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Stockholm house prices place 12th in global study

Published: 20 Dec 2010 08:42 GMT+01:00

The study by the Global Property Guide shows that 17 of the 34 countries surveyed returned positive gains on house prices during the first nine months of the year, reported the Dagens industri daily.

Monaco is the most expensive city in the world in which to buy property, with an average square metre price of 407,000 kronor ($60,000).

London comes in second place on around 120,000 and Russia's capital Moscow comes in third alongside other high cost cities such as Paris, Singapore and Hong Kong with average prices in excess of 100,000 kronor.

Stockholm comes in 12th in a comparison of average 120 square metre-sized apartments across the cities, with current prices averaging 60,000 per square metres in central areas, according to Statistics Sweden (SCB).

According to the guide Latvia (Riga) was the faster climber among the countries considered in the third quarter, with year-on-year gains of 25 percent after a couple of tough years.

While prices have climbed the most in growth markets such as Singapore and Hong Kong, with double digit booms in Israel and Australia among others, the Nordic countries all showed stability returning small gains.

The Local reported last week that prices for apartments in Sweden had reached record highs in the last quarter.

Fuelled by housing shortages in the attractive areas of Sweden's major cities, prices have resumed their climb and estate agency Fastighetsbyrån dismissed talk of a housing bubble, with CEO Lars-Erik Nykvist arguing instead that as few bought homes for speculative purposes, the market is in balance.

According to Statistics Sweden, houses in Sweden have climbed in price by an average of 5 percent over the past 12 months, according to recently released figures.

TT/The Local/pvs (news@thelocal.se)

Your comments about this article

09:40 December 20, 2010 by Acero
Sorry to rain on the parade but this IS actually a housing bubble!! Why would they discount it when its helping to aid the economy and in turn helping the growth figures.

Exceptionally low Interest rates + High tax credits + the fact that people are effectively only renting from the bank because very few own their own house when its all come to an end.

One thing I do believe is that this system keeps prices high in an area that doesnt have a flood of foreign investment (i.e. its not paris, sydney or london at the end of the day) so the swedes have managed to maintain high prices and keeping it affordable (giving long lerm terms and good credits and interest rates)
11:26 December 20, 2010 by Rishonim
The housing market in Sweden is an illusionary one. For starters one can buy a home for 1M€ Euros in Sweden with zero down and simple pay the interest for the rest of your life while this is not the same in the rest of the world. In France you buy a home for 1M€ and you have in most cases come up with 10-20% and then pay the loan, preminum +interest.
11:52 December 20, 2010 by ontheball
This property inflation has to play out some time. Same with household debt. The economic measures put in place combined with an already artificially distorted housing market are only delaying the inevitable correction in overpriced property.
13:22 December 20, 2010 by saar
@Rishonim, where did you get the idea about zero down payment? Could you please show me? I'm curious. Do you own any property in Sweden?
14:36 December 20, 2010 by bjorkon
- Wealth tax got abolished -> wealth gets repatriated -> house prices go up

- Interest Rates Down -> loans get a whole lot cheaper -> house prices go up

- Interest only mortgages become the norm -> servicing a loan gets cheaper -> house prices go up (did the previous generation not bother to pay off their loans? .. thought not)

- Why pay tax when you can offset it against your mortgage -> house prices go up!

- Capital gains tax payable on your residential home when you sell? -> makes you reluctant to sell? -> house prices go up!

- CGT is useful source of income for government -> why cool the market? -> prices should really only go in one direction - up!

- Restrict housing market through limiting who can buy a flat/condo? -> why would that encourage supply of new accommodation? ->house prices go up!

.. is there a picture starting to emerge here? Acero and others here are right.
14:59 December 20, 2010 by Nemesis
@ Rishonim.

WRONG.
17:00 December 20, 2010 by Rishonim
@saar&Nemesis,

I own two properties in Sweden and I never had to put a penny down. The only thing I pay is the interest on the loans and never the premium..
18:17 December 20, 2010 by 123abcd1983
@Rishonim

when did you buy your apartments? A few years ago?

The bank policy is very strict now.

I have just bought my apartment in May, and the bank want me to pay at least 10% for the downpayment. And then I still have 10% for the top loan that with highere interest rate, and i have to pay the morgagate for the 10% top loan.

So in the end of the day I have to pay 20% at least in total for the cost of the apartment

I have discussed the interest rate with handelsbanken, Swedbank, SBAB, and SEB bank. And the deal I got is the best deal I could get.

The 0% interest rate is no longer there, but maybe a few years back.
18:22 December 20, 2010 by Nemesis
This definately is turning into a housing bubble. I have seen this before in London and Dublin.

@ Rishonim,

According to your statement you have not bought a property in Sweden in at least five years. New rules mean a person has to put up a deposit.

However I also never had to put a penny down or pay any interest. I bought mine cash.

My friends however all have to put down about 10% to 15% before getting a mortgage under new rules.
20:40 December 20, 2010 by americanska
Everyone give Nemi a hand....she if the first douche on this tread to try and claim they have loads of money.
22:00 December 20, 2010 by Rishonim
@123abcd1983 & Nemesis. You are right. I bought my properties in 2002 ;-)
02:22 December 21, 2010 by avatar
Nemesis, you are either very rich or very old (may be both) ;)
11:55 December 21, 2010 by steve_38
House prices are dirt cheap in Sweden in general and Stockholm is rather cheap. I think most places in the Uk are more expensive than Stockholm.

One of the great things about Sweden is how cheap houses are.
07:35 December 22, 2010 by mkvgtired
The only problem with this study is many major metro areas are left out of the study. If you look major metro areas like San Francisco, LA, and other major markets are not studied. San Fran surpassed Manhattan (NYC) levels for several years, and is still up there. The global property guide acknowledges that it left out several major metro areas on their website, but it does offer a somewhat skewed listing because of these omissions.
18:48 December 22, 2010 by planethero
great post bjorkon!
16:13 December 23, 2010 by fikatid
The bidding process of buying a house got to be changed. You can actually have your friends pretend to be buyers and bid up the price. If they win the bid, they can decline and the next high bidder will be next. I think this is absurd.
01:26 December 24, 2010 by Beavis
Survey is meaningless, only 34 countries? which 34? Random? In Dublin for example you would pay 5 times more than Stockholm minimum, even after the housing crash!
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