SHARE
COPY LINK
PRESENTED BY MALMÖ STAD

Why are so many young people moving to Malmö?

Malmö’s population is expected to rise to 500,000 within 30 years with young people anticipated to comprise much of that growth. The Local investigates how Sweden’s third-largest city is planning ahead for the swell in numbers.

Why are so many young people moving to Malmö?
Photo: Karolina Friberg/imagebank.sweden.se

For many locals in Malmö, the paradigm shift in the city’s identity occurred in 2002 when the iconic Kockums crane was sold to South Korea. The 138-metre crane, which was located in the harbour district, was a Malmö landmark and a throwback to the era of shipbuilding and heavy industry in the city. Indeed, grown men were said to have wept as the crane was shipped off to Asia. 

Two years earlier, the Öresund bridge was opened while construction on the Turning Torso commenced in 2001. Malmö was changing at the turn of the millennium but, paradoxically, the city’s birth rate was low. 

“In the early 2000s, there was an extremely low fertility rate all over Sweden; the lowest ever recorded. Nobody knows exactly why but the economy wasn't doing well and there was a trend of staying longer at university,” Karl McShane, senior advisor at the City of Malmö, tells The Local. 

Malmö reached 300,000 inhabitants by 2011 and in June 2019, the population stands at 341,000. While the refugee crisis of recent times had an understandable spike on the city’s numbers, that is only telling a portion of the story explains McShane. 

“Non-refugee immigration has increased. Even in peak years, refugee migration only made up one-third of all migration. Two thirds of the people moving to Malmö come from other municipalities in Sweden,” says McShane who compiles data population reports for the City of Malmö.

Click here to find out more about developments in Malmö

 

Photo: Karl McShane

Malmö’s population grew by 1.7 percent in 2018 with Stockholm (1.3 percent) and Gothenburg (1.4 percent) trailing in the wake of the southern city for growth in numbers.

More than 40 percent of all new apartments built in Skåne in the 2010s have been constructed in the city while more than 30 percent of all jobs in the southern region of Skåne are located in Malmö. And that share is increasing; more than half of all new jobs in 2017 in Skåne were in Malmö. Tech firms and startups – with young workforces – have been drawn to Malmö due to the city’s proximity to continental Europe and cheaper office rental rates compared to Stockholm. 

“The trends across the big three cities are the same. As long as there are more people coming in than leaving, the average age decreases, which has been the case for decades,” says McShane. 

He adds, “We are seeing a constant pattern of movement within Sweden but at an increased volume. Young people move to the cities to work and study and then between the age of 30 to 40 they move to the suburbs in Skåne. You see the same pattern in Stockholm and Gothenburg but Malmö has an even younger demographic than both of those cities.

“There is no clear explanation for how Malmö got so young compared to Stockholm and Gothenburg. It's a trend that we see in other cities but it is stronger here.” 

Indeed, the average age of Malmö residents has been decreasing since 1996. That is borne out by the statistics, which show that Malmö’s average age has decreased in spite of the fact that life expectancy has increased during the same period. In 2019, the average age of a man living in Malmö is 37.5 and a woman is 39.2. The national average is 40.3 for a man and 42.2 for a woman.  

Click here to find out more about developments in Malmö

Photo: Karl McShane

Housing remains a hot topic in Malmö with supply struggling to meet the demand of the growing population. The City of Malmö has estimated that 80,000 new apartments are required and, at present, 50,000 are mooted to be in the pipeline by 2047. 

In recent years, new apartment complexes have been built in the Triangeln areas of the city with continued expansion in Western Harbour. Going forward, the town’s planners have earmarked Hyllie, which is home to Malmö Arena, and Limhamn on the city’s coast to undergo substantial development for new housing. 

Not encroaching on Skåne’s famous flat green landscape has also been factored into the city’s plans. While there will be more housing in Hyllie, a huge new green space will also be built. 

A long-established factor that has made Malmö enticing to new arrivals is the city’s proximity to Copenhagen. The two cities could be set to get even closer if plans to extend the Copenhagen metro system come to fruition. 

Talks began in earnest in 2018 to construct a 22-kilometre tunnel underneath the Öresund to further link Sweden with Denmark. If approved, the first metro trains going from Malmö to Copenhagen could be running by 2035. 

