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RENTING

Five tricks Swedes use to avoid the long wait for rental apartments

The official waiting time for apartments in Stockholm, Gothenburg, and Malmö varies between three and eleven years. But Swedes have their own tricks for jumping the queue.

The old headquarters of the power company Vattenfall has been turned into rental apartments.
The old Stockholm headquarters of the power company Vattenfall has been turned into rental apartments. Photo: Tomas Oneborg/SvD/TT

There’s no requirement for landlords or renters to use the queuing systems run by the municipalities in the big cities, but most of the big ones do, the intention being to reduce corruption and increase fairness in the rental market. 

The Stockholm Housing Agency, or bostadsförmedlingen, has a queue between seven and eleven years long. Boplats Gothenburg has an average wait of 6.4 years, and Boplats Syd in Malmö has an average waiting time of nearly three years.

According to Kristina Wahlgren, a journalist at Hem & Hyra, Sweden’s leading rental property magazine, the system puts foreigners and recent arrivals to Sweden at a significant disadvantage. 

“It’s extremely difficult if you are from another country. You don’t have any contacts, and it’s quite difficult to understand if you haven’t grown up in this culture,” she says of the system. “There are some quite subtle aspects, and there’s vänskapskorruption [giving special advantage to friends]. ” 

Listen to a discussion about Swedish queue systems on Sweden in Focus, The Local’s podcast. 

Click HERE to listen to Sweden in Focus on Apple Podcasts, Spotify or Google Podcasts.

Obviously, the biggest advantage faced by locals in Sweden is that they normally joined the queue the moment they turned 17, so by the time they’re looking for an apartment as a young adult, they’re already near the front. 

But even for new arrivals in Sweden, it’s possible to wait a much shorter time if you know the tricks, says Wahlgren, who has been nominated for Sweden’s Guldspaden journalism prize for an investigation into how Malmö finds housing for homeless people. 

Kristina Wahlgren, a reporter for the Hem & Hyra newspaper. Photo: Hem & Hyra

1.  Apply for more expensive new-build apartments to start off with 

If you’ve got a good enough salary, and are willing to pay high rent for your first few years in Sweden, this can make it easier to get an apartment, as there is less competition for more expensive, new-build apartments, Wahlgren says.

“If you’re willing to pay high rent, then you can get an apartment within a couple of months [in Malmö]. If you want a cheaper apartment, it can take years. So it’s quite a big difference.”

2. Rather than wait for your perfect apartment, take what’s available and then swap 

The rules recently got a little stricter, but it’s still relatively easy to swap between apartments once you have a first-hand contract. There’s even a website, Lägenhetsbyte, which acts as an interface. 

This means, if you use the method above, and decide to rent a more expensive new-build apartment with a shorter queue, you can then downgrade to a cheaper apartment with someone who is after somewhere newer and swankier.

Rental queues are also shorter in less desirable areas of Sweden’s cities. For example, the waiting list in Norra Hissingen in Gothenburg is only five years, half what it is in Majorna. It can be quicker to make do with living in a relatively dreary area, and then swap with somewhere better, than to insist from the start on an apartment in your dream location. 

“If you can’t wait for the right department, just take the one that you get, then you can keep on looking and when you do have a lease, you can change the lease with someone else,” Wahlgren says. 

To change apartment, you need to have a so-called “acceptable reason”, such as needing a bigger or smaller apartment. With any luck, your landlord should accept the swap. If they refuse you can challenge their decision at your local hyresnämnden or “rental tribunal”.  

3. Use the tricks for contacting landlords directly  

Landlords in Sweden are not required to use the municipal rental queues to find their tenants, and if a suitable tenant presents themselves just as an apartment becomes free, they may prefer to take someone they know.

This is particularly the case with the smaller, private landlords. It’s possible to find lists of private landlords online, such as here. But Wahlgren recommends putting in a bit of legwork.

“One way to find who owns an apartment block, is to just go around and check on the buildings for the names of the landlords, and look in the stairwells for the number of the landlord’s agent.” 

Once you have the number, you have to ring both regularly, at least once a month, and also strategically. 

“It’s important to call at the right time,” Wahlgren says. “Because normally apartment rentals end at the turn of the month, so that’s when you’re going to call. You don’t call on the 15th, you call on the 31st or the 1st of the month.”

4. Exploit all the friends and contacts that you have 

When someone hands in their notice on a rental agreement, they may try to shorten their notice by finding a replacement for the landlord, or they might find a replacement simply as a favour. This is why it’s important to ask your friends and work colleagues if they know of any apartments becoming free. 

“If they use the municipal queue, they have to follow the rules. This way, they can choose their own tenants,” Wahlgren says of the appeal of this to landlords. “If you’re a nice person, you might be able to just talk your way into an apartment.” 

5. Be a student 

“If you’re a student, there are special housing companies in the university cities, different foundations that rent out apartments,” Wahlgren says. But then you have to study.” 

Illegal ways of getting an apartment

All of these ways of getting a rental apartment are legal, but there are some ways of getting a rental apartment more quickly which are not.

1. Paying a fee

You may also find landlords or intermediaries on websites such as Blocket, who ask for a one-off payment to jump a rental queue, or get a rental apartment. This is illegal. “You can lose your money, you can lose the apartment, and in the worst case, you can go to prison,” warns Wahlgren.

2. Getting an illegal subtenancy 

It’s perfectly legal to rent out your rental apartment to someone else for a period, if you have a valid reason for doing so and your landlord agrees. But such is the pressure to get housing that a market has sprung up in illegal subletting. Before signing a contract for a sublet, make sure that the landlord who owns the property has agreed to it. 

3. Bribing someone running the queue 

There have been cases of people working for municipalities logging into the housing queue and altering it, either as a favour to their friends, or for money. This is fairly rare, and in the unlikely event that someone offers to do this for you, it’s best to decline. 

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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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