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Swedish apartment construction takes off

TT/The Local · 13 Oct 2010, 15:37

Published: 13 Oct 2010 15:37 GMT+02:00

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“New production of tenant-owner apartments is back at the high-levels from 2005 to 2007, in particular in greater Gothenburg and greater Malmö,” said Hans-Åke Palmgren of the National Board of Housing, Building and Planning (Boverket) to the Dagens Industri (DI) financial daily.

Increased optimism about the economy combined with a current housing shortage in Sweden’s major cities are two contributing factors to the housing board’s decision.

The agency’s new forecast is set to be presented on Thursday.

The Swedish Construction Federation (Sveriges Byggindustrier – BI) also expects a boost in the building sector. According to a recent forecast by the organisation, the sector is set to expand due to a steep increase in renovation investments.

The Construction Federation figures reveal a roughly 40 percent increase in the number of apartments under construction compared to last year.

At the same time, the construction of offices and other facilities has slowed or remains stagnant.

The current recovery underway in the Swedish economy is in the process of petering out, according to the federation.

Overall construction investment is expected to increase 3 percent in 2010 and 5 percent in 2011, which will lead to an increase in employment in the construction sector of up to 20,000 by the start of 2011.

However, the head of the Byggnads construction workers union, Hans Tilly, doesn’t believe the signs of a full recovery in the construction sector are all that clear, at least not across the entire country.

“We haven’t really noticed all that much other than there are lots of positive reports of various sorts. But even if the residential sector recovers quickly, there was basically a complete stop in the autumn of 2008. And recovering from a low point like that takes time,” he told the TT news agency.

During the financial crisis, the construction of tenant-owner apartments (bostadsrätter) dropped, while the building of rental units continued.

But now tenant-owner apartment construction has taken off again, according to Johan Deremar, an economist with the Construction Federation.

“Building companies think it’s hard to make money on rental apartments, the figures often don’t add up. It’s much more attractive for companies to build tenant-owner apartments,” Deremar told TT.

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At the same time, construction firms believe they will need plenty of new recruits when the economy turns upward, in part because of a wave of retirements expected to take place in the coming years.

But the high number of people enrolled in construction training programmes is likely to protect against any labour shortages for firms.

“When it comes to tradesmen, we don’t see any shortage. On the other hand, there may be problems with foremen. Companies have a difficult time finding people who can lead work crews,” said Deremar.

TT/The Local (news@thelocal.se)

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Your comments about this article

16:16 October 13, 2010 by Nemesis
Ireland has a lot of foremen looking for jobs. Hire them.

Also there is a lot of unemployed Irish construction workers who need jobs. Hire them as well.
16:28 October 13, 2010 by Swedesmith
About damn time.
16:41 October 13, 2010 by tigger007
look most or all of them are for buying not renting! you can't ask a person between the ages of 19 to 23 years of age to buy an apartment! the average prices in göteborg for a 40 to 45sqm is about 1,000,000 to 1.300,000 krs(good areas).if i'm right they say next year they want people in sweden to put down 20% of the asking price.they have this reasoning that if we build more people will buy more and the people in rented apartments will move out their rented flats! WRONG! swedes like their controlled rent and so do i. if they are building 5 housing complexes atleast 2 of them should be for renting.
22:48 October 13, 2010 by Brucelee@stockholm.sweden
what the hack is "tenant-owner apartments"?,

As I know nowadays strange Swedish property system, you paid 1 or 2 million for an apartment but theoretically you are still renting it, the bloody HSB and mxxxxxxxfxxxxx bostarättsforening owns your apartment, is it Fxxxxxxxx ironic?
00:27 October 14, 2010 by rumcajs
I'm with tigger007. In most of european countries where I've lived one pays more than the half of the salary for a s**t hole. In Sweden u still manage to pay a third and to be honest .......... I REALLY LIKE IT THAT WAY.
07:47 October 14, 2010 by hilt_m
I seem to remember reading that they had changed the laws for newly built apartments.
09:15 October 14, 2010 by Nemesis
Regarding HSB apartments.

I am saving so that I can sell my HSB apartment and purchase a house.

HSB can be good sometimes, but other times they can be a nightmare. If you have a bad association living in a bostad can be a nightmare.

Regarding Swedes.

They like the whole Bostad-HSB thing for a reason. Once they get an apartment, they sublet it for way over a realistic market value, usually to immigrants who the local bostad rental company will not touch with a bargepole.

HSB used to be a good thing for helping the poorest onto the property ladder. Now it is a profit making machine designed to keep people poor.
17:11 October 15, 2010 by Danish Omer Zuberi
Why these bland block like appartments, why not castels, that match with the Eurpean architecture, not palaces, castels with inhouse services like restaurant, laundry, recreation, gym, library, and rooms. Sounds funny but maybe a professional could put the idea in better words.
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