• Sweden edition
 
Swedish realtors fear falling property prices

Swedish realtors fear falling property prices

Published: 12 Aug 2011 12:38 GMT+02:00
Updated: 12 Aug 2011 12:38 GMT+02:00

"It is going to be tough for vendors. All signs are pointing to a drop in prices,"said Henrik Rundgren, of real estate agent Notar, to Swedish daily Svenska Dagbladet (SvD)

The weekend of August 20th and 21st is often when more apartments and houses are shown than any other time, and this year looks to be no exception, with propective buyers back from their holidays.

However, indications suggest that this year could see falling prices and a good chance for buyers to negotiate price decreases.

Finance minister Anders Borg warned on Thursday that the government will need to revise down its strong economic growth expectations for 2012, due to the global financial market turbulence.

Just how much of a knock-on effect this will have on property prices remains to be seen.

"The recent turbulence makes it really hard to make predictions but we are hoping for a continuing stable market, with prices moving by just a couple of percent one way or the other,” Andreas Jonsson, senior analyst at Nordea, told The Local.

“On one hand the indications are that the lending rate could go up, which would have an effect, but the economy in Sweden is still holding up reasonably well and salaries are also rising, so one should counterbalance the other.”

Much will also depend on forecasts from the Riksbank, which will unveil its plans for interest rates on September 6th.

With supply said to be greater than normal at this time of year, it means the buyer is in a strong position, while for the seller it could be a tough weekend, according to experts.

There are still many apartments left unsold from May and early June that agents will now try to sell once again after the summer break, meaning that the increased supply is likely to create downward price pressure.

Latest statistics show that apartment prices fell by 4 percent in June and SEB's latest property price indicator shows that more people expect property prices to fall rather than rise.

Not everyone is predicting such gloom though.

“There are a lot of mind games, but as long as unemployment does not increase and interest rates don’t pull away, I do not think prices will be affected”, Michael Archer, mortgage manager at Nordea told SvD.

Geoff Mortimore (mortimore.geoff@gmail.com)

Your comments about this article

14:59 August 12, 2011 by Abe L
And the fact that getting a mortgage these days isn't all that simple either. Most banks require harsh down payments which for new buyers usually takes years (if not decades) to save up. Making a house acquisition more out of reach.
15:11 August 12, 2011 by canuk
the problem is this 15% down, it has always been that which has caused the decline in turnover of properties. people live month to month in sweden, having over 100,000 just sitting in the bank is not very common. unless you come from a rich family, you are not going to have the funds to buy something.
15:58 August 12, 2011 by Uggla
That and the fact that: Jobs = Money, No Jobs = No Money, No Money = No Buying!
16:20 August 12, 2011 by JLondon
@Canuk

I agree with you. People speculate the house prices, and gossip about more for your money compared to the UK and other nations , but as said, many people in sweden and around the world live on a day-to-day basis.
16:50 August 12, 2011 by psg2785
yes, 15% down payment can be seen as a problem, at the same time property price in Sweden is much lower than UK, France or other EU countries, while salaries tend to be better than in those countries, so if you think you have it bad here, well, it's much worse elsewhere... At least, here, a couple where both earn reasonably well can really think about saving hard for a few years to eventually buy something. That is a feasible plan.
17:17 August 12, 2011 by Great Scott
This is the moment, Borg has already played his get of jail card. Now with the financial crisis deepening, unemployment will continue to grow and house prices as well as the economy will collapse.

Borg will then put his hands up and say it wasn't may fault.

But wait there is very positive side to all this, once house price have collapsed, deposits will be a hell of a lot less, look and the bright side.

Sorry that's as long as you don't lose you job.
17:31 August 12, 2011 by Mib
In Sweden, you tend to pay interest only mortgages, which have virtually disappeared form the UK market.You have 30% mortgage tax relief and no "stamp duty which varies from 1% to 5% of the total price in the UK, depending on the price of the property.As mentioned previously, property prices tend to be much cheaper if you compare with the likes of the UK (rabbot hutches) and other major EU countries. Add to the fact, that Swedish people don't have to pay for University education, then you have an advantage over the UK.

But, just like our parents or grandparents before, we should not expect it to be a right to own our own property. The main problem in Sweden as in the major cities where the artificial rental rates have created massive waiting lists and a black market in 2nd hand properties. This in itself forces people to buy who can afford it, which pushes up prices. Again in our parents/grandparents day, they had to have a good deposit before the bank would lend them money to buy a property. Yet, some people think that they should not have to do that. Yet, that is the very attitude combined with greedy bankers that got us into this credit crunch which is still causing us problems 3 years later. So, a 15% deposit is in my mind the right way. When I wanted to buy my first property, I saved very hard for 2 years, worked overtime whenever it was available, massively restricted my spending for fun things. It was tough, but I did it! I know if I tried to do it now, it would take me longer, but I would have done it. I was brainwashed into not taking on massive debts.

The one major thing that has saved Swedish property prices from going even higher in the past is the Housing Associations rules to stop people from speculating by only allowing the owner to live in their apartment with a few exceptions ie. working way for a year. Add to that the rental price limits and there is no incentive to speculate on apartments. That alone has massively increased prices in the UK, Spain, Ireland etc.

So..in my opinion, you have it good in Sweden. If you're young and don't ave a job despite trying hard or due to lack of qualifications, either go back to education or do as the Irish do....emigrate to another country and try your luck. Better that sitting at home twiddling your thumbs or like a sizeable minority of English...rioting and looting :0)
23:08 August 12, 2011 by axiom
if the central bank keeps moving interest rates up the housing market will be strained.

the requirement to have 15% deposit in hard cash already puts a strain on people who simply join the long queues to rent at artifical rates.

