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PRESENTED BY BUSINESS REGION ÖREBRO

Seven surprising things about Sweden’s secret startup hub

There’s no denying the importance of history to Örebro. After all, there’s a vast 13th century castle, surrounded by a moat dotted with water lilies, right in the middle of this self-confident, culturally fertile Swedish city.

Seven surprising things about Sweden’s secret startup hub
Photo: Creative House

But Örebro is neither preoccupied with the past, nor stuck in a fairytale world. Instead, the city is firmly focused on its future as it develops a growing reputation as a centre for innovation, education, and living well. Located in central Sweden, between Stockholm and Gothenburg, the city is attractive to new businesses and families alike.

Whether you’re already familiar with Örebro or you’ve never even heard of it, here are seven surprising things about this startup hub in the heart of Sweden.

Sweden's secret startup hub: find out more about living and working in Örebro

1. How creativity powers business

A pioneering spirit permeates Örebro’s business life. The city was a textiles powerhouse in the 19th and 20th centuries and it's still an economic force. Many local companies are focused on making an international impact, such as Moon Smart Focus, which uses AI to make life easier for professional film-makers.

The founding of Creative House, an innovation and business hub, placed Örebro firmly on the map as a startup city and creative meeting place. It’s a nursery for exciting new companies, such as Deligate (which helps food stores cut waste), Yobber (a video recruitment tool) and Transfer Galaxy (a money transfer service). Former H&M CEO Karl-Johan Persson is among the investors. 

Niclas Molinder, CEO of Creative House, has spoken of how he was inspired during a trip to New York to visit a startup community “on the 11th floor of this very plain building”. “When the lift opened, there was this ocean of creativity – and I thought this is what I want in Örebro,” he said. Now he has it – from an initial 15 companies, Creative House now boasts more than 100.

2. How the city breathes culture and sport

This is a place that takes its culture seriously. So seriously that Örebro is currently spending half a billion Swedish kronor (roughly €50m) on building an entire cultural district for the city. Just don’t go thinking that means there isn’t already a buzzing cultural scene. 

Örebro is also home to the Swedish Chamber Orchestra, is a fulcrum of Sweden’s hugely successful pop music industry, and hosts Scandinavia's largest biennial contemporary art event, OpenArt. This sees the city's streets, squares, restaurants, and shops taken over for 12 summer weeks by artists from all over the world.

Want an active lifestyle? Örebro is a great city to take part in any number of sports and activities. It’s renowned for its vibrant skateboarding community and regularly holds summer roller derbies as part of its City Sport Festival, which also features beach volleyball. 

Örebro is also a significant player in Swedish national sport, if you'd rather just be a spectator. Both the men's and women's football teams are in the top division, as well as the men's ice hockey team.

Photo: Business Region Örebro

3. The enviable connectivity 

Örebro’s claim to be the ‘Heart of Sweden’ is hard to argue against. The city lies about halfway between Stockholm and Gothenburg (with the capital a little quicker to reach by road) and about 70 percent of Sweden's population is within a radius of 300 km. 

The E20 motorway connection between Gothenburg and Stockholm runs directly through Örebro, as do cross-country railway lines. And the city isn’t just convenient for Sweden. From the nearby airport you can escape mid-winter by flying down to Tenerife in less than six hours, or, in the summer, to Croatia or several other European destinations. 

Find out more about the advantages you get with a move to Örebro

4. Just how close you are to nature

Of course, you might not want to fly anywhere – after all, Örebro, Sweden’s sixth largest city, is a gem. It’s also only a few minutes from vast nature reserves, such as Oset and Rynningeviken, where you find rich bird- and plant-life with picnic and barbecue areas. 

Photo: Getty Images

If you want to get active, you can enjoy the cycling or walking paths. The giant Lake Vänern – the largest lake in the European Union – is also only a short drive away.

Örebro's setting and its proximity to Stockholm and Gothenburg are among the many factors that give it a strong appeal for young families. Many are won over by the relaxed, almost vacation-like atmosphere: having a coffee in a terrace cafe — or eating at one of the city’s renowned restaurants — and then ambling between shops on the old cobbled streets are popular local pastimes.

5. The defiance of gender stereotypes

“We want more girls to try coding,” says Yasnia Deras Cruz, a systems science student and a co-founder of Koda-Yoga, one of Örebro’s most preogressive initiatives. As a newcomer to Örebro, Yasnia met yoga teacher Frida Wirsén, who studied sport management and media and communication at Örebro University, on a yoga course.

“Yasnia asked me what I thought about creating a meeting place where you combine yoga and coding. It felt like a great combination,” says Frida. “Yoga is a perfect way to have a work break, centre yourself and at the same time become more creative in your work.”

Last October Koda-Yoga had its first event – a day of yoga and coding for anyone over the age of 15 who identifies as female and wants to try programming and yoga. “The goal is to break the male dominance in the industry. We want girls to have a chance to learn something new, meet us as female role models, meet companies and create networks,” says Frida.

6. The young, forward-thinking university

The city may have a long history. But Örebro University reflects the freshness and zest that drives the city today – it was only formally established as Sweden’s 12th university in 1999. 

Örebro University now provides students with one of Sweden's most forward-thinking medical educations – more than 50 researchers focus on the use of artificial intelligence in medicine. Indeed, Örebro is third only to the world-famous Karolinska Institute and the University of Gothenburg in Sweden, when it comes to citations of its scientific publications. 

7. And not forgetting … the affordability!

So, surely this kind of idyllic, cultured, innovative and convenient city must be a little on the expensive side to live in, right? It’s not. To buy an apartment in Örebro city centre, or in the suburbs, costs a staggering 65 percent less than in Stockholm. Savings on rent can be nearly as large.

