Read news from:
Austria
SHARE
COPY LINK
For members

RENTING

New record as Stockholm apartment waiting list grows to 810,000 people

More people are now queuing for a rental apartment in Stockholm than at any other point since records began.

Published: 12 September 2023 11:56 CEST
New record as Stockholm apartment waiting list grows to 810,000 people
Are you one of many waiting for an apartment in Stockholm? Photo: Christine Olsson/Scanpix

At the end of August, 810,000 people were registered in the Stockholm housing agency’s waiting list for rental apartments – the highest figure since the agency was founded in 1947, reports Swedish daily newspaper DN.

The queue passed the half million mark just six years ago, and this year it’s growing by more than 4,000 people every month, compared to more than 3,000 last year.

Part of the reason behind the rapid increase may be that rising interest rates are putting more and more people off buying an apartment rather than renting — or simply blocking them altogether from becoming homeowners. According to the housing agency, cheap apartments are especially popular.

Sweden’s tightly regulated rental market means that so-called “first-hand contracts” are rented out by local authorities or major companies rather than by small, private landlords. They have the benefit of being relatively cheap compared to other countries, so competition tends to be tough.

You generally get your hands on a first-hand rental by signing up for the council’s housing queue. Many Swedes sign up for these queues as soon as they turn 18, so for a lot of foreigners moving to Sweden as adults, getting a first-hand rental is usually a pipe dream, at least in the big cities.

Stockholm’s housing agency in August also rented out the highest number of apartments since 1947, with first-hand leases signed for 2,140 homes. The average wait for these was 9.1 years.

IN STATS:

The 810,000 figure doesn’t mean that all of those people are actively looking for an apartment. It is not uncommon to sign up for rental queues even if you’re not thinking of moving any time soon, in order to collect queue points and improve your chances of renting an apartment in the future.

A person may also in theory have been in the queue for their entire life, waiting until selling the family home after retirement to use their points to move into a smaller, low-rent apartment. So when figures say that an apartment went to a person with, say, 30 years’ worth of queue points, it doesn’t necessarily mean that that person had been waiting the past three decades for a home.

But even if individual figures are hard to interpret, the acute rental housing shortage in Stockholm is real and means that people generally do have to wait several years to get a first-hand lease.

The average queue time for an apartment in central Stockholm was just under 18 years in 2022, according to the housing agency, compared to less than six years in neighbouring municipalities such as Nykvarn, Södertälje, Sigtuna, Upplands Väsby, Upplands-bro and Österåker.

In August, the shortest waiting time was one month for a two-room apartment in Södertälje, southwest of Stockholm, and 36.8 years for an apartment for over-65s in Södermalm.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

MONEY

Why is Sweden one of the first countries to lower interest rates?

Sweden, along with Switzerland, is among the first countries to lower interest rates in Europe. Why is this?

Published: 10 May 2024 14:56 CEST
Why is Sweden one of the first countries to lower interest rates?

Sweden joined Switzerland, Czechia and Hungary in the small group of countries to lower their so-called policy rates earlier this week when the country’s central bank lowered the interest rate from 4 percent to 3.75.

There are natural explanations for this, according to financial experts.

“Sweden’s economy is more affected by interest rate hikes,” head economist at Nordea, Torbjörn Isaksson, told TT newswire.

Sweden’s GDP has shrunk four quarters in a row, putting Sweden at the bottom of the table when it comes to growth over the past year. Unemployment and bankruptcies have also gone up more than elsewhere.

READ ALSO:

Isaksson believes that that’s the main reason Sweden is lowering its policy rate before other central banks, although he predicts the European central bank is only weeks away from lowering its key interest rate.

Although inflation in Sweden has dropped, the country still has higher inflation than both Denmark and Finland – the main reason for cutting the rate in Sweden is the fact that households here are so much more sensitive to high interest rates.

“A high level of household debt and short term loans has meant that high interest rates have hit harder here than elsewhere,” Isaksson said.

“That’s why there’s a greater need to take our foot off the brakes slightly.”

Having said that, Sweden’s economy still has a strong foundation.. Swedish business remains competitive, salaries are set “responsibly”, and the country has strong state finances, Isaksson said.

“Lowering interest rates while remaining hawkish is the best way to go,” SEB head economist Robert Bergqvist said.

“The central bank is showing that they’re taking this first step, they’re ready to take further steps, but they want to keep expectations low.”

Bergqvist described the Swedish economy as being out in the open sea, exposed to strong waves.

“We have strong state finances which work as an airbag, but I think the central bank is happy it can show that it’s reacting to what’s happening in the Swedish economy,” he said.

“It would almost be professional misconduct to not lower the interest rate based on what’s happening with inflation, so it’s hard for the central bank to avoid doing so.”

SHOW COMMENTS