5 Today, I would like to discuss how we can balance today's challenges against tomorrow’s gains. In my opinion, we must adopt measures that can be seen as costly today to solve problems that could improve the housing market in the long term. And managing the problems on the housing market will require other/more measures than those falling within the framework of macroprudential policy. For the Riksbank, it is important to monitor the housing market: it is well documented by empirical studies that a rapid increase in debt increases the probability of financial crises and falling prices on the housing market. The economy can also become more sensitive to various shocks if households (and companies) are highly  4 See, for example, Bäckman, C, C Lutz (2018) and Cunliffe, J (2019). 5 See Finocchario et al. (2016). 2 [13]  indebted. The studies also show that, if the banking system has large exposures to the housing market, financial stability can be threatened. 6 In the Riksbank’s task of promoting financial stability 7, it is therefore important to ensure that the banks and their borrowers have resilience to shocks that could threaten financial stability. In addition, if financial stability should start to falter, there exists a risk that it would become more difficult to conduct monetary policy.
As far as we can see, these requirements have more or less had the effect that could have been expected: credit expansion has slowed down a bit and people who were previously taking very large loans are now taking smaller loans. 24 According to the random sample from 2018 upon which Finansinspektionen’s latest mortgage survey is based, the average debt-to-income ratio among new mortgage borrowers is 398 per cent, which is slightly lower than in the previous year. The proportion of new mortgage borrowers with mortgages exceeding 450 per cent of their annual gross income also fell between 2017 and 2018. The fact that many new mortgage borrowers are choosing to borrow amounts just below the stricter amortisation requirement indicates that this has affected households’ propensity to take out very large loans in relation their incomes and, ultimately, the kinds of objects they are deciding to purchase. 25 If a household has previously wanted to purchase a one bedroom flat in a metropolitan area at a price of just over 2,500,000 kronor, the macroprudential policy measures have made it more difficult for the household to purchase this object. However, it is important to use the terms correctly. Those households that have been affected by the amortisation requirements and that want to purchase a tenant-owned apartment have not been excluded from the housing market, but only from purchasing that one-bedroom flat for 2,500,000 kronor. Such households can, instead, choose to purchase another one-bedroom flat for a lower price.