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PROPERTY

Buying my first apartment in Sweden: How we won the bidding war

Learn Swedish. Get a personnummer. Go cashless. Moving to a new country means going through a series of 'firsts'. The Local's reader Alexander de Nerée writes about some of the challenges, quirks and adventures he has faced since moving to Sweden.

Buying my first apartment in Sweden: How we won the bidding war
Buying an apartment in Sweden comes with a whole new series of challenges. Photo: Tomas Oneborg/SvD/TT

Buying! That’s the only way to find an apartment in Stockholm. If I had a krona for every time someone told me that, I could have used it for a cash deposit. That is not to say the advice was wrong. Rather than even trying to find a permanent rental, we decided to extend the lease on the temporary apartment we were staying in and dive right in.

Soon it became clear there are different personality types when it comes to looking for places on Swedish real estate site Hemnet: I am the boring “what will we be able to afford” type as my husband turned out to be the more aspirational Hemnetter: “Oh, look how we could live if we had 12 million to spare!”

Beautifully lit photos of apartments, all staged with the same furniture and art, tell you only so much. So, for weeks on Sundays we found ourselves shuffling on wet socks through, admittedly often very charming apartments, the purchase of which we were apparently going to be deciding on based on a ten-minute viewing.

If that was not stressful enough, the bidding per SMS would start right after. I quickly found out that the apartment you were already decorating in your mind, could easily be sold for a million and a half more than the asking price which was about, well, a million and a half more than you were able to afford. Being outbid at an auction, I was assured, is a quintessential Swedish experience. Think of it as part of your integration.

You can therefore imagine the surprise when one Monday night, after some listless bidding on a place we liked but seemed way too nice for us to win, our latest bid was top of the list. Never mind that we only saw the apartment once and together with 70 others: What if we put the sofa there?

On Tuesday morning the bidding and nail biting continued but at 5pm the agent told us to be at his office in two hours: we had won the bidding war! That did not leave much time to inform the bank that promised us the financing nor to do a frantic and unsuccessful Google search for “standard Swedish real estate purchase contract”.

So here I was, the trained lawyer signing a multitude of papers in a language I did not understand, to purchase an apartment in a country I had moved to less than six months ago. Apparently relying entirely on the agent representing the seller, telling me not to worry because “all documents are standard” and at the same time trusting that the person at the bank – who I had never met – would come through with a mortgage.

Walking back home from the agent’s office in a bit of a daze, we were already planning how we could upgrade the bathroom and install a tiled fireplace to increase the value of the property we had bought just a minute ago. We were integrating fast.

Alexander de Nerée moved to Stockholm with his husband in October 2020. Signing-up to move to a country they had never been to, in the middle of a global pandemic, was definitely a first for the couple. One of many more to come. Alexander writes for The Local about his “firsts” in Sweden.

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PROPERTY

Why are one fifth of Swedish properties selling for below asking price?

Across Sweden, almost one in five properties sold below asking price in the first two weeks of June - almost as many as in summer 2020, just months after the outbreak of the Covid-19 pandemic.

Why are one fifth of Swedish properties selling for below asking price?

The downturn on the property market in Sweden is perhaps becoming more and more clear, with one in five properties selling under asking price in the beginning of June.

Rising interest rates from the Swedish central bank alongside high inflation is starting to make its mark on apartment and house sales. It’s not just affecting prices, but also leading to a larger number of sellers having to sell for lower than asking price.

Across Sweden, the percentage of sellers selling under asking price in the first two weeks of June amounted to 19.2 percent, according to statistics from property site Hemnet. This is almost as many as in summer 2020 (20.6 percent), when the market was affected by uncertainty over the Covid-19 pandemic.

“It’s a clear change,” Erik Holmberg, analyst at Hemnet, told TT newswire.

“The main factor is a market which is changing, and if we compare this to a year ago it’s a significant difference, where it’s become a buyer’s market.”

Record-high asking prices

Holmberg also said that in this type of situation, many who are looking to sell their home adopt a different strategy.

“We’ve seen record-high asking prices. Historically, it’s been the case that when the market becomes more cautious, there’s a tendency to put property on the market at a high asking price,” he said.

There are also clear regional differences. In inner-city Stockholm, where some of Sweden’s most expensive apartments per square metre are located, prices have dropped by almost exactly a fifth (20.1 percent). Last year prices in this area dropped by 4.7 percent, with a 12 percent drop in 2020 and a 9.9 percent drop in 2019.

Jakob Jakobssen, an estate agent at Widerlöv Stockholm, has almost 14 years’ experience in the property branch. He agreed that the situation has changed noticeably over the last six weeks.

“In general, I can say that buyers are more cautious and careful,” he told TT. “There’s a very low interest in advance viewings and very few properties are sold before viewing. Buyers want a more traditional viewing.”

Hard to match buyers with sellers

Another deciding factor is the fact that supply has increased drastically from the lower level seen around the beginning of the year until March. Now, the challenge is matching up buyers and sellers with each other.

“I’ve been an estate agent for a long time and been through downturns, like in autumn 2008 and in 2017, so I think I have the right tools to help buyers and sellers feel secure, but there are lots of newer colleagues in this branch who are having a hard time,” Jakobssen said.

“Maybe they started working when the market was on the up and they’re struggling to understand the situation the market is in right now.”

During the Covid-19 pandemic, different kinds of properties were affected in different ways, with larger apartments selling better than smaller ones. However, this time it’s affecting all properties equally.

“With the effects we have now such as rising index rates, rising inflation and drops on the stock market, it’s affecting all kinds of apartments, whereas during the pandemic, it was affecting different types of apartment in different ways,” he said.

“This is hitting the whole property market hard.”

However, Jakobssen believes the situation will be different after the summer.

“I think there’ll be more sales in August-September than there are now, but at a lower level. Sellers will have learnt by then that there’s been an effect on the market.”

 

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