House buyers in Sweden have never had it so good, at least by some measures. But, as Sonia Legg reports, cheap credit and spiralling prices may be creating a bubble - one that could send the country's economy reeling when it bursts.
Zaki Khalil and his family spent 14 days travelling from Syria to Sweden. It was an arduous trip - but worth it. (SOUNDBITE) (Arabic) SYRIAN REFUGEE, ZAKI KHALIL, SAYING: "After two years of suffering you start thinking this is impossible. But the impossible has happened, and for me, it's a miracle." Sweden, like Germany, is a favoured destination for many of the current migrants. It has one of Europe's fastest growth rates and the standard of living is relatively high. But there's a potential problem looming. Sweden may have brought the world flat-pack furniture but the houses it goes in are far from cheap. Apartments in Stockholm have gone up 20 percent in a year and now cost as much as they do in London. Simon French is Chief Economist at Panmure Gordon (SOUNDBITE) (English) SIMON FRENCH, CHIEF ECONOMIST, PANMURE GORDON, SAYING: "The zero and negative interest rates is really causing a boom in the real estate sector and that comes with significant financial stability risks which becomes a bit like the banks prior to the financial crisis which were too big to fail." The potential perfect storm comes partly from consumer debt - currently at 175 percent of disposable income. If the central bank takes action the housing bubble could burst - leaving some homeowners in negative equity. (SOUNDBITE) (English) SIMON FRENCH, CHIEF ECONOMIST, PANMURE GORDON, SAYING: "It is not an attractive cocktail and like a lot of countries what they desperately need is a move away from the doctrine of austerity and to live on more expansionary fiscal policies." There's been talk about a government crackdown on lending. But that's sent prices even higher, with buyers rushing to get deals done now. Mortgage borrowing in September grew at its fastest rate in more than four years.