Nyhet -

​The Swedish residential market – are we seeing the start of a trend shift?

During the winter, the residential prices in the owner-occupied market in Stockholm has decreased, and anxiety over a potential housing bubble has been expressed in media as well as from international organizations. One of the reasons for this is that

  • Sweden has one of the highest nominal house prices to income ratio in the OECD, raising questions about the sustainability of the Swedish housing price development
  • A strict rent restriction system, however, with few counterparts in the world, coupled with high construction standards and regulations, means a strong demand will be channelled through the owner-occupied market. Therefore, a stronger price development is to be expected than in countries with market rent systems
  • Looking at future demand, Sweden has a low unemployment rate, a strong urbanization and a relatively strong purchasing power; this has historically led to price increases
  • Residential development has been prioritized by municipalities at the expense of commercial development in the last few years. Residential building rights has been highly sought-after and fetched a higher price in SEK/m² habitable gross area than commercial building rights. The municipalities have furthermore also been very good at collecting significant payments for their land sales. In Greater Stockholm area, the building rights in m² habitable gross area has risen with 280% since 2009. A pick-up in residential investments since 2013 onwards means the new supply of apartments are now coming to market
  • The current downturn in the market seems however to also be related to a credit squeeze from banks towards households. This in combination with the new government regulations for amortization of mortgages and a potential interest rate hike indicates a cooling of the market in the near term.

My conclusions:

A potential business opportunity is that distressed residential developers will – where it’s possible – convert projects with owner-occupied apartments into rental units, which could be of interest for any investor looking to increase their exposure to the stable Swedish rental housing market.

Want to know more? Please contact Amanda Welander amanda.welander@cbre.com
Head of Research, CBRE

You can follow Amanda on LinkedIn:
https://www.linkedin.com/in/amandawelander

Or on Twitter:
https://twitter.com/AAMWelander

This article was first published in Swedish on Apr 11th 2018. You can read it here: https://goo.gl/adc2Zv


Previously published articles - in Swedish:
Framtiden för Sale and Leasebacks efter införandet av IFRS 16. https://goo.gl/4Kcy5D
Investera i fastigheter – hur ser marknaden ut 2018? https://goo.gl/bBb1ei
CBRE publicerar rapporten Investor Intentions Survey https://goo.gl/cMvfgq

”Just nu är det fest” Amanda deltar i Fastighetsnytts Poddcast https://fastighetsnytt.se/podcast/just-nu-ar-det-fest/

Ämnen

  • Bygg, fastighet

Kategorier

  • real estate investments
  • cbre sweden - real estate - fastighetsrådgivaren
  • capital markets
  • cbre sweden research
  • swedish rental housing market
  • residental market
  • trend shift
  • owner-occupied apartments

Regioner

  • Stockholm

Kontakter

Yvonne Ehinger

Presskontakt Head of Marketing +46(0)73-3498701

Patrik Kallenvret

Presskontakt Managing Director, CBRE Sweden AB +46 (0)767-633 341

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