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Swedish flat prices more than double since 2000

TT/David Landes · 18 Jan 2011, 11:49

Published: 18 Jan 2011 10:39 GMT+01:00
Updated: 18 Jan 2011 11:49 GMT+01:00

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Prices for tenant-owner apartments (bostadsrätter) in Sweden have risen 153 percent since 2000, but prices dropped by an average of 4 percent across the country in December, fresh figures from the real estate statistics website Mäklarstatistik.

In central Malmö, flat prices fell by 7 percent, while prices dropped by 3 percent in central Stockholm.

However, apartment values in Gothenburg rose by 4 percent.

Prices for small houses and apartments in Sweden remained unchanged in the final quarter of 2010, while the trend for the year as a whole showed a continued price increase.

Despite the December price drop, Lars–Erik Nykvist, the CEO of estate agency Fastighetsbyrån, believes Swedish house prices will continue to climb during 2011.

"December is not a high sales month and isn't typical when it comes to overall sales trends," he told The Local.

Nykvist also saw little risk for a Swedish housing bubble.

"I don’t see any risk for a price bubble in the near term, since demand remains higher than supply," he said.

Part of the reason, Nykvist explained, is the structure of the Swedish housing market.

"From an international perspective, the Swedish housing market has very few properties which people buy as speculative investments," he said.

“In Sweden, people live in the properties they buy. When you buy a tenant-owner flat, for example, the tenant association rules are very clear that you should be living there rather than using it as an investment.”

In the last 10 years, the price of tenant-owner apartments nationwide has risen by 153 percent, while small houses have grown in value by a comparatively modest 72 percent.

In 2000, buyers had to pay 8,314 kronor per square metre ($115 per square foot) for a flat in Sweden. But by the end of 2010, Swedish apartment prices had risen to 21,057 kronor per square metre ($293 per square foot).

In Gothenburg, however, flat prices have more than tripled since 2000, from 5,862 to 18,618 kronor per square metre -- a rise of 218 percent, representing the largest increase in the country in the last 10 years.

Meanwhile, Malmö has seen the biggest jump in small house prices, which have gone up 131 percent in the last decade.

"Price trends have clearly been affected by extremely low interest rates in the last few years and so far the mortgage ceiling hasn't had a marked effect on prices," Peeter Pütsep, CEO of Svensk Fastighetsförmedling, said in a statement.

Story continues below…

While Pütsep expects Swedish housing prices to continue rising in 2011, he doesn't expect price increases on par with those of 2010, when tenant-owner apartment prices rose by 7 percent and small house prices rose by 3 percent.

According to Nyqvist the effects of the mortgage ceiling have been marginal at most. The new mortgage cap, which went into effect in October, limits the size of a mortgages to no more than 85 percent of a property's market value.

"It takes a long time for changes like the mortgage ceiling to have an effect," he said.

He added that one trend reported by agents following the introduction mortgage ceiling, however, has been an increase in demand for homes that aren't in need of renovation.

"With the ceiling, it becomes harder for people to then borrow more money to renovate a property. As a result, more people want to buy places where they can move in without having to make and major upgrades," said Nykvist.

TT/David Landes (news@thelocal.se)

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Your comments about this article

13:42 January 18, 2011 by jwlundgren
So, just HOW do you get an apartment in Sweden? When I take the point value on our local landlord website and divide it by days in a year, it looks like there is a ten year waiting list.
14:11 January 18, 2011 by stephaniesp
I live in Lund but I heard it's a nightmare. If you can afford the down payment, you're much better off just buying a place.
14:55 January 18, 2011 by Nemesis
This is beginning to sound more like Ireland five years ago, everyday.

Does no one Swedish see that?

@ stephaniesp

I live in quick commuting range of Lund. What would be a deposit for an apartment in Lund, bought my place outright.

Lund is a good place to live, but the prices are not justifiable, considering how cheap Kvälinge, Eslöv, Höör and Hässleholm on direct railway lines to it.

I like the social life in Lund. Better than Malmö anyday.
15:47 January 18, 2011 by conboy
The housing cost relative to the real value of the properties are ridiculous it is very close to what happened in Ireland and will end in tears. I remember the financial and housing crash of 91 to 95 here in Sweden the market is always wrong sooner or later!!!!
17:54 January 18, 2011 by PINGPONG
what happened in ireland lads ??
21:20 January 18, 2011 by Arturio
are also doubled the salaries?
01:33 January 19, 2011 by Larry Thrash
Look out below!
12:13 January 20, 2011 by Nemesis

Buy a newspaper such as the Financial times.
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