"Swedish house prices have increased by an impressive 130% in real terms over the last 10 years".
"Our colleagues David Miles and Vladimir Pillonca estimate that slightly more than 50 percentage points of this increase can be attributed to expectations of further increases in house prices, while only around 30 percentage points can be put down to the reduction in real interest rates."
"At the same time, household indebtedness as a proportion of disposable income has reached 140% (see the Riksbank’s latest Financial Stability Report)."
"In 2H07 house prices ground to a halt; if the housing market goes into reverse, household balance sheets will be affected substantially."
I think the same can be applied to any Nordic country...
Source: Morgan Stanley
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