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APARTMENT

Stockholm enlists Ikea to ease housing crunch

A hotly debated, semi-industrial neighbourhood just south of central Stockholm is set for a major overhaul, with city hall enlisting the help of Swedish furniture giant Ikea.

Stockholm enlists Ikea to ease housing crunch

The mayor of Stockholm, Sten Nordin, announced the move on Tuesday, saying a tie-up with Ikea and its housing wing Ikano Bostad could create more than one thousand jobs, as well as more than 550 much-needed apartments in a city that attracts 10,000 new residents a year.

The development also aims to transform a disparate area fringed by thorough-fares and stretching into the verdant southern suburb of Enskede.

“There are really five quite different neighbourhoods that we are trying to tie together,” Söderstaden (‘Southern City’) project manager Gerd Comstedt told The Local.

The Ikea-developed housing will be tucked into the southern corner of the new neighbourhood, up against the imposing facade of the soon-to-be-finished Tele2 Arena.

Today, the surrounding area is a concrete maze of overpasses, major roads, parking garages, and a shopping mall.

The wide public walkways are all but abandoned at night if there isn’t a hockey game drawing in rowdy crowds to the Hovet sports hall or international stars like Jay Z or Swedish House Mafia filling up the Globe Arena, a Stockholm landmark resembling a golf ball dropped by a giant on the southern fringe of the city.

“We want people to get off the train at Globen even when they are not going to a specific event,” said Comstedt when explaining plans to invite new restaurants, shops and bars to the area to coincide with the building of new homes.

For Ikea, part of the project’s allure is the prospect of adding a third Stockholm warehouse to two existing suburban ones, while the city’s politicians have long looked to revamp the area in a bid to ease Stockholm’s desperate housing crunch.

At present, the wider area sits at an odd crossroads between the city and the suburbs.

“We want to tie it in with Skanstull and move the city southwards,” Comstedt said, referring to the neighbourhood on the southern edge of Södermalm island.

See images from the area as it stands and a mock-up of the new neighbourhood.

A few minutes north of the proposed development, residents increasingly complain about the Gullmarsplan square being overrun by alcoholics and petty criminals.

“The focus on Gullmarsplan will be to add office spaces. Stockholm has a geographical imbalance when it comes to business, with many people commuting to the northern areas to work,” Comstedt said.

Gullmarsplan is where the Nynäsvägen road, the metro’s green line, and the Tvärbanan tramway intersect.

“Gullmarsplan is a commuter network nexus and in the long-term we want it to become even more important,” Comstedt explained.

Just to the south, the Slakthusområdet area of food warehouses and industrial-scale butchers has long enticed developers who view it as a potential equivalent to Manhattan’s refashioned upscale Meatpacking District.

At present, it offers an odd mix of businesses and organizations. Sweden’s deaf association sits next to an exotic pets and reptile shop, while a few letters of the iconic Slakthusområdet neon sign are out of order. A few days ago it read Lathusområdet (‘Lazy House’ rather than ‘Slaughter House’).

“The trucks are so tall that they regularly knock out a few of the letters,” Comstedt said.

“But we are definitely keeping the sign because it’s so appealing.”

Many of the businesses are staying, but there is talk of moving a cluster of key food establishments to an area further south in Farsta.

Many of the buildings inside the sprawling area will be deemed historic landmarks (K-märkt) and kept intact.

City hall is hoping to add more than 3,000 apartments in the area, said Comstedt, but there is as yet no word on how many will be cooperative flats (bostadsrätter) and what portion will be allocated to the rental market (hyresrätter).

“If everything moves forward without any hiccups, we hope to have our plan for the area ready by late 2015,” Comstedt told The Local.

“The earliest we’ll start building is 2016.”

Ann Törnkvist

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PROPERTY

These are our readers’ top tips for buying a property in Sweden

Buying an apartment or house in Sweden can be a daunting process, but with rentals so hard to get, many foreigners end up taking the plunge. Here are the top tips from readers who have done it.

These are our readers' top tips for buying a property in Sweden

Get prepared! 

Most of the respondents to our survey stressed the importance of preparation. 

“Spend time on defining your requirements properly, including visits to different locations to narrow down your search,” advised Julian, a Brit living in Malmö. 

As well as working out your requirements, other participants argued, you should also get to grips with the way the bidding system works in Sweden, with one British woman recommending buyers “speak to professionals about the buying procedure”. One respondent went so far as to recommend hiring a buyers’ agent, something international employers sometimes provide for senior executives moving to Sweden. 

Elizabeth, a 26-year-old charity worker from South America, recommended that all buyers “learn to read a bostadsrättsförening årsredovisning”, the finance report for a cooperative housing block. (You can find The Local’s guide here.) 

Get to know the market 

Maja, an anthropologist from Hungary, said it was important to take time to get a feel for the market, suggesting buyers visit different areas to find the one that they like. 

“It will take 6-12 months easily,” she predicts. “Don’t rush. Visit the neighborhoods where you are thinking of buying.”
 