If rental rates were more market based, more people would consider buying as an option keeping the housing sales vibrant.

the flipside of course is that this would drive up house prices even more and possibly create the other trend where those who can afford to, buy all the houses and rent them at artifically high rates.

the housing rentals need greater regulation and encourage people to get on the housing ladder while keeping the rental stocks for those who can't afford to buy or are just moving on their own, making for a vibrant housing market but one that is cooled by the stock of rental options available.

that said, housing prices in Sweden are not exceptionally high, but compared to the rest of the country Stockholm has some slack to loose, 5 - 10%.
Today's headlines
Society
Swede's necklace found after 52 years in lake
Ing-Marie Olofsson whose necklace was found. Photo: Private

Swede's necklace found after 52 years in lake

A 66-year-old Swedish woman got the surprise of her life when a fisherman returned the necklace she dropped in a lake at the age of 14. READ  

International
Apology for Swedish model's stolen photos
Malin Sahlén during a Top Model shoot. Photo: TV3/Nina Holma

Apology for Swedish model's stolen photos

A British newspaper has apologised after a freelance journalist stole a Sweden's Next Top Model contestant's photo and created a fake Twitter account used to trick a UK minister. READ  

Brand stories
Johanna N: beautiful jewellery with a story

Johanna N: beautiful jewellery with a story

Aged just 27 and already living off of her own designs, some may consider Johanna Nilsson lucky. But she doesn't believe in luck. She's the founder of a jewellery line blending sustainability, subtle style, and Scandinavian simplicity - and it's taking the world by storm. READ  

Sport
Heel injury sidelines Zlatan in Barcelona clash
Photo: AP

Heel injury sidelines Zlatan in Barcelona clash

Paris Saint-Germain star Zlatan Ibrahimovic will miss Tuesday's Champions League clash with Barcelona at the Parc des Princes due to a nagging heel problem, the French club have confirmed. READ  

National
Stockholm patient tests negative after Ebola fears
The Infection Clinic at the Karolinska University Hospital in Huddinge. Photo: TT

Stockholm patient tests negative after Ebola fears

A patient in a Stockholm hospital who was suspected of having contracted the Ebola virus was given the all clear on Tuesday morning. READ  

Elections 2014
New coalition agrees on defence and migration
A Jas Gripen. Photo: TT

New coalition agrees on defence and migration

UPDATED: The Green Party has committed itself to expanding Sweden's defence force, while the Social Democrats have compromised on work permits for migrants. READ  

National
Fresh Ebola case investigated in Sweden
The patient is being treated at the Karolinska University Hospital. Photo: TT

Fresh Ebola case investigated in Sweden

Doctors in Stockholm are checking a patient suspected of having contracted the Ebola virus. READ  

Elections 2014
Sweden Democrat wins Deputy Speaker spot
Björn Söder. Photo: TT

Sweden Democrat wins Deputy Speaker spot

Despite most Members of Parliament abstaining from voting, Sweden Democrat party secretary Björn Söder has been announced as one of Sweden's new Deputy Speakers. READ  

Music
The five best Swedish songs of the month
Swedish singer Tove Lo. Photo: TT

The five best Swedish songs of the month

The Local's resident music guru Paul Connolly is back with another selection of his favourite Swedish tracks. READ  

International
Swedish model in hiding after UK politician sting
Malin Sahlén during a Top Model shoot. Photo: TV3/Nina Holma

Swedish model in hiding after UK politician sting

A Swedish model whose photo was used in a British tabloid newspaper sting without her permission has described the incident as "something terrible". READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Lifestyle
The five best Swedish songs of the month
Gallery
People-watching: September 28th
National
When Italian style meets Swedish simplicity
Lifestyle
Review: Sweden's first alcohol-free nightclub
Gallery
In Pictures: The MS Estonia disaster
Blog updates

28 September

Spoiled Doyle (Blogweiser) »

"What you gotta watch out for in Sweden is the good stuff. http://www.youtube.com/watch?v=Re_EzUe6xpI In Sweden, it’s the good things you have to watch out for. Video on @TheLocalSweden http://t.co/rAb8eGFdTD pic.twitter.com/w37YYwMXy1 — Joel Sherwood (@joeldsherwood) September 29, 2014 " READ »

 

26 September

 (The Local Sweden) »

"Hi readers, Autumn swept into Sweden at the start of this week with snow in the north of the country and flooding in the south. As well as a change in the weather, Sweden’s change in political direction became clearer, with Social Democrat leader Stefan Lofven formally announcing his party would work with the Greens as..." READ »

 
 
 
National
Swedish scientists sneak Bob Dylan lyrics into articles
Lifestyle
Ten things expat women notice in Sweden
Politics
What's next on Sweden's political stage?
Gallery
Sweden's 2014 election: Most memorable moments
Society
What's on in Sweden
Gallery
People-watching: September 24th
Seaman Oliver Gee with his first lobster
Lifestyle
How to catch the first lobster of the year
Gallery
In Pictures: Fredrik Reinfeldt through the years.
Society
Plucked out of Canada for love and guitars
Gallery
Property of the week - Torslanda
Politics
How Sweden Democrats went mainstream
Politics
Scandinavia and Scotland: closer links?
Sponsored Article
How to start a business in Stockholm
Society
Why is Stockholm's Södermalm so cool?
Politics
Sweden elections: Who's who?
Sponsored Article
Introducing… Insurance in Stockholm
Gallery
Princess Estelle through the years
Business & Money
Five golden rules for the Swedish job hunt
Society
A closer look at Sweden's five official minority languages
Politics
Sweden elections: How do they work?
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

877
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se
If you want to drink, that’s your business.
If you want to stop, we can help.

Learn more about English-language Alcoholics Anonymous in Sweden. No dues. No fees. Confidentiality assured.
AA-EUROPE.ORG/SWEDEN