Alessandro Martinello
@alemartinello.com
Econ PhD from the University of Copenhagen. Ex-academia at Lund University, ex-policy at the Danish Central Bank, finally landed in the private sector and leading the data agenda at Realkredit Danmark. We have cookies!
www.alemartinello.com
www.alemartinello.com
I see your point. I believe my unstated assumption is that there are at least 2 submarkets, say “large/premium/old” and “small/mass”. Stock of “premium” is ~constant bc it primarily depends on location.
If so, and with the mechanism described above, wouldn’t you expect a divergence in prices?
If so, and with the mechanism described above, wouldn’t you expect a divergence in prices?
November 10, 2025 at 3:47 PM
I see your point. I believe my unstated assumption is that there are at least 2 submarkets, say “large/premium/old” and “small/mass”. Stock of “premium” is ~constant bc it primarily depends on location.
If so, and with the mechanism described above, wouldn’t you expect a divergence in prices?
If so, and with the mechanism described above, wouldn’t you expect a divergence in prices?
…in those segments, so the difference between the m2 price of larger dwellings closer to urban centers (preferred by working families) and smaller, cheaper homes or rentals (where old ppl used to move to free up illiquid wealth) exploded in recent years.
🇩🇰 Ref: rockwoolfonden.dk/udgivelser/d...
🇩🇰 Ref: rockwoolfonden.dk/udgivelser/d...
November 10, 2025 at 10:46 AM
…in those segments, so the difference between the m2 price of larger dwellings closer to urban centers (preferred by working families) and smaller, cheaper homes or rentals (where old ppl used to move to free up illiquid wealth) exploded in recent years.
🇩🇰 Ref: rockwoolfonden.dk/udgivelser/d...
🇩🇰 Ref: rockwoolfonden.dk/udgivelser/d...
Yeah, so I have admit I was not as detailed as in a paper ;) more precisely it is an issue of velocity. As elderly ppl can afford not to sell their (large) homes, these properties do not enter the market basically until they die. They will at some point, but right now the supply is squeezed…
November 10, 2025 at 10:46 AM
Yeah, so I have admit I was not as detailed as in a paper ;) more precisely it is an issue of velocity. As elderly ppl can afford not to sell their (large) homes, these properties do not enter the market basically until they die. They will at some point, but right now the supply is squeezed…
Sorry - *increasing* bond prices, and thus the market value of hhd’s debt 😅
So easy to mess up the signs….
So easy to mess up the signs….
November 10, 2025 at 9:12 AM
Sorry - *increasing* bond prices, and thus the market value of hhd’s debt 😅
So easy to mess up the signs….
So easy to mess up the signs….
… and the exploding market in CPH/FRB is unfortunately in line with other EU capitals.
Plus, a 40yo mortgage would (likely) be a hidden lump sum tax on ppl with mortgages by decreasing bond prices by a few bps. Effectively it’d be a bill of 20/30k p hhd. Not sure politicians have realized it yet…
Plus, a 40yo mortgage would (likely) be a hidden lump sum tax on ppl with mortgages by decreasing bond prices by a few bps. Effectively it’d be a bill of 20/30k p hhd. Not sure politicians have realized it yet…
November 10, 2025 at 9:08 AM
… and the exploding market in CPH/FRB is unfortunately in line with other EU capitals.
Plus, a 40yo mortgage would (likely) be a hidden lump sum tax on ppl with mortgages by decreasing bond prices by a few bps. Effectively it’d be a bill of 20/30k p hhd. Not sure politicians have realized it yet…
Plus, a 40yo mortgage would (likely) be a hidden lump sum tax on ppl with mortgages by decreasing bond prices by a few bps. Effectively it’d be a bill of 20/30k p hhd. Not sure politicians have realized it yet…
Well, while fair to highlight issues, I also believe the financing market in DK to be among the best in class.
The 30yo fixed interest mortgage is the best product (for consumers AND financial stability) I have ever seen. It’s not a coincidence that mortgage rates are relatively low here…
The 30yo fixed interest mortgage is the best product (for consumers AND financial stability) I have ever seen. It’s not a coincidence that mortgage rates are relatively low here…
November 10, 2025 at 9:08 AM
Well, while fair to highlight issues, I also believe the financing market in DK to be among the best in class.
The 30yo fixed interest mortgage is the best product (for consumers AND financial stability) I have ever seen. It’s not a coincidence that mortgage rates are relatively low here…
The 30yo fixed interest mortgage is the best product (for consumers AND financial stability) I have ever seen. It’s not a coincidence that mortgage rates are relatively low here…
I’d definitely say no.
Again, supply and demand. Mortgage innovations that makes owning a house easier risk increasing demand and decreasing supply.
And that’s bad for people without a house.
Again, supply and demand. Mortgage innovations that makes owning a house easier risk increasing demand and decreasing supply.
And that’s bad for people without a house.
