Manifest Analysis Center’s new housing report, which was presented on Tuesday, reveals that Norway has one of the highest debt ratio of OECD countries.
The report relies on figures from the International Monetary Fund and the national budget for 2013. It shows that the private debt level in Norway is significantly higher than in the United States, where the private debt burden was around 140 percent when their housing bubble burst in 2008,” said the Manifest Analyses housing report.
Talking to news agency ANB, investigator Ebba Boye says that debt trend is very troubling. Many thnik the Norwegians have been so much richer, but many people finance their purchases with debt, says Boye.
Boye is particularly concerned that young people today find themselves in a more competetive and burning housing market. So, this situation leads the debt level higher.
The investigator refer to a generation gap in the current Norwegian market purchases.
– Older generation sits on a large housing stock, while younger generation either gets help from their parents to buy a house for taking out larger loans or they need to hire for soaring prices, says Boye.
Financial Services Authority (Finanstilsynet), in response to the increasing debt trend, has proposed banks to set higher capital for mortgage. Also, they suggest increased housing construction, facilitation of land, municipal planning and transport policies are important in figting with the increasing debt burden in housing market.