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Collapse in Swedish residential construction

Residential construction collapsed by 45 percent during the first half of 2009, new figures from Statistics Sweden (SCB) show.

Published: 19 August 2009 10:59 CEST

Construction began on a total of 6,650 units during the six month period up to the end of June 2009, which can be compared to 12,089 in the corresponding period of last year.

House construction plummeted from 6,188 to 2,900, while apartment construction fell from 5,901 to 3,705.

The figures are the lowest since the crisis years of 1993-1994, according to Nilserik Sahlén at SCB.

“There are currently no indications of a turnaround, but nothing dramatic has happened. So this level will perhaps be maintained for some time,” he said.

For the whole of 2009 Sahlén expects construction starts to amount to a total of 12,000.

The number of construction starts in 2007 and 2008 – 28,097 and 21,400 respectively – was negatively affected by the phasing out of state subsidies for new construction in 2006.

The phase out led to many construction firms bringing forward projects resulting in an annual rate of 45,000 apartments for 2006, Sahlén said.

“But this should no longer have an impact. So we are now at levels seen after the financial crisis in the beginning of the 1990s,” he added.

“The dramatic decline in construction starts is due to caution among construction companies over where the economy is heading, but also due to continued financing problems,” Tobias Kaj at Swedish bank Handelsbanken said.

“Even if there is a strong market for existing housing, with active bidding and high demand, there is a significant difference within new construction. For construction companies to be able to begin new projects the buyer has to accept a price despite the fact that they won’t move in for up to 18 months,” Kaj said.

“But construction companies have experienced trouble securing financing from the banks. This has presumably improved somewhat in recent months but has been very tough during the first half of the year.”

The abrupt halt in construction starts paves the way for a residential housing shortage and higher house prices in the future according to Per Johnler, CEO of estate agent Fastighetsbyrån, which is part of the Swedbank concern.

“Now that the construction of new apartments has cooled off so dramatically, there will be consequences. Continued housing shortages and fewer new apartments will be a factor that will push prices up,” Johnler writes in a comment on SCB’s statistics.

“An excessively low level could even harm the broader economy in the longer term,” he continued.

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PROPERTY

How to ensure your French property is insured for storm damage

Storm Ciaran’s property-wrecking passage through France - with another storm forecast for the weekend - may have many people wondering how comprehensive their insurance cover is. 

Published: 3 November 2023 15:45 CET
How to ensure your French property is insured for storm damage

In the wake of Storm Ciaran, thousands of property owners in France are preparing insurance claims – with initial estimates of the bill for damage between €370 million and €480 million.

Home insurance is compulsory in France, whether you own the property you live in or you rent – and it must include some level of storm damage cover. 

Check also to see if your insurance provides cover in case of a declaration of a catastrophe naturelle.

The garantie tempête (storm guarantee) covers damage caused by violent winds. What constitutes a ‘violent wind’ varies from contract to contract, but there appears to be a widespread consensus of agreement on wind speeds over 100km/h.

In most insurance contracts, this covers damage caused by the storm and within the following 48 hours – so you’re covered if, for example, a tree weakened by the storm comes down within that period and damages your property.

Be aware that, while the storm guarantee automatically covers the main property, it generally only covers any secondary buildings and light constructions – such as a veranda, shed, solar panels, swimming pool or fence – if they are specifically mentioned in the contract. 

The same is true of any cars damaged by debris. A basic insurance contract might not include storm damage, so it is always worth checking.

Damage must be reported to your insurer as quickly as possible. The deadline for making declarations is usually five days after any damage is noticed. This is especially important for second home owners, who may not be at the property when the damage occurs. 

In some cases – such as in the aftermath of Storm Ciaran – insurers may extend the reporting period. But under normal circumstances, it’s five days after the damage has been discovered.

What happens next

To make a claim, the first thing to do is contact your insurer by phone or email. Your insurer will take you through the next steps, but usually you have to send in a declaration – which should include an estimate of any losses and for any repairs, with evidence where possible, such as photographs and any receipts for purchases. 

Your insurer may also request proof of wind intensity, which can be provided for example by a nearby weather station.

The insurance company may appoint an expert to come and assess the damage, so make sure to keep damaged property safe until they arrive, as well as all invoices for any urgent repair work. 

What if you’re a tenant?

If you rent your property, you must report any damage inside the accommodation to your insurer and also notify your landlord so that they can file their own claim. 

In the case of a co-propriete, you must declare damage inside the accommodation to your insurer, while the trustee sends his own declaration to the collective insurance (which sometimes covers the private areas) .

How long does it take for claims to be settled?

Payment of the compensation provided for by the “storm guarantee” depends your home insurance contract. After the insurer has estimated the amount of damage, compensation is generally paid between 10 and 30 days following receipt of the insured’s agreement.

What if we got flooded?

In the case of flooding, you may have to wait for a natural disaster order to be issued. 

Catastrophe naturelle

The ‘state of natural disaster’ is a special procedure that was set up in 1982 so victims of exceptional natural events, such as storms, heavy rain, mudslides and flooding, as well as drought, can be adequately compensated for damage to property.

The government evaluates each area and deems whether it qualifies for the status of catastrophe naturelle (natural disaster). 

Essentially once a zone is declared a natural disaster, victims can claim from a pot of funds created by all insurers. If the zone is not declared a disaster, insurance companies are under no obligation to pay out. 

Under a “state of natural disaster” residents are covered for all those goods and property that are directly damaged by the phenomenon, in this case storms.

It applies to residential or commercial buildings, furniture, vehicles and work equipment that are already covered by insurance policies.

Homes must be already covered by a multi-risk insurance policy for the status of natural disaster to count.

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