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Meet the international entrepreneurs making Stockholm’s neighbourhoods vibrant

Stockholm is full of vibrant local communities. While the likes of Södermalm, Hornstull, and Aspudden have attracted much attention, you can find bustling little enclaves across the whole city, attracting young families, creative minds and new businesses.

Meet the international entrepreneurs making Stockholm's neighbourhoods vibrant
Martin Baxter (left) and his brother in Slow Hands café, Hägerstensåsen

What’s more, at the beating heart of many of these close-knit, local neighbourhoods are new ventures run by international entrepreneurs.

The Local spoke with two small business owners in Stockholm, originally from the UK and Italy but now based in Hägerstensåsen and Årsta, to find out more about life in their friendly suburbs, and how they’re quickly becoming pockets of international dynamism.

‘A fresh air of optimism’

“It’s just such a lovely, friendly area,” says Martin Baxter, the co-owner, with his twin brother Fran, of the Slow Hands café in Hägerstensåsen. “All our customers seem to have interesting lives and careers. And they’re all really friendly, not just with us, but also with each other. This area has such a nice community feel.”

There are many cafés in the surrounding suburbs, such as Aspudden, Midsommarkransen, and Telefonplan, but in Hägerstensåsen the brothers spotted an opportunity.

“There are lots of young families, lots of creative people, architects and so on, but there hadn’t been a great deal to do around there, so it felt like a really good place to set up a café before it became too established,” says Martin.

Learn more about life in Stockholm from internationals who live and work in the city

The brothers, who moved to Stockholm from St Helen’s in northern England five years ago “with just a couple of bags”, only use local suppliers for the food in their cafe.

“We’re making sure we buy from other local businesses – it costs more but the quality is much higher and customers really appreciate that the food is locally sourced. These days everyone wants to know where their food comes from, so we’re very clear about it. And most of these small business owners are, like us, not Swedish. It’s a really thriving community of international entrepreneurs.”

The cafe is also becoming a work hub for local freelancers. “Quite a few self-employed creative people come in here to work now. We make them feel really welcome and it just adds to the feel of a friendly, cooperative neighbourhood.”

Art on coffee latte. Photo: Getty Images

Martin is excited about the future. “The area at first felt like a bit of blank canvas. Lots of people were – and still are – moving in. But now it has this fresh air of optimism, with lots of families starting off their new lives in a new area – it feels like it’s going to be an exciting next few years. I think Hägerstensåsen is going to be unrecognisable in five years, but in a good way.”

But there has been one unintended consequence of the brothers’ success. “We’re looking to buy an apartment no more than five minutes’ walk away from the cafe, and, incredibly, we’ve seen that the estate agents have been using photographs of our cafe as a selling point for the area.”

“We might have shot ourselves in the foot by making the area more desirable,” Martin jokes. “We’ve helped increase property prices in the area before we’ve bought a place ourselves!”

‘No pressure to conform or be cool’

Barbara Caracciolo, the owner of Årsta’s Spigamadre, is originally from Rome and first came to Sweden 17 years ago to study a PhD in epidemiology at the Karolinska Institute, Sweden’s most prestigious medical research centre. But five years ago, she started to get itchy feet and switched from brains to bakery – quite a leap.

She opened Spigamadre four years ago, lives just a few minutes’ walk from her business and loves her life today, as well as the neighbourhood.

Sweet treats at Spigamadre in Årsta. Photo: Spigamadre

“I grew disengaged with research,” Barbara says. “Everything about my work was so slow. Writing a paper could take years and applications for funding could be quite stressful. I guess I am just not that patient. When I’m baking, I know right away if the bread is good or bad – I love that instantaneous gratification!”

Like Martin, Barbara says the friendly vibe in her local area helps to provide a good quality of life. 

“It’s very clean, orderly, and quiet with lots of nature,” she says. “Very lagom and very Swedish. The locals are friendly and laid back. You can wear sweatpants out for two months straight if you feel like it. There’s no pressure to conform or be cool.”

And, according to Barbara, Spigamadre has become a hub for a local community in Stockholm she had barely been aware of before. 

“Many people in the neighbourhood come to my shop,” she says. “When I worked as a researcher, I did not see much of my neighbours. I would leave home at 8am and often not be back until 8pm. I didn’t even know the people in my building until I started my bakery. Now I know many of them! And several of my customers and neighbours are asking me to expand the space so they can all meet here.”

Barbara Caracciolo at Spigamadre

Spigamadre has become a haven for the neighbourhood during the pandemic. “The bakery has become even busier during Covid. People didn’t want to venture very far afield, but they knew they could trust us. They know we offer very high quality food.”

Barbara’s business, like Martin’s cafe in Hägerstensåsen, has also a wider impact on the area beyond becoming a refuge and hub for her community. She’s also noticed local estate agents using pictures of Spigamadre to help sell Årsta, and hopes her success will encourage other non-Swedes to set up small businesses in the area.

“It’s quite funny that they’re using my business to promote the lure of Årsta but it also feels like a compliment,” she says. “We must be doing something right! The area is slowly becoming renowned as a foodies’ paradise with a number of different ethnic restaurants. Årsta is a great place to explore different cuisines!”

