Housing prices continue to soar

New figures have shown that the Swedish housing market remains buoyant with apartment prices continuing to rise all over the country.

Housing prices continue to soar

According to figures gathered by Mäklarstatistik, the cost of buying an apartment has risen by 23 percent over the last twelve months, while house prices have seen a nine percent increase.

The government’s promises to abolish wealth tax and replace residential property tax with a municipal charge are thought to have contributed to the rise.

“The result is lower running costs, which also has repercussions on the apartment market,” said Fastighetsbyrån’s CEO Per Johnler.

Apartment prices in central Stockholm have gone up by 18 percent over the last year and are showing no signs of slowing down.

“But nothing can keep climbing forever. We believe that the brakes will be applied slightly in 2008,” said Johnler.

A lack of new apartments in the big cities at a time of major economic growth has brought the need for construction into sharp relief.

“The cost of an apartment in Stockholm city centre is approaching 55,000 kronor ($8,000) per square metre,” said Johnler.

While there has been a general rise in income levels, this has not compensated for the house price increases.

“This makes it more difficult for first-time buyers,” said Swedbank’s Cecilia Hermansson.

“We are seeing a positive development in terms of incomes and the labour market, so I don’t foresee a dramatic drop in prices over the next year or so. But the speed at which prices are increasing will slow down,” she added.