STOCKHOLM Aug 25 The Swedish opposition party
that is favoured to win September's general election said that
increasing the pace of homebuilding was key to easing the
country's house price boom, while possible other measures should
not hit first-time buyers.
Magdalena Andersson, in line to be finance minister if the
Social Democrats - as expected - win power, said a housing
shortage had driven up prices and household debt levels needed
Swedes have piled on debt after years of low interest rates
and easy access to credit and the central bank, among others,
has warned of economic disruption if more measures are not taken
to bring down sky-high borrowing levels.
"The most important measure to get in place is to ensure
that you get building started," Andersson told reporters.
One Social Democrat proposal is to provide monetary
incentives for companies building rental flats and for
municipalities building rental homes.
After decades of booming house prices, household debt
levels, at over 170 percent of disposable income and seen
rising, are among the highest in Europe.
Sweden has already introduced a cap on how much households
can borrow - 85 percent of the purchase price - but there is
widespread agreement that more needs to be done.
Andersson said that the Social Democrats - the largest
opposition party and likely to head a coalition government from
after the Sept. 14 vote - had not decided whether there was a
need for compulsory capital repayment or whether the mortgage
loan-to-value cap needed to be adjusted.
"We have no proposals about whether to change the
loan-to-value cap or to introduce amortisation requirements,"
She said it was important to look at measures in terms of
their wider effects.
"I think it is good that we discuss this in a broad context,
so that we don't make it too difficult for younger households
who don't have parents who can support them financially to buy a
home," Andersson said.
Earlier in August, Finance Minister Anders Borg said Sweden
needs to introduce requirements that would force borrowers to
pay off their mortgages over time instead of paying only
interest on borrowing, as many Swedes do.
The Riksbank has said a range of measures could be
considered, including reducing mortgage tax breaks.
A council including the central bank, the Financial
Supervisory Authority, the Debt Office and the government will
meet in November to thrash out a plan to cut household debt
(Reporting by Daniel Dickson; Editing by Simon Johnson and Toby