World Economy

Scandinavia’s Richest Millennials in Trouble

Scandinavia’s Richest Millennials in TroubleScandinavia’s Richest Millennials in Trouble

Norway’s millennial generation spent the last decade hearing about six-figure incomes for jobs in the oil industry that offered some of the shortest work-weeks in the world. Now the slump in crude prices has brought the oil-reliant nation to a crossroads and those thirty-somethings who have taken on a lot of debt are now looking vulnerable, the central bank governor says.

The oil boom that spurred growth in Norway also pushed up house prices by more than 85% over the course of the past decade, according to Real Estate Norway. To cope with bidding wars, young buyers borrowed more and more to secure their dream home. That’s left them collectively with debt equivalent to 300 percent of disposable income, Bloomberg reported.

Not only is the generation more exposed than 70-year olds who have more time to repay their mortgages, but the debt burden of young adults has grown by a third since the early 1990s.

The bad news is, the oil boom is fading. The government keeps talking about a “new normal” where the petroleum industry can’t be the only growth engine. Central bank Governor Oeystein Olsen said last week income growth needs to fall in line with neighboring countries as the economy adjusts.

In the meantime, the millennials just have to hope that policy makers can stave off a property crash. A 30% drop in prices would leave a quarter of households with debt greater than the value of their homes, the central bank says.