November 9, 2025 at 9:27 PM
I’d definitely say no.
Again, supply and demand. Mortgage innovations that makes owning a house easier risk increasing demand and decreasing supply.
And that’s bad for people without a house.
Again, supply and demand. Mortgage innovations that makes owning a house easier risk increasing demand and decreasing supply.
And that’s bad for people without a house.
But - IS it good? From the individual point of view 👍. You can afford to stay in your house for life!
But that means that in DK the great majority of older owners now lives in large dwellings (four rooms or more), even after the age of 75.
Back to square one. Is that good for first time buyers?
But that means that in DK the great majority of older owners now lives in large dwellings (four rooms or more), even after the age of 75.
Back to square one. Is that good for first time buyers?
November 9, 2025 at 9:27 PM
But - IS it good? From the individual point of view 👍. You can afford to stay in your house for life!
But that means that in DK the great majority of older owners now lives in large dwellings (four rooms or more), even after the age of 75.
Back to square one. Is that good for first time buyers?
But that means that in DK the great majority of older owners now lives in large dwellings (four rooms or more), even after the age of 75.
Back to square one. Is that good for first time buyers?
So much so that in Danske Bank that’s directly part of our advisory recommendations for clients whose debt got small enough to be easily manageable.
And Realkredit Denmark we even offer 30y IO loans - one of the best products for people approaching retirement ever.
And Realkredit Denmark we even offer 30y IO loans - one of the best products for people approaching retirement ever.
November 9, 2025 at 9:27 PM
So much so that in Danske Bank that’s directly part of our advisory recommendations for clients whose debt got small enough to be easily manageable.
And Realkredit Denmark we even offer 30y IO loans - one of the best products for people approaching retirement ever.
And Realkredit Denmark we even offer 30y IO loans - one of the best products for people approaching retirement ever.
With IO loans, you can stop stashing away money which you won’t be able to get back into an illiquid asset, and put it somewhere else.
For example, in heavily incentivized pension schemes.
The interest payment you can deduct from your income. Once your debt gets small enough, it’s a no-brainer
For example, in heavily incentivized pension schemes.
The interest payment you can deduct from your income. Once your debt gets small enough, it’s a no-brainer
November 9, 2025 at 9:27 PM
With IO loans, you can stop stashing away money which you won’t be able to get back into an illiquid asset, and put it somewhere else.
For example, in heavily incentivized pension schemes.
The interest payment you can deduct from your income. Once your debt gets small enough, it’s a no-brainer
For example, in heavily incentivized pension schemes.
The interest payment you can deduct from your income. Once your debt gets small enough, it’s a no-brainer
For most people, their largest asset is their home. For most older people, that’s completely irrelevant. What good does it do to you to have a half-million$ home if you can’t put bread on the table?
You can’t eat bricks. Well, most of us can’t.
So you are forced to sell your home.
You can’t eat bricks. Well, most of us can’t.
So you are forced to sell your home.
November 9, 2025 at 9:27 PM
For most people, their largest asset is their home. For most older people, that’s completely irrelevant. What good does it do to you to have a half-million$ home if you can’t put bread on the table?
You can’t eat bricks. Well, most of us can’t.
So you are forced to sell your home.
You can’t eat bricks. Well, most of us can’t.
So you are forced to sell your home.
Enter the one group of people who undoubtedly benefited most from IO mortgages.
Boomers!
A great analysis by @henrikyde.bsky.social and coauthors shows that IO mortgages have financed billions in consumption by older home owners.
That makes total sense.
Boomers!
A great analysis by @henrikyde.bsky.social and coauthors shows that IO mortgages have financed billions in consumption by older home owners.
That makes total sense.
November 9, 2025 at 9:27 PM
Enter the one group of people who undoubtedly benefited most from IO mortgages.
Boomers!
A great analysis by @henrikyde.bsky.social and coauthors shows that IO mortgages have financed billions in consumption by older home owners.
That makes total sense.
Boomers!
A great analysis by @henrikyde.bsky.social and coauthors shows that IO mortgages have financed billions in consumption by older home owners.
That makes total sense.
The point is, that the most important discussion about such a measure should be about these types of effects. Who gains? Who loses?
Instead most critics have focused, not surprisingly, on an entirely wrong point.
Dying before paying off a mortgage is bad!
Well, that’s good, actually!
Instead most critics have focused, not surprisingly, on an entirely wrong point.
Dying before paying off a mortgage is bad!
Well, that’s good, actually!
November 9, 2025 at 9:27 PM
The point is, that the most important discussion about such a measure should be about these types of effects. Who gains? Who loses?
Instead most critics have focused, not surprisingly, on an entirely wrong point.
Dying before paying off a mortgage is bad!
Well, that’s good, actually!
Instead most critics have focused, not surprisingly, on an entirely wrong point.
Dying before paying off a mortgage is bad!