Others recommended spending time surfing Sweden’s two main housing websites, Hemnet and Booli, to get a better feel for how much different types of housing in different areas typically sell for, before starting to look seriously yourself, with one even recommending going to viewings before you have any intention of buying.  
 
“Start visiting houses and monitoring bids. That will give you a sense of the process,” recommends Shubham, 31, a software engineer from India.
 

 
Think about your expectations
 
While house prices have soared in Sweden’s cities over the past decade, the same is not the case in all rural areas, something some respondents thought buyers should take advantage of. “To buy a house at a lesser price, look at areas as far from urban areas as is possible for you and your family,” wrote Simon, a 61-year-old living in rural Sweden. 
 
Julian warned bidders against areas and types of homes that “will attract tens of ‘barnfamiljer’ (families with children), meaning “bidding wars will result”, pushing up the price. 
 
On the other hand, one respondent warned people to “avoid buying apartments in vulnerable areas, even though prices will be lower there”. 
 
An Italian buyer recommended looking at newly built apartments coming up for sale. 
 
 
Get a mortgage offer before your first serious viewing 
 
Getting a lånelöfte, literally “loan promise”, can be tricky for foreigners in Sweden, as our recent survey of banks’ policies showed. 
 
Shubham warned against applying for a loan promise from multiple banks, arguing that this can affect your credit rating if your finances are not otherwise good. He suggested using an umbrella site like Ordna Bolån and Lånekoll, although he warned that the payment they take from the ultimate mortgage provider might ultimately be taken from borrowers.  
 
READ ALSO: 
 
Get to know the estate agents, but don’t necessarily trust them 
 
Gaurav, a sales manager based in Stockholm, recommended getting to know local estate agents in the area where you are planning to buy, as they might be able to direct you towards owners who are in a hurry to sell. “Those can be the best deals as you have greater chances to avoid bidding on such properties,” he argued. 
 
Maja, from Hungary, warned, however, against believing that the estate agent is on the buyer’s side. 
 
“You cannot really make friends with them, they work for commission and they will also try to raise the selling price,” she said. “It’s how they present you to the seller that matters. Seem like a serious buyer.” 

 
Should you try to make an offer before bidding starts? 
 
Morgan, a 33-year-old marketing manager from France, said it was worth studying the kommande (coming soon) section on Hemnet and Booli to spot houses and flats before they are formally put on the market. “Be alert. Book an appointment asap and get a private visit to reduce competition. If the apartment is what you’re looking for, make a reasonable offer with a condition to sign the contract in the next 24 hours,” he recommends. “You will cut the bidding frenzy and save money.”
 
Gaurav also recommended getting a private viewing and making an offer while the property was still off the market, as did Julian. 
 
“If you are lucky, you might find owners who are in a hurry to sell,” Julian said. “Those can be the best deals as you have greater chances to avoid bidding on such properties.” 
 
But other foreigners warned against bidding before a property is publicly put up for sale on housing websites, arguing that estate agents used this as a way of getting higher prices than they would expect to get at auction.  
 
“You are essentially negotiating directly with the owner, without finding out the actual market price via bidding,” argued a 31-year-old Indian business analyst. “Usually this will work only for an apartment not in top condition.” 
 
What to watch out for in the bidding process 
 
Morgan advised buyers to take what estate agents say about rival bidders with a pinch of salt. 
 
“Estate agents will play the competition card. Don’t fall for their trick and keep a cool head. Ask yourself if it really worth it before increasing a bid,” he wrote. 
 
In Sweden, it is possible to make a hidden bid, which is not disclosed to other bidders. One Indian software developer warned that estate agents would often claim that there was such a bid to pressure you. 
 
“The hidden bids are really confusing as you don’t know the bid placed,” he said. “It’s a trap to get higher bids. “
 
A 21-year-old Romanian agreed it was important to watch out for estate agents who try to rush or panic you. 
 
“[Look out for] those that try to rush you into it by saying stuff like ‘this will be gone by Monday, the owner wants to sell fast’, or if they don’t want to include a two-week period to have the property inspected as a clause in the contract,” she said. 
 
Maja recommended choosing an estate agency that required all bidders to supply their personal number, with all bids made public, “because other agencies might cheat that price rise”. 
 
“Don’t be the first bidder,” she added. “Keep your cool, and if the agent calls or messages, just hold on. There is no official end to the bidding. Only when you sign the contract. So the best game is to seem very serious but not stupid. You have a budget, and try to sign the contract the same day or the next if you are the highest bidder.” 
 
Is now a good time to buy? 
 
The respondents were, predictably, divided. 
 
“It’s risky for both sellers and buyers,” said Carl, a Swede who recently returned home from China. “The market seems to correlate pretty well with central banks raising interest rates. If that’s the case, then it’s still a sellers’ market since central bank [Riksbank] will continue to increase interest rates until 2024.” 
 
“It’s difficult to predict anything at the moment,” agreed Gaurav. “Prices should fall a bit but that’s not happening in all the areas. Avoid buying or selling if you can for a few months.” 
 
“I see there is no difference in buying in total cost. You can get a property at a lower price but end up paying more in interest and the price is the same in five to ten years,” said one Indian software engineer. “Buying is still better than renting.”

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