Let me begin by discussing different types of measure more generally, and then I will say a few words on the quantitative effects of household indebtedness. Put simply, we can say that there are two different ways to manage the problems on the housing market: either attempt to increase the housing supply in order to dampen housing prices, or dampen demand for housing and mortgages by making it more expensive to borrow, or simply limit how much households can borrow. In terms of measures which subdue demand, it is important to differentiate between measures which affect all loans, or the whole stock of credit, and measures which only affect new loans, or the flow of credit. But let us begin with measures which affect the supply of housing. An increased supply of housing could dampen price increases – but it would take time! Structural problems on the Swedish housing market are the main reason why housing construction has been unable to meet rising demand. An increased supply of housing is a central piece of the puzzle, as it can subdue the increase in housing prices, which would also help to limit household indebtedness. However, the quantity of housing is not the only significant factor in terms of household indebtedness. It is also necessary to review how we can exploit the current housing stock more effectively. The distribution between purchased and rented housing is significant.
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