EU warns of house prices

Sweden risks a disorderly housing market correction, warns the European Commission in its annual review of the Swedish economy, reports Reuters. The risk comes from persistent house price growth and that the policy implemented by Swedish authorities has not been sufficient.

The Commission wants to see housing tax reforms, steps to increase the rate of new housing construction and deregulation that leads to a more effective use of existing housing stocks. The Commission recommends gradually lowering the tax deductibility of mortgage interest payments.