I get annoyed a little now and then on the media when it comes to their reporting. This time, it was a pity for especially young people, because in the future they may not be able to borrow more than 600% of disposable income.
The article that was in the SvD was a lot about how bad it was for the young people who couldn’t buy an apartment in the middle of central Stockholm. The calculation was that an average salary of USD 17,500 after tax would give a possible loan of USD 1.3 million. This was not enough then in central Stockholm. Something that I also have no hesitation at all and it is not the thing really that there are no apartments to buy if you do not have money.
In my eyes it is perfectly natural that in the most popular places it costs much more to buy.
It is not surprising that a young person with a fairly low salary cannot buy immediately. I know I have written about this before and my opinion that it is not a right for us to live in the perfect place still applies.
I have never really liked big cities myself, but I would like to think of a nice house on the rocks on the west coast. However, something that I am not even close to being able to afford, which I do not intend to whine about either. Maybe there will come a time in the future when I can afford a living of this kind, something I have to work towards not whine about that I can’t get now.
Sweden and commuting
When it comes to housing, it is the situation that accounts for the largest part of the costs. If you do not have the money then you simply have to move to a place that is cheaper. But in Sweden, it almost feels like there is some unwritten law that it is very naughty to force people to commute.
I myself sometimes watch the English programs with people who want to move to the country, and then we often talk about having commuting times of 1 ½ hour or something, something they don’t seem to whine about. According to surveys I can find, the average time is 67 min (workers) and 73 min (students) that Japanese residents around Tokyo spend on commuting every day.
You can live around Stockholm
As far as I can see, there should be no major problems in finding a place to live from Stockholm. Now I am not a professional in this area of the country or so but what I can see is there, for example, a townhouse (141 sqm) in Vallentuna that looks completely okay (ie you do not need to renovate) that costs just under the million. Sure, there is a rent, but you can probably expect that.
So there are homes that are not too far away and I find it hard to imagine that it would be worse in other parts of the country. So I do not think it is a pity if people with lower incomes get to go a bit, but that is what you can expect when you take the first steps on the housing ladder.
600% is really very real
So there may be a requirement that says that one must not borrow more than 600% of their disposable income, I do not think it sounds strange when you think about it a little. In the article, they had interviewed a manager at a bank, which I unfortunately do not remember who said they already had rules that say they do not approve by more than 500%.
If we think a little about how much 600% really is, then you get a little scared. So it would take 6 years to repay a mortgage, which may not sound like a particularly long time. But now we are talking about income after tax which is nowhere near what you can use to pay back. General housing costs and food, for example, are things that are difficult to avoid. If you eat for USD 2,000 a month, this would only extend the time by 0.8 years. Say that you manage to put aside $ 3,000 each month to be used to repay your loan, we will have 35 years to repay your maximum-average payday loan.
Before we bump into rules, we really need to think about what they mean. These rules that may come are not there to make it unnecessarily tough for young people or anyone else to enter the market. Without them, people are not in a financial predicament that they have trouble getting out of.
The biggest problem with the media
What really makes me most annoyed with the media is how it shoots in all directions. One day, as in this article, it is a great pity if people are not allowed to borrow as much money as they want. The next day, an article comes out that we have a housing bubble or that many Swedes have too much debt.
So one day you try to say how people should borrow more when the next day you say this is wrong. To make people victims that they cannot borrow is to influence in a direction that we must have clear. Had there been a line I could have bought it but even if it had been a line I don’t share. Now it just feels like you are looking to write articles that sell as much as you can without taking any responsibility for what is written.
Unfortunately, the media sometimes have far too great an impact on our lives. If a politician says something to you, you critically review it, knowing that he wants to influence you to something. When the media says something you are not at all as critical which is very dangerous as it can lead to clearly bad things.
Now, I would not say that a page like this is part of the media as it would go way too far.
But what you can say is that we can influence people to believe things. If we write about how good something is without addressing the negative aspects, for example, we could influence something wrong. Of course, we do not try to do this as it would not be directly moral to us. But writing that we are not trying to be naughty does not mean that you believe me. Review everything critically and then of course I include what I write here or you will find elsewhere on this site.