Det finansielle markeds betydning internationalt set for boligprisernes kraftige og langvarige stigning

Abstract

How does the development of the credit markets affect the price on houses? This question is the focus in this report. During the last 30 years we have seen a transformation of the credit markets for mortgage loan in many countries. In the past markets for mortgage loan were heavily regulated, but also very cheap because of economic support from the state. Today, the markets are ”market friendly” in many countries. In some countries, however, markets have not changed very much and remain regulated today. Many of the new loans have led to a reduction in monthly payment and thus made it possibly to borrow more money. This has driven the house prices to a higher level than ever before. The main disadvantage of these new loans is that house owners today are very exposed to risks - especially the risk of an increase in the interest rate. The reason why house owners choose these risky loans seems to be a lack of financial understanding. Many do not have the skills to understand simple finance, others underestimate the risk of increased interest rate levels and large numbers of house owners have a very short planning horizon. This all leads to a focus on the monthly payment today. However, this development could not have been possible without the lenders. During the last 30 years the financial sector has changed from a cautious business to a business in search for profit. Another reason is the low interest rate which has driven lenders to take more risk taking and finally lenders also seem to have really underestimated the risk of losing money.