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Last Updated: Mar 20, 2016

Sweden’s housing market continues to accelerate, fuelled by very low interest rates and a shortage of housing supply. The nationwide house price index surged 10.64% (10.1% inflation-adjusted) in 2015 compared to the previous year, higher than the rise of 6.86% in 2014 (6.64% inflation-adjusted), based on figures from Statistics Sweden - and the highest growth since 2007. House prices increased 2.4% (2.2% inflation-adjusted) in Q4 2015.

During 2015:
  • Greater Stockholm house prices rose by 13.6% (13.05% inflation-adjusted)
  • Greater Göteborg house prices increased by 11.76% (11.22% inflation-adjusted)
  • Greater Malmo house prices rose by 9% (8.47% inflation-adjusted)

Of the eight Riksområden (National Areas), RIKS1 Stockholm registered the biggest y-o-y increase of 13.7% (13.14% inflation-adjusted) in 2015, followed by RIKS8 Upper Norrland (13.58%) and RIKS2 Eastern Central Sweden (10.96%), RIKS7 Central Norrland (10.48%), and RIKS5 West Sweden (10.03%). Over the same period, strong house price increases were also seen in RIKS6 Northern Central Sweden (9.07%), RIKS3 Småland with the islands (7.69%), and RIKS4 South Sweden (6.5%).

Demand is rising, but only slightly. Home sales rose 1.17% in 2015, to 55,528 units, according to Statistics Sweden, a slowdown from average annual growth of 5.3% during the previous two years.

Sweden house pricesDuring 2015, the Swedish economy expanded strongly by 4.1%, up from annual growth rates of 2.3% in 2014 and 1.3% in 2013 and from a y-o-y contraction of 0.3%. The economy is expected to grow by 3.2% this year and by 2.9% next year, according to the European Commission.

The outlook for Sweden’s housing market is, however, mixed. House prices are expected to continue rising this year, amidst robust economic growth and ultra-low interest rates, according to local property experts. However, the Swedish central bank (the Sveriges Riksbank) and other economists are concerned that Sweden is now in an unsustainable property bubble that is ready to explode anytime.

Analysis of Sweden Residential Property Market »

Last Updated: Sep 30, 2011

Sweden houses for saleSwedish property yields are moderate. This year, we were unable to get yields figures because rents were hard to get in sufficient quantity to be reliable.  When we surveyed them last year, mid-sized central Stockholm apartments (80 to 120 sq. m.) had the most generous gross yields, at 6 to 7%.  Other sized properties seemed likely to have lower yields, at around 3 to 4%, and properties in suburban Stockholm also had relatively lower yields, at 3% to 5%, while apartments in the centre of the second-largest city of Gottenburg can yield around 5% to 7%.

Because rents are tied to the age of the property, the higher yields in the city-centre reflect partly the newer housing stock in those areas.

Generally, property prices in Stockholm vary in a range from €6,000 to €7,500 per square metre.

Round trip transaction costs on residential property are quite low in Sweden.  See our Sweden residential property transaction costs analysis and Transaction costs in Sweden compared to other countries in Europe

Read Rental Yields  »

Last Updated: Aug 01, 2016

Rental Income: Rental income is generally considered as business income and taxed at progressive rates. Income-generating expenses are deductible when computing the taxable income.

Capital Gains: Capital gains tax is levied at a general rate of 30%. Acquisition costs are deductible when computing the taxable gains.

Inheritance: Inheritance tax in Sweden has been abolished since January 2005.

Residents: Residents are taxed on their worldwide income at progressive rates.

Read Taxes and Costs  »

Last Updated: Aug 02, 2016

Closing costs range from 7.26% to 9.26%. The buyer pays stamp duty (4.25%) and registration fee of SEK825 (€96). The seller pays the real estate agent’s fee (3% - 5%). When the buyer and the seller reach an agreement, the former pays a deposit ranging from 2% to 10% of the purchase price.

