A good year for Swedish salaries
Inflation during 2022 and 2023 ate up so much of Swedish salary rises that workers in Sweden ended up with around 10 percent less money in real terms, putting them back at the level seen in 2015.
Things changed for the better on the salary front last year, and experts are predicting this could continue into 2025.
In general, salary hikes in companies with a collective bargaining agreement are decided via the mark or märke.
Under the Swedish labour model, the industrial unions (IF Metall, Unionen, Sveriges ingenjörer, GS and Livs, which represent the metal, grocery, engineering and forestry industries, among others) are responsible for setting the benchmark for pay rises each time there’s a new collective bargaining agreement negotiating period.
This affects everyone with a collective bargaining agreement, whether they’re a member of one of these unions or not, as all of the other unions in Sweden will generally adopt the same figure when negotiating their pay rises with employer organisations.
This year, the industrial unions are asking for a 4.2 percent pay rise going into negotiations, which will be negotiated over the winter and finalised at the end of March. The final märke usually ends up at around 80 percent of what the unions originally asked for, so we can probably expect an average rise in salaries of about 3.3 percent. Swedbank economist Emma Paulsson told the TT newswire that they expect to see rises of 3.6 percent in 2025 and 2026.
CPI inflation is expected to be less than one percent in 2025, which means that Swedish workers will see a rise in real wages by almost three percent, Paulsson predicted.
Lower interest rates
Interest rates are also expected to drop further this year, with Swedbank predicting that the policy rate will hit 1.75 percent by summer, remaining at that level throughout 2026.
That’s 0.75 percentage points lower than the current rate, which was lowered to 2.50 percent by the Riksbank central bank at its most recent meeting just before Christmas.
The policy rate is the central bank’s main monetary policy tool. It decides which rates Swedish banks can deposit and borrow money from the Riksbank, which in turn affects the banks’ own interest rates on savings, loans and mortgages.
This doesn’t mean that actual interest rates on mortgages will be as low as 1.75 percent – Swedbank predicts the average variable rate across the major Swedish banks to hit 2.85 percent in June 2025, remaining at that level until the end of 2026.
In October this year, the average variable rate was just over 4 percent, so this is a significant cut that would save you thousands on your mortgage each year.
For people on fixed-term mortgages, rates aren’t predicted to get quite as low, with three-year fixed-term mortgages reaching 3.15 percent in June 2025, rising to 3.2 percent in December that year. For those who sign up for a five-year term, rates are expected to hit 3.2 percent in June, rising to 3.3 percent in December.
Could it become easier to get on the housing ladder?
A relaxation of the 85 percent mortgage cap is in the works, which would essentially see the minimum deposit for buying a property lowered from the current 15 percent to just 10 percent.
The proposal would also loosen rules on amortisation, or the amount of your mortgage you need to pay off each year. For certain groups, this would cut the amortisation requirement from 3 percent of the value of their mortgage to just one percent each year.
The goal of the proposal is essentially to make it easier to get onto the housing ladder, so it’s good news for internationals who have not been in the country as long as Swedes.
We don’t have many details about the specifics of this policy at the moment, but Sweden’s financial market minister, Niklas Wykman, said that there would be more details in spring 2025.
Higher property prices
Admittedly this is only a positive for people who already own property in Sweden, but lower interest rates and more accessible mortgages could mean that property prices start to rise again.
According to Swedbank’s latest economic outlook from November 2024, property prices could rise by more than 5 percent this year.
This is expected to continue into 2026, where the bank expects to see prices go up by as much as 6 or 7 percent.
Northern Lights
Getting the opportunity to see the Northern Lights is a major benefit of living in Sweden, although the further south you are the less chance you have of spotting them. If you were lucky enough to be somewhere with no cloud cover on New Year’s Eve, you may already have seen them this season.
Luckily for those living in Sweden or planning to visit this year, 2025 is set to be another great year for spotting the celestial phenomenon, as the sun is expected to be at a solar maximum this year.
A solar maximum means there are more areas on the surface of the sun with high magnetic activity, which in turn means there’s a higher chance of more frequent and more impressive displays of the Northern Lights this year than in previous years.
Luckily for those of us living in the south of the country, it also means that the lights may be visible at lower latitudes than usual, although areas within the Arctic Circle still have the best chance of being able to see them.
Bear in mind if you are planning a trip that some areas in the Arctic Circle have midnight sun in summer, where the sun doesn’t set for weeks on end. To maximise your chances, it’s best to visit in the winter, in more remote areas with less light pollution.
The long Swedish summer
Workers in Sweden are legally entitled to four weeks’ consecutive holiday in the summer months, with things shutting down across the country for most of July.
If you’re planning to spend the summer in Sweden, why not check out our readers’ top tips for a Swedish staycation?
For those of you who can’t wait until summer for more time off, this guide should give you some tips and tricks for making the most of Sweden’s public holidays to get more time off with fewer days of annual leave. Make sure you book your days off before your colleagues beat you to it!
Sweden’s delicious seasonal foods
The season of gingerbread and saffron buns may be over but there’s no need to despair. Living in Sweden, a new seasonal food is always around the corner, be that semla season in February, princess cake on the first Thursday in March, crayfish parties in August, cinnamon buns in October or foraging for mushrooms in autumn.
Sure, these highlights of the culinary calendar are the same every year, but that doesn’t mean they’re not worth looking forward to. Besides, who wants to eat saffron buns all year round anyway?
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