[farnerup]

Well, interest rates have been very low for a long time, so renting money to buy an apartment was basically free. The politicians couldn't do much about that, but recently they introduced mandatory mortgage repayments. Not sure if it has had much of an impact though.

There are far too few rental apartments available, I guess because economic liberalism has dominated in Sweden in recent decades. Buying an apartment made far more economic sense anyway, If you had the means.

[jks]

Also, AFAIK, in Sweden you traditionally aren't expected to pay back the principal on your mortgage in any specific amount of time. They have added restrictions in recent years, but I think you can still start making only interest payments once the principal is worth half or less of the loan collateral. This combined with low interest rates would have the effect of letting home prices surge.

[hoaw]

I wouldn't say it is tradition. It is just that since housing wasn't just left to the private market for much of the second half of the 20th century property prices were never that high to begin with. Even when prices were inflated, and crashed, in the 90s they were a third of what they are today.