Where to Look

For those residential purchasers whose objectives are purely financial Sweden’s largest cities,  Stockholm and Goteborg will be the first places to look.

The third largest city, Malmo, is a special case in that its employment problems have been significantly offset by the Oresund Bridge link to Copenhagen (where 10% of the city’s population go to work).

Research has shown a significant correlation between local immigration and property prices. Sweden’s population is expected to increase only slowly in the medium term but some areas of southern Sweden and the greater Stockholm area could see much larger increases.

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Recent newspaper reports in Sweden about private wealth have claimed that 20% of Swedes over 20 years of age are kronor millionaires ( 6.6 kronor = 1$) and this wealth is primarily (70%) vested in property, one of the reasons why Swedes have been getting wealthier recently. Although Stockholm’s OMX share index has risen by almost 40% since July 2006, the rise in house prices, at 9% in the last 12 months, has been impressive also. The average house price for the whole country is 1.7m kronor but it is almost double this amount in the capital – 3.2m kronor. The trend seems to be on the rise with a national average house price of 4% in the second quarter. The northern province of Vasternorrland has seen an enormous 11% increase in this period.

Off the cuff conclusions that could be drawn from this situation are that some Swedish investors may be realising their stock exchange profits and re-investing them in housing and that for younger Swedes it must as if the first few rungs of the property ladder are being knocked away. Unfortunately for them, Sweden has traditionally had a rigid, controlled market in rented accommodation as well.
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