The recent advertised sale of two central Stockholm apartments for almost triple their original value has illustrated the sometimes significant gulf between the price paid for an apartment as part of a tenant-owner’s association, and their individual market value.
“It is a question of apples and oranges – you simply can not compare the markets, of which there are three. You can’t compare the square metre price of a whole building sold to a tenant-owner association with an individual apartment sold on the open market,” Joakim Larsson, chairperson of municipal housing firm Svenska Bostäder and Stockholm city councillor, told The Local on Wednesday.
Carin Jämtin, leader of the opposition Social Democrats in Stockholm, is among those arguing that the recent sales prove that the stock of municipal housing has been sold off by the centre-right majority on the cheap.
“We have previously expressed criticism that the valuations, especially in the inner-city give large discounts in relation to their market price. But these examples are some of the worst that we have seen,” Jämtin told the Svenska Dagbladet daily.
Larsson responded that the buildings are valued independently and are in fact sold at a market price, but a price that refers to the commercial residential property market in the area, and not the market served by estate agents selling individual homes.
Larsson also explained that the tenant’s legal right of possession guaranteed under Swedish law stipulates that if a municipal-owned property is to be sold it has to be offered to the existing tenants first. The second alternative, selling to a new landlord, would attract a lower price, he said.
“The third alternative – to eject the existing tenants and then sell off the apartments individually – would be extortion and nobody supports that alternative,” he said.
The city councillor told The Local that the sales of Stockholm municipal property have raised 17 billion kronor ($2.5 billion) during the mandate period, of which 10 billion has been earmarked for investment in run-down municipal housing stock.
“Everybody wins – the tenants can remain in their homes, the buildings get renovated, and money is generated to improve the stock of municipal housing that remains,” he said.
The first apartment to raise the recent ire of the critics is located on the prestigious lake-view boulevard of Norr Mälarstrand in the Kungsholmen area of central Stockholm.
The property, at Norr Mälarstrand 24, was sold by Svenska Bostäder to a tenant-owner association for the equivalent of 30,000 kronor per square metre.
A top floor 100 square metre apartment in the property was put on the market on March 1st, less than a month after the takeover of the property, and is sret to fetch an anticipated price of more than 10 million kronor – more than three times the amount the new owner paid for the home.
A second apartment in the building has now been put on the market with an asking price of 13.5 million, representing a 7.5 million kronor profit for the fortunate tenant-owner.
All of the residential space in the building is sold at the same square metre price, regardless of standard, size or location in the building. This means that those taking over more exclusive penthouse-style apartments pay the same for their homes as those with less desirable views or floor plans.
“The rents were previously on the same levels as suburban apartments – around 900 kronor per square metre per annum. Tenants are not going to be able to remain in their homes or find an offer attractive if their living costs more than double overnight,” Larsson told The Local.
The Local asked Joakim Larsson to comment on the critics who argue that the sales represent a theft of assets already owned by Stockholm residents.
“I don’t agree. The sales have generated large profits which are set to be re-invested. Had the opposition got to decide then there would have been no money generated to renovate the suburban housing estates,” Larsson argued.