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APARTMENT

Students compete to rent Sweden’s ‘smallest’ flat

As students in Lund get ready to compete for a chance to live in Sweden’s ‘coziest’ dwelling, the housing commission claim the bijoux cottages are simply ‘too small’.

Published: 24 January 2012 12:14 CET
Students compete to rent Sweden's 'smallest' flat

The detached apartment, or cottage, has been constructed by Lund’s building foundation, AF Bostäder (AFB), with student affordability as a priority.

“Students often just use their apartments to sleep in,” AFB’s CEO Rolf Svensson told The Local.

“They study in study dorms, have a social life outside of their homes, often can’t afford typical student housing… this is the perfect solution.”

The price of the bijoux dwellings are their main selling point, with the prospected cottages being rented for 2500 kronor ($370) a month, compared to the average newly built student apartment in Lund which is rented for 4167, yet three times the size.

“We have a catch-22 situation. There is a shortage of student housing and the housing board’s regulations result in high building costs, and therefore expensive apartments,” said Svensson in a statement.

Click here for a photo gallery of the apartment

“We want to get out of this by trying compact housing on a scientifically sound basis.”

The cottage features a kitchenette complete with dining area, a bathroom with toilet and shower and a sleeping loft. Student needs are not forgotten either – there’s a study desk below the sleeping area. There’s even an outside plot attached for those with green fingers.

Students interested in living in this experimental housing venture must be willing to earn their keep, however.

“The tenant must have social talents, and be ready to blog regularly about their lives in the flats,” AFB said in a statement.

“We received a 3 year permission from the municipality for this dwelling,” Svensson told The Local. “But we hope to prove that it’s not only liveable but also a great new idea.”

AFB requested permission to build 60 to 100 similar-sized apartments between 10 and 12 square metres. The request was rejected by the housing commission, due to ‘not following Sweden’s very strict building rules’ (according to Svensson), and not having adequate disabled access. An appeal has been made.

For students interested in competing for the cottage, the first home showings will be on Friday. The student who can best justify why they deserve the apartment will win the chance to live there.

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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.

Published: 7 May 2024 12:30 CEST
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?

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