“10,000 people commute across the bridge every day for work but that is nothing compared to what it could be. If the metro extension happens, it would be quicker and not conditional on weather plus there would be more frequent departures,” says McShane. 

In addition to strengthening ties to Copenhagen, the City of Malmö has ongoing workshops where the town’s planners are sketching out just what the city needs in the future in terms of schools, bike tracks, etc. 

“We are asking questions like how will people shop in 30 years time? How will we deal with pollution then? Doing what we are doing now is not an option,” concludes McShane. 

p.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 12.0px ‘Times New Roman’; color: #000000; -webkit-text-stroke: #000000}
p.p2 {margin: 0.0px 0.0px 0.0px 0.0px; font: 12.0px ‘Times New Roman’; color: #000000; -webkit-text-stroke: #000000; min-height: 15.0px}
p.p3 {margin: 0.0px 0.0px 0.0px 0.0px; font: 10.0px ‘Times New Roman’; color: #000000; -webkit-text-stroke: #000000}
span.s1 {font-kerning: none}

This article was produced by The Local Creative Studio and sponsored by Malmö stad.

For members

PROPERTY

Why buying property in Austria remains unaffordable for most

Buying a home in Austria is a dream for many international residents, but it remains out of reach for the average earner.

Why buying property in Austria remains unaffordable for most

Many people living in Austria dream of one day owning a home, but despite recent drops in property prices and interest rates, this dream is still out of reach for many average earners. 

In Austria, it is recommended to not spend more than 40 percent of a monthly income on debt repayment.

But new analysis by tariff comparison portal durchblicker.at reveals that even a double-income household would need to spend around 60 percent of their income to afford a 90m² new-build apartment in Vienna.

While the government has created initiatives to improve the affordability, with attractive housing packages, fee reductions and eliminations of certain fees, such as the “Grundbucheintragsgebühr” (land register entry fee) and “Pfandrechtseintragungsgebühr” (mortgage registration fee) for properties up to a certain value, their impact has been limited.

Furthermore, the governments initiatives often overlook the specific needs of lower-income households and may benefit those who are already financially stable, leaving the average earner still struggling to afford a home, according to Der Standard.

READ ALSO: ‘Haushaltsversicherung’ – How does Austria’s home insurance work?

High prices, rates and strict lending criteria

One of the biggest barriers to owning a home in Austria is simply the sky-high property prices. Over the years, property prices have increased, making it more difficult for people with an average income to afford a place of their own. Even with recent minor dips in prices, they still remain high.

Another factor making owning a home challenging is the increase in interest rates in recent years. As a result, both existing variable-rate loans and newly obtained fixed-rate loans have become more expensive. Analysts expect the European Central Bank to cut interest rates by around 0.5 percent in the near future, but according to durchblicker’s calculations, this would initially only create a little relief for loan takers, where instead of around 60 percent, 55 percent of monthly household net income would be needed for debt repayment.

Another issue preventing many from realising their dream to buy a home is the difficulty in obtaining a mortgage. Since July 2022, stricter rules have applied in Austria for the granting of property loans. Loan applicants must have a deposit worth at least 20 percent of the value of their property to be granted a loan, according to the financial online platform Finanz.at. This means that even applicants with higher incomes may struggle to get their dream financed. 

Furthermore, many loan takers with variable-rate loans, especially those recently obtained, are facing significant challenges. The variable interest rates have increased significantly since the initiation of these loans, resulting in higher monthly repayments, reported Der Standard.

Few people can afford their own home in Austria, especially in Vienna. Photo by Christian Lendl on Unsplash

Experts suggests fixed rate loans and cooperative housing models

Andreas Ederer, Head of Banking at durchblicker.at, recommends loan takers with variable-rate loans to change to fixed-rate loans. He suggests that fixed-rate loans have become more attractive as they are currently cheaper than variable-rate loans, reported Kurier

Unlike fixed-rate loans, which have a steady interest rate throughout the loan term, variable-rate loans can change over time in response to shifts in market conditions or the economy.

Experts also suggest alternative models for increasing affordability. One idea is to create more opportunities for cooperative ownership with mandatory purchase options. This could offer a more affordable option where costs such as maintenance and taxes are shared. According to Der Standard, cooperatives also often have access to loans with better terms.

READ NEXT: How can I move into affordable cooperative housing in Vienna?

SHOW COMMENTS