Swedes stuck with hot property

With talk of interest rate rises in the air, the papers have been getting agitated about the state of the property market. Aftonbladet reported that property prices in Sweden are higher than they have ever been. A place in central Stockholm will set you back a whopping 33,400 crowns per square metre, and prices in Gothenburg aren't far behind, according to Svenska Dagbladet.

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.

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Five tricks Swedes use to avoid the long wait for rental apartments

The official waiting time for apartments in Stockholm, Gothenburg, and Malmö varies between three and eleven years. But Swedes have their own tricks for jumping the queue.

Five tricks Swedes use to avoid the long wait for rental apartments

There’s no requirement for landlords or renters to use the queuing systems run by the municipalities in the big cities, but most of the big ones do, the intention being to reduce corruption and increase fairness in the rental market. 

The Stockholm Housing Agency, or bostadsförmedlingen, has a queue between seven and eleven years long. Boplats Gothenburg has an average wait of 6.4 years, and Boplats Syd in Malmö has an average waiting time of nearly three years.

According to Kristina Wahlgren, a journalist at Hem & Hyra, Sweden’s leading rental property magazine, the system puts foreigners and recent arrivals to Sweden at a significant disadvantage. 

“It’s extremely difficult if you are from another country. You don’t have any contacts, and it’s quite difficult to understand if you haven’t grown up in this culture,” she says of the system. “There are some quite subtle aspects, and there’s vänskapskorruption [giving special advantage to friends]. ” 

Listen to a discussion about Swedish queue systems on Sweden in Focus, The Local’s podcast. 

Click HERE to listen to Sweden in Focus on Apple Podcasts, Spotify or Google Podcasts.

Obviously, the biggest advantage faced by locals in Sweden is that they normally joined the queue the moment they turned 17, so by the time they’re looking for an apartment as a young adult, they’re already near the front. 

But even for new arrivals in Sweden, it’s possible to wait a much shorter time if you know the tricks, says Wahlgren, who has been nominated for Sweden’s Guldspaden journalism prize for an investigation into how Malmö finds housing for homeless people. 

Kristina Wahlgren, a reporter for the Hem & Hyra newspaper. Photo: Hem & Hyra

1.  Apply for more expensive new-build apartments to start off with 

If you’ve got a good enough salary, and are willing to pay high rent for your first few years in Sweden, this can make it easier to get an apartment, as there is less competition for more expensive, new-build apartments, Wahlgren says.

“If you’re willing to pay high rent, then you can get an apartment within a couple of months [in Malmö]. If you want a cheaper apartment, it can take years. So it’s quite a big difference.”

2. Rather than wait for your perfect apartment, take what’s available and then swap 

The rules recently got a little stricter, but it’s still relatively easy to swap between apartments once you have a first-hand contract. There’s even a website, Lägenhetsbyte, which acts as an interface. 

This means, if you use the method above, and decide to rent a more expensive new-build apartment with a shorter queue, you can then downgrade to a cheaper apartment with someone who is after somewhere newer and swankier.

Rental queues are also shorter in less desirable areas of Sweden’s cities. For example, the waiting list in Norra Hissingen in Gothenburg is only five years, half what it is in Majorna. It can be quicker to make do with living in a relatively dreary area, and then swap with somewhere better, than to insist from the start on an apartment in your dream location. 

“If you can’t wait for the right department, just take the one that you get, then you can keep on looking and when you do have a lease, you can change the lease with someone else,” Wahlgren says. 

To change apartment, you need to have a so-called “acceptable reason”, such as needing a bigger or smaller apartment. With any luck, your landlord should accept the swap. If they refuse you can challenge their decision at your local hyresnämnden or “rental tribunal”.  

3. Use the tricks for contacting landlords directly  

Landlords in Sweden are not required to use the municipal rental queues to find their tenants, and if a suitable tenant presents themselves just as an apartment becomes free, they may prefer to take someone they know.

This is particularly the case with the smaller, private landlords. It’s possible to find lists of private landlords online, such as here. But Wahlgren recommends putting in a bit of legwork.

“One way to find who owns an apartment block, is to just go around and check on the buildings for the names of the landlords, and look in the stairwells for the number of the landlord’s agent.” 

Once you have the number, you have to ring both regularly, at least once a month, and also strategically. 

“It’s important to call at the right time,” Wahlgren says. “Because normally apartment rentals end at the turn of the month, so that’s when you’re going to call. You don’t call on the 15th, you call on the 31st or the 1st of the month.”

4. Exploit all the friends and contacts that you have 

When someone hands in their notice on a rental agreement, they may try to shorten their notice by finding a replacement for the landlord, or they might find a replacement simply as a favour. This is why it’s important to ask your friends and work colleagues if they know of any apartments becoming free. 

“If they use the municipal queue, they have to follow the rules. This way, they can choose their own tenants,” Wahlgren says of the appeal of this to landlords. “If you’re a nice person, you might be able to just talk your way into an apartment.” 

5. Be a student 

“If you’re a student, there are special housing companies in the university cities, different foundations that rent out apartments,” Wahlgren says. But then you have to study.” 

Illegal ways of getting an apartment

All of these ways of getting a rental apartment are legal, but there are some ways of getting a rental apartment more quickly which are not.

1. Paying a fee

You may also find landlords or intermediaries on websites such as Blocket, who ask for a one-off payment to jump a rental queue, or get a rental apartment. This is illegal. “You can lose your money, you can lose the apartment, and in the worst case, you can go to prison,” warns Wahlgren.

2. Getting an illegal subtenancy 

It’s perfectly legal to rent out your rental apartment to someone else for a period, if you have a valid reason for doing so and your landlord agrees. But such is the pressure to get housing that a market has sprung up in illegal subletting. Before signing a contract for a sublet, make sure that the landlord who owns the property has agreed to it. 

3. Bribing someone running the queue 

There have been cases of people working for municipalities logging into the housing queue and altering it, either as a favour to their friends, or for money. This is fairly rare, and in the unlikely event that someone offers to do this for you, it’s best to decline.