Interested in setting up your own business in Stockholm? Check out these guides to help you get your business off the ground and then learn more about life in the city with these insider tips 

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PROPERTY

EXPLAINED: Will Swedish housing prices plummet as interest rates rise?

The Swedish financial supervisory authority warned on Wednesday that rising interest rates could lead to house prices falling "quite sharply". How likely is it that this will happen?

EXPLAINED: Will Swedish housing prices plummet as interest rates rise?

What financial circumstances might make it difficult for borrowers to repay loans?

With an increase in the cost of living, including rising interest rates and rising electricity prices, there are plenty of circumstances that may make it difficult for borrowers – especially those holding large debts in relation to their income – to repay their mortgages.

Households with large debts are therefore more sensitive to an increase in interest rates, according to the Swedish financial supervisory authority, known in Swedish as Finansinspektionen (FI).

The agency published its annual Swedish Mortgage Market report on Wednesday.

“Large debts also mean a higher sensitivity if you were to suffer unemployment during an extensive recession,” said Henrik Braconier, the authority’s chief economist.

Other factors that could stretch borrowers’ finances include rising energy prices, higher food prices, and growing inflation.

“Apples, oranges, tomatoes have gone up by 30 percent,” said Américo Fernández, a household economist at SEB. “Wheat is coming from Ukraine and it’s getting harder and harder to get hold of.”

READ ALSO: 

Will homeowners become unable to repay their mortgage loans?

Not according to Fernández.

“One of the last things Swedish households will fail to make their payments on is their mortgage and their houses,” he said. “They would rather decrease their spending on vacations abroad, or restaurants.”

The FI report noted that most new mortgages include margins that allow for fluctuations in the borrower’s finances. This means that mortgage holders have a cushion that allows them to handle financial changes.

“Our stress test shows that they can handle increases in the interest rate and also loss of income,” said Magnus Karlsson, FI’s director of macroanalysis. “New mortgages have margins in them calculating discretionary income, and will be able to absorb increases in interest rates and loss of income.”

SEB foresees an interest rise of up to three percent over the next two years, Fernández said,an increase that can be absorbed by most households.

Both Fernández and Karlsson agreed that if homeowners have to cut back on spending, those cuts will not come from debt repayment, but from their disposable income – the money they might ordinarily spend on entertainment, eating out, or travelling.

So while household spending may have to change, financial stability is not at stake for most households.

What’s going on with the housing market?

Right now, a record number of mortgage-holders have loans that are worth more than 4.5 times their income. This year, more than 14 percent of new mortgagors took on such large loans, compared to 6.3 percent last year.

A “low interest rate, increase in housing prices, increase in disposable real income and a housing market that is not functioning well” are all factors in the large debts that homeowners have incurred today, Karlsson argued.

Fernández noted that there is an imbalance between the low supply of housing and the high demand for housing, which is in part responsible for the high housing prices we see today.

He said a decrease in price of a few percentage points would not be surprising: “We’re coming from two years of exaggerated prices.”

Will housing prices begin to decrease after two years of increasing prices?

Calculations for three different scenarios tested by FI show that housing prices will decrease, Karlsson said.

While the agency does not predict housing prices, its report shows that under three different scenarios – the first an increase in mortgage interest rate, the second an increase in energy prices, and the third a combination of the first two with a reversal to pre-pandemic housing preferences – prices will decrease.

The Local Sweden reported last year about increasing housing costs in Sweden, spurred on in part by a desire for bigger homes further away from urban areas during the COVID-19 pandemic.

Fernández called the two years of increasing housing costs “surprising.”

“10-12 percent two years in a row, that’s historical in these uncertain times,” he said, noting that prices were still increasing in figures for March this year.

What sorts of housing will see the largest price decrease?

The FI report also included various scenarios of how the price of different types of housing may fluctuate based on changes in the interest rate.

One scenario assumed a 1 percent increase in interest rates this year and a 0.5 percent increase next year, and predicted that while the price of apartments owned in a cooperative – called bostadsrätter – would fall only slightly, the price of detached houses would fall by 10 percent.

Another calculation that accounted for rising electricity prices and a decline in new housing purchases found that the price of bostadsrätter and detached houses risked falling by an average of 30 percent.

Is there a plan to let borrowers end their mortgage terms early?

“We believe it needs to be simpler and more inexpensive for households to repay their mortgages early,” FI Director General Erik Thedéen is quoted as saying in a press release published by the agency on Wednesday.

To that end, Thedéen said at a press conference that the agency had sent a request to the government to change the calculation model for how banks are compensated when mortgages are terminated early.

“When you terminate a loan agreement and the bank incurs costs, it must be reimbursed,” Thedéen said. “But at present the banks are overcompensated, that is what our calculations show. If the government follows our line and changes the model and follows our line, then the banks must simply adapt.”

When asked about the likelihood of this request being granted, FI recommended reaching out to the Ministry of Justice for comment.

What does this mean for foreigners in Sweden?

If you’re already a mortgage holder, then as Karlsson and Fernández assured, mortgage calculations include a cushion that allow for changes in your financial circumstances.

If homeownership is in your future, housing prices may begin to decrease in the near future, so it’s worth keeping an eye on your local real estate listings.

By Shandana Mufti

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