Why do Norwegians have such a high debt to income ratio? (241%)

7 comments

1. Homes are extremely expensive, to the point where a small apartment in a small city can cost many millions of NOK.

2. It is just not the households in Norway that has a lot of debt, it is also the government. The government has almost twice the debt compared to Sweden per capita. This was one of the key things brought up during the corona crisis that Norway need to sort this out since it is potential a huge risk for the Norwegian economy.

3. Boomers fucked up the housing market

4. It’s because the rate of home ownership is extremely high in Norway. The vast majority owns their home which drives a lot of new debt. Renting is so expensive that it pays off in the long run to service a loan rather than paying rent.

   Most of this is the boomers and gen x’ers fault. Housing prices has been rising steadily for the last twenty years without any policies to address the issue. We knew 10 years ago that we’d be at the risk of a debt crisis at some point because of new housing shortages. Young people are primarily the ones taking the hit now since the market has been rigged in favor of those who owned real estate in the early 2000s.

   Out debt risk didn’t have to be this severe, but it is how it is because those in their 50+ chose to cover their own asses instead of making responsible housing policies.

5. It’s not dangerous. We have a safety net if things goes south.

6. It’s because of the polisies of the government that favours people who take loans to by homes. Tax deduction and such. A mentality that home ownership is the greatest achievement you can do makes the market think it can never possible tank, and prices keep on going up. Everyone’s Identity includes if you have been able to buy a house or not.

   The government also caps what you can lend to 5x annual income amongst other things to try to make the market stable. Less chance for market crash makes people lend more without thinking of it as a risk.

   Also what you pay in cost for a loan is less than what you would pay in rent. Making it economically favourable to buy with a loan. I also think the interest is amongst the lowest in the world. Much due to very strong regulations and rights for private borrowers so that the banks must compete for the customers.

7. Just expensive housing causing people to have large mortgages on their homes.

   Why is it expensive, because of politicians messing things up, and Norwegians wanting it to be expensive.

   In a few years time the Boomers will all be dead, and a lot of people will inherit a lot of valuable properties. Going to be great for those that do.