Eating out costs around 25 percent less than in the Swedish capital and the overall cost of living is more than 20 percent lower. Örebro is that rare combination of storied neighbourhoods and modern gusto – an up-and-coming city whose time has now come.

Want to know more about the life and career opportunities in Örebro? Find out more through Smart Move – a joint initiative between Business Region Örebro, Örebrokompaniet, the Chamber of Commerce Mälardalen and Örebro University.

 
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PROPERTY

EXPLAINED: Will Swedish housing prices plummet as interest rates rise?

The Swedish financial supervisory authority warned on Wednesday that rising interest rates could lead to house prices falling "quite sharply". How likely is it that this will happen?

EXPLAINED: Will Swedish housing prices plummet as interest rates rise?

What financial circumstances might make it difficult for borrowers to repay loans?

With an increase in the cost of living, including rising interest rates and rising electricity prices, there are plenty of circumstances that may make it difficult for borrowers – especially those holding large debts in relation to their income – to repay their mortgages.

Households with large debts are therefore more sensitive to an increase in interest rates, according to the Swedish financial supervisory authority, known in Swedish as Finansinspektionen (FI).

The agency published its annual Swedish Mortgage Market report on Wednesday.

“Large debts also mean a higher sensitivity if you were to suffer unemployment during an extensive recession,” said Henrik Braconier, the authority’s chief economist.

Other factors that could stretch borrowers’ finances include rising energy prices, higher food prices, and growing inflation.

“Apples, oranges, tomatoes have gone up by 30 percent,” said Américo Fernández, a household economist at SEB. “Wheat is coming from Ukraine and it’s getting harder and harder to get hold of.”

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Will homeowners become unable to repay their mortgage loans?

Not according to Fernández.

“One of the last things Swedish households will fail to make their payments on is their mortgage and their houses,” he said. “They would rather decrease their spending on vacations abroad, or restaurants.”

The FI report noted that most new mortgages include margins that allow for fluctuations in the borrower’s finances. This means that mortgage holders have a cushion that allows them to handle financial changes.

“Our stress test shows that they can handle increases in the interest rate and also loss of income,” said Magnus Karlsson, FI’s director of macroanalysis. “New mortgages have margins in them calculating discretionary income, and will be able to absorb increases in interest rates and loss of income.”

SEB foresees an interest rise of up to three percent over the next two years, Fernández said,an increase that can be absorbed by most households.

Both Fernández and Karlsson agreed that if homeowners have to cut back on spending, those cuts will not come from debt repayment, but from their disposable income – the money they might ordinarily spend on entertainment, eating out, or travelling.

So while household spending may have to change, financial stability is not at stake for most households.

What’s going on with the housing market?

Right now, a record number of mortgage-holders have loans that are worth more than 4.5 times their income. This year, more than 14 percent of new mortgagors took on such large loans, compared to 6.3 percent last year.

A “low interest rate, increase in housing prices, increase in disposable real income and a housing market that is not functioning well” are all factors in the large debts that homeowners have incurred today, Karlsson argued.

Fernández noted that there is an imbalance between the low supply of housing and the high demand for housing, which is in part responsible for the high housing prices we see today.

He said a decrease in price of a few percentage points would not be surprising: “We’re coming from two years of exaggerated prices.”

Will housing prices begin to decrease after two years of increasing prices?

Calculations for three different scenarios tested by FI show that housing prices will decrease, Karlsson said.

While the agency does not predict housing prices, its report shows that under three different scenarios – the first an increase in mortgage interest rate, the second an increase in energy prices, and the third a combination of the first two with a reversal to pre-pandemic housing preferences – prices will decrease.

The Local Sweden reported last year about increasing housing costs in Sweden, spurred on in part by a desire for bigger homes further away from urban areas during the COVID-19 pandemic.

Fernández called the two years of increasing housing costs “surprising.”

“10-12 percent two years in a row, that’s historical in these uncertain times,” he said, noting that prices were still increasing in figures for March this year.

What sorts of housing will see the largest price decrease?

The FI report also included various scenarios of how the price of different types of housing may fluctuate based on changes in the interest rate.

One scenario assumed a 1 percent increase in interest rates this year and a 0.5 percent increase next year, and predicted that while the price of apartments owned in a cooperative – called bostadsrätter – would fall only slightly, the price of detached houses would fall by 10 percent.

Another calculation that accounted for rising electricity prices and a decline in new housing purchases found that the price of bostadsrätter and detached houses risked falling by an average of 30 percent.

Is there a plan to let borrowers end their mortgage terms early?

“We believe it needs to be simpler and more inexpensive for households to repay their mortgages early,” FI Director General Erik Thedéen is quoted as saying in a press release published by the agency on Wednesday.

To that end, Thedéen said at a press conference that the agency had sent a request to the government to change the calculation model for how banks are compensated when mortgages are terminated early.

“When you terminate a loan agreement and the bank incurs costs, it must be reimbursed,” Thedéen said. “But at present the banks are overcompensated, that is what our calculations show. If the government follows our line and changes the model and follows our line, then the banks must simply adapt.”

When asked about the likelihood of this request being granted, FI recommended reaching out to the Ministry of Justice for comment.

What does this mean for foreigners in Sweden?

If you’re already a mortgage holder, then as Karlsson and Fernández assured, mortgage calculations include a cushion that allow for changes in your financial circumstances.

If homeownership is in your future, housing prices may begin to decrease in the near future, so it’s worth keeping an eye on your local real estate listings.

By Shandana Mufti

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