the government. So not exac…

Sweden technically has a property tax, but it is a maximum of ~900€ a year.

Re: Why northern Europe is so indebted (2021)

#65

Post by [deleted] »

chrisco255 wrote: post #15
smcl wrote: post #7

Not Northern Europe, but Czech Resident here. There has been an explosion in house prices here, a truly wild one. I bought my place for 3.6m CZK about 7 years back and according to a recent valuation practices is "worth" nearly double this now. It is fucking wild, and tbh I kind of hate it.

In US markets, prices have basically tripled from what they were 7-9 years ago.

[deleted]

Re: Why northern Europe is so indebted (2021)

#66

Post by lnsru »

ajsnigrutin wrote: post #36
smcl wrote: post #7

Not Northern Europe, but Czech Resident here. There has been an explosion in house prices here, a truly wild one. I bought my place for 3.6m CZK about 7 years back and according to a recent valuation practices is "worth" nearly double this now. It is fucking wild, and tbh I kind of hate it.

How much new housing is being built there? I'm from slovenia, former yugoslavia, and the situation here is the same, making it practically impossible for an average couple to buy anything here (and we're worrying about the demographics, lol). Back in yugoslav times, government built large apartment building complexes, by basically finding an empty field at the end of the city, saying "this is a city, farms should be…

You’re there not alone. Almost no new buildings are being built in Munich. Everything in the city remembers Munich Olympic Games in 1972. Dozen new buildings build yearly are a shy rounding error compared to the real need. Rent of 3 room apartment crawls to 2000€ monthly. That’s roughly a salary of a cashier in supermarket or car mechanic. Buying is for riches only. Building does not work because of zoning despite having plenty empty land in 50 km radius. Potatoes are more important.

Re: Why northern Europe is so indebted (2021)

#67

Post by betaby »

legitster wrote: post #23
chrisco255 wrote: post #15

Earlier quoted context omitted.

In US markets, prices have basically tripled from what they were 7-9 years ago.

Uh... big asterisk here depending on where you live.

Is it? It 'feels' like true for places where most of the population lives.

Re: Why northern Europe is so indebted (2021)

#68

Post by 1B05H1N »

sohtym wrote: post #8

Seems a bit general. Sweden is very much in debt because of the housing market. 15 years ago there were little regulation. You could get a 100 year mortgage with a variable rate and no money down. At the same time the government sold large amounts of public housing at below public market rate. Interest rates went from ~4% to ~1.5%. With no wealth or property taxes, but with tax deductions for renovations and interest…

I really was born too late

Re: Why northern Europe is so indebted (2021)

#70

Post by jltsiren »

sohtym wrote: post #54
matsemann wrote: post #10

When you live in a stable society and have gotten a free education and a nice job, it makes sense to get a loan to buy a place to live and start paying a mortgage instead of debt. Contrast with a society where the average education might be lower, less people having a stable job in a slow labor market, and if you lose your job there is no safety net. Hard to get a loan, so end up renting for longer, and in turn have…

> Contrast with a society where the average education might be lower, less people having a stable job in a slow labor market, and if you lose your job there is no safety net. Educational attainment in the Nordic countries isn't actually that good. It might have been at one point. These days I think it sometimes looks good because some statistics count having any experience at higher levels, which having cost-free edu…

You should look at the statistics more carefully. Educational attainment means the highest degree – those with a master's degree are not included in the numbers for bachelor's degrees. Nordic countries traditionally had a system where master's (or equivalent) was the primary undergraduate degree in proper universities (or equivalent).
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