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PROPERTY

‘The Local set this off’: Small Swedish town’s one krona plots go viral

When Götene, a quiet lakeside municipality in Western Sweden, launched a campaign in April to sell plots of land for one krona per square metre, they never could have guessed that they'd be fielding thousands of calls from across the world a few months later.

'The Local set this off': Small Swedish town's one krona plots go viral
Hällekis, where two of the one krona per square metre plots have already been sold. Photo: Götene Municipality

When The Local spoke to Götene’s mayor Johan Månsson on June 24th, the municipality was happy with the results of its campaign, selling three plots since April after receiving 20 expressions of interest. But as it turns out, that was just the beginning of a story Månsson described as “completely surrealistic”.

“We started in April and sold a few plots, then not much happened after that,” Månsson told The Local when we spoke to him again a week later. “We managed to sell two more just before all of this blew up.”

“All of this started last Monday, when SVT Väst [the Swedish public broadcaster’s western Sweden station] picked up the story,” Månsson said. “Then TT [the main Swedish newswire] picked it up, and Aftonbladet did a TikTok thing about it, which went viral nationally.”

Employees at Götene municipality could already see an “explosion” in the number of interested people after that, Månsson said, although up until this point it had only gone viral within Sweden.

Götene’s mayor Johan Månsson. Photo: Götene Municipality

‘Viral media snowball’

“After that came your article in The Local, which I think made this explode on a global level,” Månsson said.

“On Wednesday, we could see it spreading in Europe and then globally, set off a viral media snowball which rolled across the world, getting bigger and bigger by the day.”

“You could see it rolling over Europe, to Asia – mainly India and Pakistan, with it all culminating later in the week when CNN got in touch with me. I just spoke to The Washington Post yesterday, which has led to an interest from the USA, South America and Australia.”

“I think I can safely say we’ve reached all the corners of the earth by now.”

All the media attention has put Götene municipality into “crisis mode”, Månsson said, while describing the situation as “like winning the lottery”. There are only one or two people manning the phone lines, which have been ringing constantly for the past week.

“It’s impossible to handle, we’ve had to pause the campaign until August 7th so we can catch up with all the expressions of interest.”

‘I’m convinced there will be more than enough potential buyers’

It’s not entirely clear how many of the thousands of interested potential buyers will culminate in a sale, Månsson said, as buying property doesn’t give you the right to live in Sweden, so many buyers will need to find another way to stay in the country.

“It’s hard to see exactly what the situation will look like [after August 7th], but it would be very, very strange if we don’t break a new record in the number of plots sold. I’m convinced there will be more than enough potential buyers left over.”

The municipality itself is still open to selling the plots to anyone, whether they currently live in Sweden or not, but Månsson underlined the fact that buyers should make sure that their immigration documents are in order before committing to a plot.

“We can check that the house is being built – that’s our rule. Of course, you need to have the right to stay in Sweden, but that’s not our responsibility, that’s checked elsewhere. And we’ve had to explain that to a few people, of course.”

The municipality has also introduced a new rule, that anyone interested in buying a property needs to have a Swedish bank account, although this isn’t in order to limit the plots to people already living in Sweden, but rather to combat money laundering, Månsson said.

“Anyone from abroad who wants to come here, contribute and enrich our community is more than welcome.”

‘Every family is worth their weight in gold to us’

So, how much would it mean to Götene municipality if all 30 plots of land are sold to families who build homes and settle in the region?

“Every family is worth their weight in gold to us, and it would also make a huge difference to our tax income as such a small municipality,” Månsson said, while adding that schools in particular would benefit from more children in the area. 

“Every single person, every family is worth its weight in gold.”

The equivalent of ‘millions of kronor worth of marketing’

The media interest has also resulted in “millions of kronor worth of marketing” for Götene, Månsson said, with CNN describing the lakeside region as “idyllic” and “rural Sweden at its finest”.

“I’m not convinced that those of us working in the region or the people living here have really taken in what’s happening and what has happened,” he said. “I think it will take a while before we do. It’s fantastic.”

The municipality isn’t sure yet what the next steps for the campaign will be once sales reopen in August, although they’re in discussion about whether more plots could be included. 

“We’ll have to see what happens,” Månsson said. 

