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PROPERTY

Sweden experiencing ‘worst property construction crisis since 1990s’

The rate at which new properties in Sweden are being built continues to fall, new figures from Statistics Sweden show.

Published: 25 May 2023 12:22 CEST
Sweden experiencing 'worst property construction crisis since 1990s'
Homes being built in Hagastaden, Stockholm. Photo: Anders Wiklund/TT

The new figures show that the level of new builds in Sweden is at the lowest level in ten years, dropping 50 percent in the first quarter of 2023 compared to the same period a year previously.

Anna Broman, an expert in property policy at the Swedish Construction Federation, Byggföretagen, has called for a crisis commission.

“We are in the worst crisis since the 1990s. Property building rates are going to drop by more than half in the space of two years,” she said.

In 2021, around 70,000 homes were built, with that number expected to drop to 25,000 this year, according to the Swedish Construction Federation.

The Swedish National Board of Housing, Building and Planning, known in Swedish as Boverket, is expecting around 30,000 properties to be built this year. At the same time, 180 of Sweden’s 290 municipalities said in this year’s property market questionnaire that their property markets as a whole are running at a loss.

“It’s very clear that we’re seeing the brakes being slammed on, both regarding the rate at which properties are being built and the sale of new builds,” Boverket property analyst Hans-Åke Palmgren told Swedish news agency TT.

“It could take a worryingly long time before we see the market recovering. The situation affects young people and the level we’re at is much lower than what’s needed.”

“We lost a whole generation of construction workers [in the 90s],” said Anna Broman from Byggföretagen. “We need to learn our lesson so that doesn’t happen again. If the downturn is allowed to go too far, it will take a very long time to get the labour back into the industry.”

This could also affect the green transition, Broman argued.

“Those most affected by this are young adults and other groups who need to get onto the property market. But this also affects all of our new industrialisation – the green transition – in Norrland. How can we get labour onto these sites if there aren’t any homes?”

Sweden’s property minister, Andreas Carlson, claimed that the worsening conditions to a great extent are related to outside factors.

“It’s due in large part to external factors related to rising interest rates, inflation and increased energy prices,” he told TT.

“Then we have structural issues too. These issues have been deprioritised for a long time.”

In the short term, he said, the government can help by lessening the impacts of inflation and the economic effects on Swedish households.

“In the longer term, we want to increase access to ground suitable for building, increase the motivation to build and increase the possibilities of home ownership. There is in general a wide level of agreement on what the issues are, and we have support in parliament for carrying out these measures,” he said.

There have been many proposals for encouraging the building of new property. Removing the amortisation requirement, investment support, free market rents and subsidised housing are some examples mentioned in debate.

Carlson does not believe the latter suggestion would be particularly effective.

“We believe expensive housing subsidies are ineffective and not the way forward. What we need is structural reform.”

Member comments

  1. This seems to be the case everywhere in Europe and not only in Sweden.
    The building industry here in France also sounded the alarm to the government.
    Real estate prices plummeting, new building reaching sky high prices….we live in cloud cuckoo land all over the continent.

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READER INSIGHTS

Five tips to get your hands on a first-hand rental apartment in Sweden

They're often high quality and cheaper than the market rate, but oh so hard to come by. The Local's readers share their best tips for how foreigners without years in the housing queue can rent a so-called first-hand apartment in Sweden.

Published: 19 September 2023 11:18 CEST
Five tips to get your hands on a first-hand rental apartment in Sweden

Sweden’s tightly-regulated rental market means that most newcomers end up moving from one sublet apartment (or “second-hand apartment” as it’s usually known in Sweden even among English-speakers, andrahandslägenhet) to the next every year or so.

In practice rents are often high and leases insecure, despite laws in theory preventing overpriced sublets.

First-hand rentals, on the other hand, tend to be better quality, more long-term and often remarkably cheap, making them an attractive but elusive option – unless you signed up for the public housing queue years, or even decades, ago it’s hard to snag one.

But not impossible. In a Facebook post, The Local’s readers shared their tips for how they managed to beat the competition and secure a first-hand rental.

Here are their best strategies:

1. Move out of the big cities

Many readers suggested avoiding Stockholm, Gothenburg and Malmö, where the housing shortage is particularly bad. Student cities like Uppsala and Lund also tend to be on that list, but many smaller or more rural municipalities have far shorter housing queues, sometimes none at all.

“I live in a 10,000 people city, 180 kilometres from Stockholm,” said Rodrigo.

Johanna said she’s moved from Stockholm to the countryside, adding she’s got “many friends living in more rural areas of Heby and Dalarna or way up north like Haparanda” where apartments come “dirt cheap”.

2. You don’t always have to move far

If you can put up with a longer commute, there are many municipalities within commuting distance of the big cities which have shorter housing queues and reasonable public transport connections.

“On any given day we have 100 different rental flats here in Eskilstuna – it’s literally one hour’s train ride to Stockholm,” said Jörgen.

3. Keep an eye out for exceptions

Some housing queues make exceptions from their standard housing queue for certain categories of apartments.

These vary depending on the municipality, but could include for example new builds. In Stockholm, there’s a special category called “bostadssnabben” which are apartments offered on a first-come, first-served basis, regardless of how many queue points the applicants have.

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Some municipalities also allow tenants to swap apartments internally, so you may be able to go for the low hanging fruit initially and then later find someone who wants to swap apartments with you.

4. Get in the queue anyway

It’s not uncommon for people to sign up for rental queues even if they’re not thinking of moving any time soon – many Swedes sign up as soon as they turn 18, and even many property owners stay in the queue – in order to collect queue points and improve their chances of renting in the future.

Not all municipalities charge a fee for a spot in the housing queue, either, so it may even be worth having a think about in which areas of Sweden you might conceivably want to live at some point in the future, and signing up for those queues on the off-chance that you end up moving there.

Far from everyone in the queue is active, and sometimes, all you need is a bit of luck.

“Be very active. Apply to as many as you can, as often as you can. Don’t be too selective about the area. I got one where the primary applicant had to have 70 percent of the income. Less competition,” said Marios, who got a 90 square metre apartment in a Stockholm suburb in three months.

5. Go private

The most common way of renting in Sweden is through the municipalities’ own housing agencies, and in some queues such as Stockholm, private landlords rent out their homes via these queues too.

But in some cities, there are private companies that rent out apartments outside of the housing queue, and they don’t always follow the same “queue point” procedure as the municipality. Some have their own housing queue, which may be shorter, and some use a lottery system, for example.

It makes it a bit more hit-or-miss whether you’ll be successful, as these queues don’t always have the same reliability and transparency as the municipal housing queues, but it’s still an option.

Bear in mind that there are degrees of dodginess when it comes to private rental companies, with some being just as good or better than municipal landlords and some being… not. Many people join the Swedish Tenants’ Association to get more information on tenants’ rights.

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