[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.