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MONEY

Why the Swedish krona is expected to strengthen in the year ahead

In the last decade, the Swedish krona has generally been weak against major currencies like the US dollar and the euro. However, some analysts believe it may strengthen in the coming year.

Why the Swedish krona is expected to strengthen in the year ahead

In recent months, the Swedish krona has faced significant fluctuations against major currencies.

On June 28th, the krona lost ground following a softer-than-expected interest rate policy statement from Sweden’s central bank, Sveriges Riksbank.

After a rate cut in May (the first one since 2016), the Riksbank recently also indicated that interest rates could be reduced three more times by the end of 2024.

This announcement led to immediate reactions in the currency market.

The euro-krona exchange rate increased to 11.33 from 11.29 (meaning that you now need 11.33 kronor to buy one euro), while the pound-to-krona exchange rate rose to 13.40 from 13.34.

Despite this, some analysts believe the Swedish krona is poised for a rebound in the year ahead.

The krona’s long downward trend

In a recent report, Rory Fennessy, a senior economist at the advisory firm Oxford Economics, pointed out that the Swedish krona appeared undervalued.

Despite its underlying strengths, such as consistent trade surpluses (where Sweden’s exports exceed its imports), high productivity, solid public finances, and a credible central bank, the krona has been on a long downward trend.

Identifying a single reason for this persistent weakness over the past decade is a challenging affair.

Negative interest rates, which the Riksbank implemented in the late 2010s to achieve its inflation target, are often mentioned as an important factor.

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However, this explanation mainly accounts for the weakness against the US dollar. Around the same time, the European Central Bank (ECB) also had negative rates, yet, as Fennessy pointed out, the krona still weakened against the euro.

More recently, the Riksbank’s response to the inflation surge since 2021 has further weakened the krona.

“We think the Riksbank was slow to respond to the recent inflation shock. As late as February 2022, the Riksbank signaled in its official forecast that the policy rate would stay at zero until 2025. But by this point, broad price pressures were gaining momentum in the economy,” Fennessy said.

“At the next policy meeting in April 2022, the Riksbank started the hiking cycle, contrary to its earlier guidance, and has been playing catch up since.”

The currency roller coaster and interest rate cuts

This year, the Swedish krona has experienced significant ups and downs against major currencies.

According to Oxford Economics, this volatility has been caused by a mix of global factors and domestic events in Sweden.

Without these factors, the krona would likely have been more stable. 

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While inflation in Sweden is near the Riksbank’s target, the high real interest rates are hurting economic activity.

Therefore, experts expect the Riksbank to continue cautiously lowering interest rates, using this as the main tool to manage the exchange rate.

A year of gains for the Swedish krona?

After a period of significant volatility, the Swedish krona is expected to gain support from decreasing domestic risks and positive external developments, according to Oxford Economics.

“The Nordic currencies have been highly volatile this year. The Swedish krona and Norwegian krone both depreciated sharply until May but have since regained much of their losses,” said Fennessy.

“We believe both the Swedish krona and Norwegian krone will appreciate gradually this year and over the medium term, but there may be bumps along the way due to external factors and unexpected data.”

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Earlier this year, the Swedish krona weakened due to stronger-than-expected US economic activity and inflation. This led to changes in interest rate expectations and negatively affected Nordic currencies.

However, recent US economic data has been weaker, and Nordic central banks have adopted stricter policies to protect their exchange rates.

According to Oxford Economics, coordinated interest rate easing across these regions should help reduce external pressures.

The road ahead

Since early May, the Swedish krona has strengthened by 4.5 percent against the euro, even though the Riksbank cut interest rates before the European Central Bank did.

At the same time, lower-than-expected US inflation and weaker economic activity have reduced expectations for interest rate hikes in the US.

These changes in global economic data and risk sentiment have been among the main drivers of the krona’s recent ups and downs.

According to the Oxford Economics report, the Riksbank has regained its credibility now that inflation is near its target, and the next challenge is for the bank to ease its monetary policy at a pace that supports the economy without causing too much volatility in the currency.

This balance is crucial for maintaining economic stability, Fennessy noted.

Looking ahead, the economic advisory firm expects that the krona will hold onto its recent gains and could appreciate by another 2 percent against the euro in 2025 – as long as there are no unexpected economic shocks.

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