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Swedish property prices rose in May – here’s by how much

Housing prices in Sweden went up slightly in May, with the trend holding steady in the first part of June.

Published: 17 June 2020 08:44 CEST
Swedish property prices rose in May – here's by how much
The fact people are spending more time at home due to the pandemic could be a factor behind the rise. Photo: Ann-Sofi Rosenkvist/imagebank.sweden.se

According to analysis company Valueguard's index, the month of May saw a break in a slight downward trend. Nationwide, property prices rose by 2.2 percent month on month.

It was houses where the increase was most notable, with a 3 percent rise, while prices of apartments rose by an average of one percent. While prices are still on average lower than they were three months ago at the start of the outbreak, year-on-year prices for apartments have risen by 2.1 percent and houses by 6 percent, according to the Valueguard index.

There were also differences across Sweden's regions. The area around Malmö in southwestern Sweden saw the biggest change, with apartment prices rising by an average of 1.8 percent and houses by 3.5 percent.

“The Malmö region has coped well and the effect of the [coronavirus] pandemic is not as tangible as in other parts of the country, that has affected price development positively. Properties are also being sold noticeably faster now than during the same period last year,” Mattias Larsson, CEO of estate agent Bjurfors Malmö, said in a statement.

On a national level, the development for the first two weeks of June shows a continuation of the trend, with a rise of 1 percent in Stockholm and 0.8 percent in Gothenburg compared with May.

In fact, it's possible that for those whose income has remained stable, the coronavirus outbreak has actually been a cause of the rise.

“After the outbreak there are lots of people who have chosen to work from home,” said Sven-Erik Kristensen, CEO of Bjurfors Gothenburg in reference to national recommendations that everyone who can do so should work from home. “This has also put an extra focus on the housing situation and the need of a larger living space, which benefits the market for houses above all.”

However, many economists believe the negative effects of the crisis will be felt on the housing market later this year.

Handelsbanken has predicted a slow recovery for Sweden, and if unemployment rises to 15 percent (slightly higher than the worst case scenario outlined by the government in April), it said property prices could drop by as much as 20 percent.

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PROPERTY

INTERVIEW: ‘Most foreigners in Sweden don’t know they can get back excess rent’

In Sweden, people subletting apartments are not allowed to charge more in rent than they themselves pay. But foreign subtenants don't always know this. We asked Roland Sjölin, lawyer at the Swedish Tenants' Association, about how to get back excess rent.

Published: 18 April 2024 15:19 CEST
Updated: 21 April 2024 08:12 CEST
INTERVIEW: 'Most foreigners in Sweden don't know they can get back excess rent'

More and more of the people asking the Swedish Tenants’ Association, Hyresgästföreningen in Swedish, for help with excess rent are foreigners, Sjölin told The Local in an interview.

“The problem is that if you’re coming from another country, and you’re subletting an apartment, you’re probably not familiar with the rules in Sweden, because in other countries, it might be okay to overcharge your tenants.” 

He said that clients from India in particular seeking help from the association were now “very common”. 

“Many people come here to work as engineers in the IT sector and then have to rent somewhere,” he said, adding that as a group Indians appeared to be “very aware of their rights.”

Sweden’s rental sector is heavily regulated, with first hand contracts negotiated between landlords and the Tenants’ Association, and the rent that can be charged for second-hand contracts limited to only a small fraction above what the first-hand renter pays. 

“You’re not allowed to make any profit subletting an apartment in Sweden,” Sjölin explains. “You can only charge the subletting tenant the same rent as you [the first-hand tenant] are paying to your landlord, and then you can add the costs for internet and electricity, and perhaps a parking lot, if that is included.” 

Tenants’ Association lawyer Roland Sjölin. Photo: supplied.

You can also add a påslag or “markup”, if you are renting out the apartment fully furnished, but this cannot exceed more than 15 percent of the rent. 

That doesn’t mean that most landlords follow the law. The competition for rental apartments, especially in Stockholm, is so intense, that unscrupulous sublet landlords often try to get away with charging well over the legal amount, charging what is known in Sweden as ockerhyra, or “excess rent” and hoping that their tenants are too desperate to complain.  

What many foreigners do not realise is that even after the rental period is over, they can still get back any excess rent they have paid by applying to the Rental Board or Hyresnämnden, which functions like a court judging rental disputes. 

“If you have the evidence then it’s fairly easy,” Sjölin said. “I get a new case every second week on repayment of unfair rent, and I think that I win most of them.” 

“Nowadays, you can get paid back excess rent up to 24 months back in time, so people tend to get more money,” he added. “In some cases, they can get 200,000 kronor. In other cases, perhaps it’s only 30,000 kronor or 60,000 kronor. It depends on how long you have rented the apartment, and how excessive the rent you’ve been paying has been.”

The first step is to establish what would have been a fair rent, either by asking your landlord what they themselves pay directly or by checking with the Tenants’ Association.

“Because we negotiate most rents in Sweden, we normally know what the firsthand rent is,” Sjölin explained.

Then you need to collect together your evidence.

“It’s a good thing to have a written contract and also papers from your bank showing that you paid rent every month, and perhaps photographs of the apartment, so the rental board can get an idea of the apartment you were renting and what would be a fair rent, and also the termination for the contract so you can show the court how long you’ve been living in the apartment.” 

But Sjölin underlined that since Sweden has free burden of evidence, none of this is essential. 

“Even if you’ve been paying in cash, if you have witnesses who can testify what you were paying each month, you still have a chance of getting your money back. It’s a bit more tricky, but I’ve won two cases like that this year.” 

People in Sweden, he explained, tend to wait until the rental period is over before seeking to get paid back excess rent rather than challenging their landlord while they are still living in the apartment. 

“You don’t have any legal protection for your home for the first two years, so if you bring the matter up with the person you’re renting the apartment from you risk losing your contract and having to move out, so most people wait until they’re supposed to move anyway,” he said.

If you apply to the rental board for a refund close to the day you move out, you can then make your landlord pay back all excess rent paid in the 24 months leading up to the date you contacted the rental board.

If you are a member of the Tenants’ Association, you can contact them and ask for help with your application, but there are also specialist companies, like Orimlig Hyra AB who will buy your case off you and give you a refund within 48 hours, saving you a long wait in exchange for a cut of the money reclaimed. 

Sjölin said that the rental board normally took about 8 months to come to a judgement, but that if the person with the first hand contract appeals, that could extend the waiting time by between six months and a year.

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