Well, that’s good, actually!
Did it help first-time buyers?
Mmmh… Nope. The debate is not quite settled, but much points to the mechanism above - in line with economic theory. It likely created a capital transfer to existing owners.
Claes Backman has a paper on this btw
claesbackman.github.io/Papers/DkHou...
Mmmh… Nope. The debate is not quite settled, but much points to the mechanism above - in line with economic theory. It likely created a capital transfer to existing owners.
Claes Backman has a paper on this btw
claesbackman.github.io/Papers/DkHou...
November 9, 2025 at 9:27 PM
Did it help first-time buyers?
Mmmh… Nope. The debate is not quite settled, but much points to the mechanism above - in line with economic theory. It likely created a capital transfer to existing owners.
Claes Backman has a paper on this btw
claesbackman.github.io/Papers/DkHou...
Mmmh… Nope. The debate is not quite settled, but much points to the mechanism above - in line with economic theory. It likely created a capital transfer to existing owners.
Claes Backman has a paper on this btw
claesbackman.github.io/Papers/DkHou...
Interest-only (IO) mortgages!
That is, (for a time), you do not pay down your debt. Amortization is frozen, you only pay interest on your debt.
Introduced in ‘03 (also to help first time buyers), they have been hugely popular. Today, one in two home financing solutions is at least partially IO
That is, (for a time), you do not pay down your debt. Amortization is frozen, you only pay interest on your debt.
Introduced in ‘03 (also to help first time buyers), they have been hugely popular. Today, one in two home financing solutions is at least partially IO
November 9, 2025 at 9:27 PM
Interest-only (IO) mortgages!
That is, (for a time), you do not pay down your debt. Amortization is frozen, you only pay interest on your debt.
Introduced in ‘03 (also to help first time buyers), they have been hugely popular. Today, one in two home financing solutions is at least partially IO
That is, (for a time), you do not pay down your debt. Amortization is frozen, you only pay interest on your debt.
Introduced in ‘03 (also to help first time buyers), they have been hugely popular. Today, one in two home financing solutions is at least partially IO
Let’s start with what the debate should be about. Longer mortgages will likely NOT help first-time buyers.
Supply&demand. Push demand, price rises. Price rises => capital gain to existing home owners. Who pays? First-time buyers.
We might have seen it in 🇩🇰 with another mortgage innovation...
Supply&demand. Push demand, price rises. Price rises => capital gain to existing home owners. Who pays? First-time buyers.
We might have seen it in 🇩🇰 with another mortgage innovation...
November 9, 2025 at 9:27 PM
Let’s start with what the debate should be about. Longer mortgages will likely NOT help first-time buyers.
Supply&demand. Push demand, price rises. Price rises => capital gain to existing home owners. Who pays? First-time buyers.
We might have seen it in 🇩🇰 with another mortgage innovation...
Supply&demand. Push demand, price rises. Price rises => capital gain to existing home owners. Who pays? First-time buyers.
We might have seen it in 🇩🇰 with another mortgage innovation...
Don’t you dare breaking my bubble
November 2, 2025 at 1:29 PM
Don’t you dare breaking my bubble
‘Twas a while back, but I *think* it was this project. Would have to retrace the heated conversation with my team members to be sure
November 2, 2025 at 12:44 PM
‘Twas a while back, but I *think* it was this project. Would have to retrace the heated conversation with my team members to be sure
😂 I was thinking of tagging him, but to be fair it was a different department.
But he, as a KU alumn I was not surprised that it was the CBS’r messing it up 😉
But he, as a KU alumn I was not surprised that it was the CBS’r messing it up 😉
November 2, 2025 at 11:50 AM
😂 I was thinking of tagging him, but to be fair it was a different department.
But he, as a KU alumn I was not surprised that it was the CBS’r messing it up 😉
But he, as a KU alumn I was not surprised that it was the CBS’r messing it up 😉
I am willing to bet that had he actually coded stuff efficiently, not only the resource consumption would have been a fraction, but the execution time would have also been order(s) of magnitude lower. Win-win. Researchers might not care about resource consumption, but time? Time is always scarce.
November 2, 2025 at 11:45 AM
I am willing to bet that had he actually coded stuff efficiently, not only the resource consumption would have been a fraction, but the execution time would have also been order(s) of magnitude lower. Win-win. Researchers might not care about resource consumption, but time? Time is always scarce.
1TB of RAM usage for Danmark Statistics data is outrageous. That is bad and inefficient code no matter what. It was likely a PhD student thinking himself smart in setting an alarm and starting a job in the morning so that the computer worked for him while he got up and went to work.
November 2, 2025 at 11:45 AM
1TB of RAM usage for Danmark Statistics data is outrageous. That is bad and inefficient code no matter what. It was likely a PhD student thinking himself smart in setting an alarm and starting a job in the morning so that the computer worked for him while he got up and went to work.