Fewer new housing starts in Sweden in 2008

New housing starts in Sweden dropped sharply in the first quarter of 2008.

According to numbers released on Monday by Statistics Sweden, construction began on 18 percent fewer homes in the first 3 months of 2008 than during the first quarter of 2007.

Building commenced on 5,500 units between January and March 2008. Of those, 2,700 were buildings consisting of one and two dwellings, and 2,800 were multi-household buildings.

“It was expected. Two important factors are the financial uncertainty and that subsidies for multi-household buildings are gone. One also notices a greater caution to lend money on the part of bankers. The sale of homes is also taking a little longer,” Lars Jagrén, chief economist with the Swedish Construction Federation (BI), said to the Dagens Nyheter (DN) newspaper.

But Jagrén noted that the industry was surprised by the large drop in the construction of one and two-household buildings.

“Now we have to analyze what is causing the drop in the building of smaller housing—whether financial uncertainty has also had an effect or if there is a shortage of buildable land,” he said to DN.

Properties in Sweden