I don't think there is one major/capital European city that doesn't have outrageous prices right now, at least from what I've seen.
That shouldn't stop us from finding solutions to similar issues outside of the major cities like Copenhagen, even if the problem isn't as noticeable in the country-side or minor cities.
Most countries outside of the US also have a "fix" for this specific problem just by not having 30 year fixed rate mortgages. For example in Canada most fixed rate mortgages are only fixed for 5 years. So we don't have the mortgage lock in effect that the US has, but that's only one cause out of dozens for outrageous housing prices.
Structurally, the Canadian housing market is much less broken than the US, IMO. Toronto and Vancouver are adding housing at rates unparalleled in any US city outside of Texas.
But Canada also has population growth ~10X that of the US.
You guys have 30 year fixed rate mortgages???? How the hell can that work? How can banks predict with any accuracy the interest rates for that kind of period?
I had a 3-year fixed rate mortgage some 5 years ago, fixed at the rate of the time which was historically extremely low (below 2% pa), before the interest rates skyrocketed, and was really happy :D I had a couple of years on those rates... but then I went to re-negotiate and it was best to get just floating rates as the banks were all panicking and would only freeze rates for 3 years at outrageous levels... I think I got floating rates at around 3.5% or 4.0% (it has gone down since). I imagine it would be extremely dangerous for a bank to just have frozen my rates for 30 years anywhere near that historical low, so you would have to pay a huge margin for them to take that risk , no?
Thank fuck my mortgage rate is locked in. I refinanced when rates were at rock bottom, I'd hate to see what my mortgage payment would look like today if my bank was allowed to raise it.
That's the Canadian system, have to renew your rate every 5 years. It's great for the banks. The tighter regulations helped Canada avoid the underwater mortgage fiasco of the US in 2008/2009, but mostly it's just a really good deal for the banks. :)
It’s the same problem in every desirable major city in the world, especially if you do relative comparisons within the country. Demand won’t die unless we start seeing widespread depopulation that can’t be offset through immigration, and from the supply side, it’s in the best interest of the homeowners (majority of the voter base) to keep the prices high. Basically, our best bet is to slow down the housing inflation, rather than deflation. Since it won’t happen easily, and if it happens, there will be bigger and worse problems.
I might be wrong, but that’s what I gather while renting in one of the hot spots of extreme housing prices (Vancouver).
#1 is Set a goal of building 1.5 million new homes in ten years.
#2 is ... set “growth in the full spectrum of housing supply” ... as the most important residential housing priorities...
#3 is ... Allow “as of right” residential housing up to four units and up to four storeys on a single residential lot. ...
etc.
So a lot of these boil down to build more houses / let people build more houses.
That shouldn't stop us from finding solutions to similar issues outside of the major cities like Copenhagen, even if the problem isn't as noticeable in the country-side or minor cities.