Read Buying Guide  »

Last Updated: Nov 15, 2006

Swedish homes for saleSweden’s rental market is strongly pro-tenant. The system is enormously counter-productive. Eight per cent of the Swedish population is queueing for a new apartment, with an average waiting time of 10 years

Rents: Rents are set far below reasonable returns-on-investment. Rents are little influenced by location, so that metropolitan units are especially under priced. The system is enforced by Rent Tribunals.

Tenant Security: Tenants have a right to prolong their contract, essentially for ever. The rule is totally asymmetric; a tenant may at all times give 3 month’s notice, even if the contract is fixed for a given period, to terminate the agreement.

In September 2006 the Alliance for Sweden, a centre-right coalition headed by Moderate Party leader Fredrik Reinfeldt, unseated the Social Democrat Party of Goran Persson. Since then, the housing system has been high on the agenda. An ongoing state review of the system argues for the removal of the current rental ceiling, so that private housing companies and individuals could set market rents.

Read Landlord and Tenant  »

Last Updated: Mar 20, 2016

Sweden’s economic growth has beaten expectations

Sweden gdp inflationIn Q4 2015, the Swedish economy grew by 4.5% from a year earlier, far higher than the 3% growth forested by the central bank and the strongest pace in nearly five years, based on official statistics. During 2015, the economy expanded by 4.1%, up from annual growth rates of 2.3% in 2014 and 1.3% in 2013 and from a y-o-y contraction of 0.3%.

“Everything looks very good,” said Roger Josefsson of Danske Bank. “It’s a strong number and it’s welcome that exports were so strong as exports have been missing in the economic recovery since the financial crisis.”

This strong growth was mainly due to a surge in domestic demand caused by Riksbank’s record stimulus, in an effort to defend its inflation target of 2%. Moreover, the government’s efforts to accommodate the influx of immigrants from war-torn countries like Syria and Iraq are boosting public spending and economic growth. In addition, exports were strengthened by the fact that during the past three years, the Swedish krona (SEK) depreciated against the euro by almost 13%.

The economy is expected to expand further by 3.2% this year and by 2.9% next year, according to the European Commission.

The country’s budget deficit was around 1% of GDP in 2015, down from 1.7% of GDP in 2014, mainly due to rising tax income, according to the European Commission. The deficit is expected to increase slightly to 1.1% of GDP in 2016 and 1.2% of GDP in 2017.

Gross public debt stood at 44% of GDP last year, down slightly from 44.9% of GDP in 2014. The gross public debt is expected to fall to 43.1% in 2016 and to 42.3% in 2017.

Unemployment stood at 7.1% in December 2015, down from 7.8% in the same period last year. The jobless rate is expected to fall to 6.9% this year, and to 6.7% in 2017.

Consumer prices in Sweden rose by an annualized 1.6% in January 2016, an improvement from 0.6% in the same month last year, according to Statistics Sweden. Inflation is expected to be 1.1% this year and 1.7% in 2017, according to the European Commission.

  • Strong & stable economy
  • Low transaction costs
  • Moderate to low yields
  • Extremely pro-tenant market
  • High rental income tax
Price (sq.m): €6,991 For a 120 sq. m. property, usually an apartment.
Rental Yield: n.a. For a 120 sq. m. property, usually an apartment.
Rent/month: n.a. For a 120 sq. m. property.
Income Tax: n.a. Assumptions: Owners are a non-resident couple drawing US$ / €1,500 per month in rent, with no other local income.
Roundtrip Cost: 8.25% The total cost of buying and then reselling an apartment. Includes:

* all transaction taxes and charges:
* lawyers' and notaries' fees
* agents' fees

Assumptions: The buyers are non-resident foreigners. The apartment cost US$250,00 / €250,000.
Cap Gains Tax: 30.00% Assumptions: The property was bought for US$250,000 / €250,000, and sold 10 years later, after a 100% appreciation.
Landlord and Tenant Law: Strongly Pro-Tenant Rating is based on a detailed study of each country’s law and practice.

Baltics Real Estate Market Overview 2016 - Colliers InternationalPoland Residential Market Q2 2016 REAS
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