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Swedish housing loan ceiling has stopped biting. Borrowing to grow gradually

Monday, 30 April 2012
Swedish household loans from banks and mortgage lenders grew by 5 percent in March. This is the lowest growth for 15 years. But for the first time since the mortgage ceiling was imposed, the downward trend has broken.

The growth rate of household loans from banks and finance companies has declined month by month since September 2010. But in March, the curve flattened out, according to recent figures from Statistics Sweden (SCB).

In March household loans grew with 5 percent, which is exactly at the same level as in February. Compared to March last year, when the growth rate was 7.3 percent, however, households shifted down borrowings with a couple of percentage points.

The increase in February and March are the lowest since the first quarter of 1997, according to SCB's statistics, when household loans grew by 4.4 per cent annually. The debt mountain which grew the most during the period 2005 – 2007, when the annual growth rate was 11-13 percent.

Since then, the figure remained at 8-10 percent, before the curve started to decline in autumn 2010, when the Financial Supervisory Authority introduced a mortgage loan ceiling of 85 percent of market value.

Households' total loans at the end of March Skr2672 billion, an increase of Skr127 billion compared with the corresponding period last year. The bulk consists of mortgages, registering an annual growth rate of 5.2 percent in March.

The remaining part of household loans of which include consumer loans, in March was Skr165 billion.
By Team

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