Denmark Faces ‘Out of Control’ Housing Market in Negative Spiral
ByDenmark’s biggest mortgage bank is warning there’s a risk the housing market may get “out of control,” especially around cities, as long-term negative interest rates make borrowers complacent.
“To be concrete, there is a danger that Danes go blind to the risk of rates ever rising again,” Tore Stramer, chief analyst at Nykredit in Copenhagen, said in an e-mail. “That raises the risk of a major housing price decline, when rates at some point or other start to rise again.”
Denmark’s central bank has had negative interest rates for the better part of four years. Thomas F. Borgen, the chief executive officer of Danske Bank A/S, says his managers are operating under the assumption that rates won’t go positive until “at least” 2018, with Britain’s departure from the European Union adding to the risk of an even longer period below zero…
Denmark Faces ‘Out of Control’ Housing Market in Negative Spiral
