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PROPERTY

For sale: New record as flood of apartments hits the market in Sweden

A flood of new homes are being listed as up for sale in Sweden as sellers and buyers eagerly hope for an imminent interest rate cut.

Published: 6 May 2024 06:55 CEST
Updated: 6 May 2024 10:17 CEST
an apartment listed for sale in Sweden
Sweden's central bank is expected to lower the interest rate this month or next. Photo: Janerik Henriksson/TT

A record number of apartments were available on Sweden’s main property listings site last month.

A total of 32,233 apartments were listed for sale on Hemnet in April, 40 percent more than the same month last year and the highest number ever for a single month. A lot of these ads are however for upcoming sales rather than apartments that are already up for public viewings.

“The high supply is an effect of a long period of a sluggish market rather than a risk factor for new price drops. This spring we’ve been seeing both rising prices and more activity. Especially as a result of the fact that we appear to be at peak interest rate and that the first interest cut is drawing near,” writes Hemnet market analyst Erik Holmberg in a comment quoted by Swedish news agency TT.

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The previous record month was October 2023, when a total of 31,985 ads were posted on Hemnet.

The Local has previously reported that Swedish property prices are also on the rise as the market kicks into action.

A major reason behind the flood of apartments for sale is the expectation that Sweden’s central bank, the Riksbank, will soon slash the country’s main interest rate. While this is expected to bump up prices, it is on the other hand also likely to lead to lower mortgage rates.

EXPLAINED:

The Riksbank will announce its next decision on Wednesday.

This is a crucial announcement as the so-called policy rate is the bank’s main monetary policy tool. It decides which rates Swedish banks can deposit in and borrow money from the Riksbank, which in turn affects the banks’ own interest rates on savings, loans and mortgages. 

Sweden’s policy rate is relatively high at the moment, 4.0 percent (the highest since 2008), because of the Riksbank trying to bring down inflation. If bank interest rates are high, it’s expensive to borrow money, which means people spend less and as a result inflation drops.

But now that inflation is on its way down, Riksbank chiefs themselves have said that they think it’s likely that they will cut the policy rate in either May or June, and several economists predict that the cut is going to come sooner rather than later, which would mean this week.

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ECONOMY

What Taylor Swift’s Stockholm gigs tell us about the Swedish economy

Taylor Swift's visit to Stockholm is expected to boost the capital's economy with international fans grabbing a 'bargain' thanks to the low Swedish krona, despite the fact that hotel rooms are almost 300 percent more expensive than normal.

Published: 17 May 2024 15:17 CEST
Updated: 18 May 2024 08:35 CEST
What Taylor Swift's Stockholm gigs tell us about the Swedish economy

The weak Swedish currency, the krona, means tickets for Swift’s three Stockholm dates are more affordable than elsewhere for many foreigners.

Fans around the world seem to have heeded Swift’s lyric “Grab your passport and my hand”, with “Swifties” from 130 countries flocking to Stockholm. Many queued through the night outside the Stockholm arena before the US star’s first concert on Friday.

“In total we will see approximately 150,000 people attending the concerts in Stockholm. Of them, 120,000 will be traveling to Stockholm,” Stockholm Chamber of Commerce chief economist Carl Bergkvist told AFP.

“They will be spending approximately half a billion Swedish kronor ($46 million) during their stay here in Stockholm,” he said.

That is money dished out on hotels, meals, shopping and transport, among other things, but not concert tickets or flights, Bergkvist said.

After opening her European tour in Paris last weekend, Swift’s Stockholm shows are her only dates in the Nordic region.

The Visit Stockholm tourism agency was also in on the hype, with its webpage on Friday proudly declaring “Welcome to Swiftholm”.

But last-minute tourists will struggle to find a hotel room in the city.

“We have approximately 40,000 rooms in Stockholm – 80,000 beds – and 120,000 people coming here. So we will be out of hotel rooms and we see a price spike of approximately 295 percent,” Bergkvist said.

“As soon as these three concerts were announced, there was immediately a surge in demand,” Åsa Lilja, commercial director at hotel chain Ligula Hospitality Group, told AFP.

“This also led to a rise in prices,” she said.

Swift-flation?

Sweden has only recently managed to bring down recent years’ stubbornly high inflation.

Economists have expressed fears that the Swift craze could send Swedish consumer prices rising again, as they did when pop diva Beyoncé opened her European tour in Stockholm last May.

“There’s a risk that prices will rise for hotel and restaurant visits, the concert tickets and everything that goes along with” the show, Danske Bank economist Michael Grahn wrote in a note.

However, “the price pressure would have to be even stronger than (the Beyoncé effect in May) last year to be reflected in the inflation figures”.

Swedish central bank governor Erik Thedeen even took the influx of foreign Swifties as a sign that the Swedish “krona was fundamentally undervalued”.

“It’s clearly a bargain to come to Stockholm,” he said.

Meanwhile, fans seemed ready to spend whatever it takes to see Swift perform.

“I spent around 7,500 kronor ($697) in total for three tickets. I think it’s worth it,” said Filippa, a 21-year-old Swedish fan queuing up early Friday for the evening’s concert.

 
 
 
 
 
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