Read news from:
Austria
SHARE
COPY LINK

PROPERTY

Stockholm students hit by sky-high rents

Four out of ten of Sweden's most expensive student residences are found in Stockholm, where students have to cough up hefty wads of cash for a few square metres, a new national review has revealed.

Published: 19 August 2013 11:38 CEST
Stockholm students hit by sky-high rents

“You have to deprioritize some stuff. What's the point of kitchen towel paper when the loo roll is two metres away?” student Sofie Melander told the magazine Hem&Hyra (Home&Rent) about life in a student loft that measures 20 square metres in central Stockholm.

The towering monolith she calls home is among the closest you'll get to a skyskraper in Stockholm. The building once housed the Tax Agency (Skatteverket) and is universally known as Skatteskrapan (The Tax Skyscraper). It was converted to compact-living student flats five years ago.

SEE ALSO: Find your next home with The Local's Rentals Section

But the student housing costs more than a nickel and a dime. Melander's rent is 4,560 kronor ($700) a month, which covers neither electricity nor broadband.

Hem&Hyra magazine has drawn up a map of the priciest student housing in Sweden – four of them are in Stockholm. On average, across the capital, a student faces an annual bill of 2,000 kronor per square metre. Just 100 kilometres west of Stockholm, a student living in a studio faces a monthly bill that is a slim one quarter of the price in the capital's priciest digs.

The cheapest student studio was found in Kronoparken, in the student town Karlstad in central Sweden.

The top end of the list, however, was dominated by Stockholm, Solna, Borås and Helsingborg. In Helsingborg, two properties made the top ten: the Design hostel & apartment, and Haga studentbostäder. Two spots in Borås also qualified: Byttorpshörn and Ärlan. Strandparken in Halmstad and Centrum väster in Jönköping were also among the most expensive.

Stockholm's neighbouring municipality Solna, which Hem&Hyra has included as housing in the capital, made it onto the list with Kungshamra and Pax student housing, Stockholm itself had Skatteskrapan and Kattrumpstullen on the list.

In Stockholm's Skatteskrapan, Melander told Hem&Hyra that she had to top up her student grant and loan by working a day and a half a week to make enough to pay the rent.

SEE ALSO: Check out the latest home listings in The Local's Property Section

“I'm studying humanities, so it's OK, but if I was enrolled in a technical course at the Royal Institute of Technology (KTH), it would have been impossible.”

Per Dahlbeck, spokesman for the company that owns the building, said the students got a lot of bang for their buck – not only the central location on Stockholm's Södermalm island, but access to shops, a library and a gym under the same roof.

“It's a unique building at a fantastic location,” he said. “The pulse of the inner city and accessibility are two things that students are on the lookout for.”

The Local/at

Follow The Local on Twitter

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

PROPERTY

Why buying property in Austria remains unaffordable for most

Buying a home in Austria is a dream for many international residents, but it remains out of reach for the average earner.

Published: 7 May 2024 12:30 CEST
Why buying property in Austria remains unaffordable for most

Many people living in Austria dream of one day owning a home, but despite recent drops in property prices and interest rates, this dream is still out of reach for many average earners. 

In Austria, it is recommended to not spend more than 40 percent of a monthly income on debt repayment.

But new analysis by tariff comparison portal durchblicker.at reveals that even a double-income household would need to spend around 60 percent of their income to afford a 90m² new-build apartment in Vienna.

While the government has created initiatives to improve the affordability, with attractive housing packages, fee reductions and eliminations of certain fees, such as the “Grundbucheintragsgebühr” (land register entry fee) and “Pfandrechtseintragungsgebühr” (mortgage registration fee) for properties up to a certain value, their impact has been limited.

Furthermore, the governments initiatives often overlook the specific needs of lower-income households and may benefit those who are already financially stable, leaving the average earner still struggling to afford a home, according to Der Standard.

READ ALSO: ‘Haushaltsversicherung’ – How does Austria’s home insurance work?

High prices, rates and strict lending criteria

One of the biggest barriers to owning a home in Austria is simply the sky-high property prices. Over the years, property prices have increased, making it more difficult for people with an average income to afford a place of their own. Even with recent minor dips in prices, they still remain high.

Another factor making owning a home challenging is the increase in interest rates in recent years. As a result, both existing variable-rate loans and newly obtained fixed-rate loans have become more expensive. Analysts expect the European Central Bank to cut interest rates by around 0.5 percent in the near future, but according to durchblicker’s calculations, this would initially only create a little relief for loan takers, where instead of around 60 percent, 55 percent of monthly household net income would be needed for debt repayment.

Another issue preventing many from realising their dream to buy a home is the difficulty in obtaining a mortgage. Since July 2022, stricter rules have applied in Austria for the granting of property loans. Loan applicants must have a deposit worth at least 20 percent of the value of their property to be granted a loan, according to the financial online platform Finanz.at. This means that even applicants with higher incomes may struggle to get their dream financed. 

Furthermore, many loan takers with variable-rate loans, especially those recently obtained, are facing significant challenges. The variable interest rates have increased significantly since the initiation of these loans, resulting in higher monthly repayments, reported Der Standard.

Few people can afford their own home in Austria, especially in Vienna. Photo by Christian Lendl on Unsplash

Experts suggests fixed rate loans and cooperative housing models

Andreas Ederer, Head of Banking at durchblicker.at, recommends loan takers with variable-rate loans to change to fixed-rate loans. He suggests that fixed-rate loans have become more attractive as they are currently cheaper than variable-rate loans, reported Kurier. 

Unlike fixed-rate loans, which have a steady interest rate throughout the loan term, variable-rate loans can change over time in response to shifts in market conditions or the economy.

Experts also suggest alternative models for increasing affordability. One idea is to create more opportunities for cooperative ownership with mandatory purchase options. This could offer a more affordable option where costs such as maintenance and taxes are shared. According to Der Standard, cooperatives also often have access to loans with better terms.

READ NEXT: How can I move into affordable cooperative housing in Vienna?

SHOW COMMENTS