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PROPERTY

Sweden is looking to plug its housing gap by converting offices and shops

The Swedish government is investigating how commercial real estate in the wake of the Covid-19 pandemic could be converted into housing, reports Reuters.

Sweden is looking to plug its housing gap by converting offices and shops
Image: Lena Lindell/Pixabay

During the pandemic, there has been a dramatic shift towards online shopping and remote working, meaning that in Sweden there are now too many empty shops and business, but not enough housing. 

Sweden currently has a chronic housing shortage, with around 140,000 homes needed.

Complicated rules make construction costs in Sweden among Europe’s highest. Mortgage tax relief, zero property tax and a highly regulated rental market have increased house prices and almost doubled household debt, bringing economic instability to many.

Converting commercial properties into residential ones could help take the pressure off the housing market. Sweden’s National Board of Housing, is currently looking over the country’s complex building regulations to find out how offices and shops may be converted into housing in the future.

“The corona pandemic has meant that more sectors are considering making distance and work-at-home solutions permanent, which may mean that there are properties that can instead be used for housing,” Deputy Finance Minister Per Bolund told Reuters.

Around a fifth of Sweden’s five million workers are more than likely to continue working from home even after the pandemic is over, according to a study by the European Institute for Behavioural Analysis and the universities of Gothenburg and Lund. This will give rise to many more empty offices and the need to downsize for many companies.

A similar situation has been happening with shops. “The pandemic has only accelerated the effect of e-commerce,” head of research at property advisers Pangea, Mikael Soderlundh, told Reuters. “It is going to be very hard for many physical shops going forward.”

Because of this, property firm Wallenstam is already looking into converting 10-20 shops into homes.

These new investigations are just one example of how countries are looking towards the future in order to build a better one, once the pandemic is over.

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SWISS ALPS

Why luxury Swiss mountain resorts are becoming ‘lifeless’

Properties are expensive — and getting even more so — in many parts of Switzerland. But the situation is especially dire in chic mountain resorts, where the cost of holiday apartments has soared substantially. This is having an impact on the local population.

Why luxury Swiss mountain resorts are becoming 'lifeless'

In the past several years, the already pricey holiday homes in the Swiss Alps have become 30 percent more expensive, according to a new UBS report analysing 140,000 properties in the mountain resorts of Switzerland, France, and Austria.

Swiss towns, however, are the most expensive of the lot, having taken nearly all the top spots in the ranking.

Verbier, in canton of Valais,  is in the first place — the price for a square metre of living space in this resort town now costs over 21,500 francs.

St. Moritz in Graubünden is a close second (21,200 francs for sq/m), followed by Zermatt (19, 900), Gstaad (19,700), and Andermatt (18,000).

By comparison, the per-square-metre price (in Swiss francs) in the most expensive ‘foreign’ resort — Kitzbühel, Austria — is 16,200, and in the highest-priced French resort, Courchevel, 13,500.

Mountain villages are certainly picturesque and offer many skiing and hiking opportunities for sports enthusiasts, but these are not the only reasons for the influx of well-heeled residents.

This trend took off during the Covid pandemic, when numerous city dwellers wanted to escape farther away into the ‘nature’ and be able to work from home.

What does this all mean?

Getting a top franc for their property is enticing to many homeowners, who can cash in and make a good profit.

And having affluent taxpayers move in boosts local economy, which means that everyone living in the community benefits at the end.
 
“This generally supports the municipal finances which, in turn, raises the scope for infrastructure investments and thus increases the attractiveness of a destination for second home owners,” UBS said in its report.

However,  like the proverbial double-edged sword, high property prices also have a negative side.

For instance, as the wealthy move in and prices go up, the lower and middle-class people who may have lived in these mountain communities for generations — running local shops, restaurants, ski lifts, and other essential businesses — can no longer afford to live there and are forced to move out.
 
While there are no official statistics  showing how many people move away from these resorts for financial reasons, anecdotal evidence indicates this phenomenon does exist. 

One of many such testimonies comes from Graubünden’s Engadin region. 

“Locals have sold historic Engadin houses to wealthy owners, who in turn converted them and used them as holiday homes, becoming popular retreats that are often empty in the off-season,” according to Anna Florin movement, which encourages villagers to withstand the pressure from the real estate agents to sell their properties.
 
 “Life in the village is therefore dwindling or disappearing completely.”

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