Boligsektoren og pengeinstitutternes aktivitet

Maj Baltzarsen & Anders Mostrup Gudmansen

Student thesis: Termpaper


The project is inspired by the magnitude of the current economic crisis. Focus is on the relationship between the financial system and the housing price bubble, and the thesis is that bank activity and housing prices are connected. The project starts with a description, about the explosion in lending that has accrued in Denmark since the millennium. The lending practice is discussed with a focus on the suffering banks. It is identified that those banks that are crumpling under the credit crunch, are the banks, which had financed most loans with short-term borrowing, the biggest growth in lending, and is exposed against big involvements and the construction market. The banks increased exposure is explained through liquidity, credit and solvency risk. Two main reasons to the failed loan strategies are identified; a return logic and a natural tendency to growth in financial enterprise. Second part of the project, indentifies the determinants for the house prices: both the fundamental factors and non-fundamentals including psychological aspects. The fundamental factors are analyzed in a short perspective, where the demand is the dominating factor because of the inelastic supply, and in the long run with a somewhat less inelastic supply. To identify the demand, two models are discussed. One is a user cost model used by Økonomi- og Erhvervsministeriet, the other is a yield model from Arbejderbevægelsens Erhversråd. The yield model can explain the total price increase, contrary to the user cost model, which can only explain about 90 % of the total increase after 2003. The difference between the models is identified as non-fundamental factors contribution to the housing prices. Those factors are identified as being partly explainable, by the introduction of new real estate loans with a period of interest only (with adjustable interest). Psychological aspects are used to explain how the uncertainty influence on the house prices. In markets with uncertainty actors do not act rationally, instead they act from the observation of how others act. This euphoria can move around society, like a social contagion, and lead to price inflation and asset bubbles. It is concluded that there exists a cyclic connection between the banks activity and the house prices. The risk of financial instability grows, if the housing market is not following underlying fundaments.

Educations, (Bachelor/Graduate Programme) Undergraduate or graduate
Publication date1 Jun 2009
SupervisorsJesper Jespersen


  • Finanskrise
  • Boligsektoren
  • Pengeinstitutterne