STOCKHOLM: Soaring household debt is a threat to Sweden's otherwise solid and further measures are needed to cool the housing market, the said on Tuesday. "Housing prices are rising fast from elevated levels, resulting in households taking on higher debt burdens and making the economy more vulnerable to shocks," the said in its annual report on Sweden. It said should implement a planned tightening of mortgage repayment rules and introduce a debt-to-income limit. Household debt levels are among the highest in Europe and house prices have surged in recent years, but the central bank has slashed to a record low of -0.35 percent to fight fears of deflation.
The IMF has argued that Sweden ought to cool its housing market , as rising house prices and household prices threaten to derail economic growth in the country . " Housing prices are rising fast from elevated levels , resulting in households taking on higher debt rates and making the economy more vulnerable to shocks , " the IMF concluded in its annual report . The report suggested that Sweden should implement this change in the housing market by tightening mortgage repayment rules and introducing a limit on how much debt a household could take on and still be able to make payments .