Swedes stuck with hot property
James Savage · 14 May 2004, 00:00
Published: 14 May 2004 00:00 GMT+02:00
The worry now is that interest rates will rise, and that prices will fall. But SEB’s Ylva Yngvesson had words of comfort for concerned property owners. She told Aftonbladet that rates might rise by "a couple of percentage points," but she thought people will be able to cope.
As if interest rates weren't enough to worry about, Tuesday's DN reported a story that will send a chill down the spine of any flat owner. A freeholders' association in Stockholm has gone bankrupt, meaning that the leaseholders' flats may now be worthless.
The problems for the residents of the flats in the Vasastan area of Stockholm began when they were still rental apartments. An ex-lawyer and convicted money launderer called Johan Petri bought the block, and promptly handed over the rental contracts on many of the flats to his friends and family, none of whom actually moved in.
What followed was a chain of complicated deals that involved some of the flats being sold for ten million crowns to an American company, and then bought back by Petri for nearly three times that amount. They were then sold on the open market, and the new owners were in for a nasty shock when they came to look at the accounts of the freeholders' association, which by that time had accumulated debts of 28 million crowns.
In order to keep their flats, the fifteen families have had to take out loans worth 15 million crowns.
Property expert Urban Wilman said he was shocked by the whole affair. "In the twenty years that I’ve been in the business, I’ve never seen anything like this," he said. "In my opinion this should be taken up by the police and prosecutors."
For now, the case is being dealt with by the civil court, which has summoned Johan Petri - who has recently moved to England - to bankruptcy proceedings. But apparently he's not interested.
"I can't make it at the moment," he told DN. "What I can say is that everything has been managed correctly and I haven't misled anyone. The bankruptcy application is incomprehensible - the building is worth much more than the debts."
Serious stuff - perhaps enough to make flat-owners think about going it alone with a nice yellow or red house.
But don't start packing your boxes just yet. According to Tuesday's Aftonbladet, the paint you coat your house in is now unlikely to protect it from mould or cracking.
The reason is that exterior paints no longer contain something called biocider, a substance which is jolly useful for preventing your house rotting away - but poisonous to the environment.
It seems you can save the world, or protect your own little corner of Sweden, but you can’t do both.