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Last Updated: Jan 04, 2017




Sweden’s house price rises are decelerating, thanks to the introduction of new amortization requirements in June 2016, the result of concerns by the Swedish central bank (the SverigesRiksbank) about Sweden's property bubble.

The nationwide house price index surged 8.7% (7.55% inflation-adjusted) during the year to end-Q3 2016, a slowdown from annual rises of 8.85% in Q2 2016, 10.47% in Q1 2016, 12.5% in Q4 2015, according to Statistics Sweden. House prices increased 3.42% (3.23% inflation-adjusted) in Q3 2016.

From June 1, 2016, mortgage loans over 50% of the value of the property have had to be amortized (i.e, paid back) at 1% every year, while loans worth 70%+ of the property's value must be amortized at 2% annually.

During the year to Q3 2016:
  • Greater Stockholm house prices rose by 7.5% (6.3% inflation-adjusted), almost half the 14.9% growth during the year to Q3 2015 and the lowest annual rise since Q4 2013
  • Greater Göteborg house prices increased by 6.3% (5.2% inflation-adjusted), a slowdown from a rise of 12.6% a year earlier
  • Greater Malmo house prices rose by 13.7% (12.5% inflation-adjusted), a upsurge from a rise of 7.2% a year earlier

Of the eight Riksområden (National Areas), RIKS4 South Sweden registered the biggest y-o-y increase of 13% (11.8% inflation-adjusted) during the year to Q3 2016, followed by RIKS3 Småland with the islands (12.6%) and RIKS6 Northern Central Sweden (11.4%). Over the same period, strong house price rises were also seen in RIKS7 Central Norrland (9.6%), RIKS2 Eastern Central Sweden (9%), RIKS1 Stockholm (7.5%), and RIKS5 West Sweden (7.1%). Surprisingly, RIKS8 Upper Norrland registered a house price decline of 1.3% (-2.3% inflation-adjusted) during the year to Q3 2016.

Home sales fell by 14% to 14,645 units during the year to Q3 2016, according to Statistics Sweden. Home sales had increased by 1.17% in 2015, after rises of 6.71% in 2014 and 3.83% in 2013.

Sweden house pricesDwelling starts rose by 10.9% to 12,506 units in Q3 2016 from a year earlier while dwelling completions fell by 30.2%, according to Statistics Sweden.

The Swedish economy is expected to grow by 3.4% this year and by 2.4% next year, according to the European Commission.In Q3 2016, the Swedish economy expanded by 2.8% from the same period last year, a slowdown from annual growth rates of 3.6% in Q2 2016, 4.2% in Q1 2016, and 4.7% in Q4 2015 and the slowest growth since Q3 2014.

Analysis of Sweden Residential Property Market »


RENTAL YIELDS
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  »



TAXES AND COSTS
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  »



BUYING GUIDE
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  »



LANDLORD AND TENANT
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  »



ECONOMIC GROWTH
Last Updated: Jan 04, 2017


Sweden’s economy has somewhat slowed

Sweden gdp inflation“The picture continues to be that Sweden is in an economic boom, but that growth is slowing down,” said Nordea analyst Andreas Wallstrom. “Private consumption, public consumption and investments surprised us on the downside, so the data was marginally weaker than we’d imagined.”

The Swedish economy expanded strongly by 4.2% in 2015, the highest growth in five years, 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 grow by 3.4% this year and by 2.4% next year, according to the European Commission.

The country has almost a balanced budget in 2015, from deficits of 1.6% of GDP in 2014, 1.4% of GDP in 2013, 0.9% in 2012, and 0.1% in 2011. 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 41.6% in 2016 and to 39.9% in 2017, according to the European Commission.

The jobless rate is expected to fall to 6.9% this year, and to 6.5% in 2017, based on government estimates.The country had an average unemployment rate of 7.2% from 2000 to 2015.

From just 0.7% last year, inflation is expected to be 1.1% this year and 1.6% 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
RESIDENTIAL PROPERTY FACTS
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 REASPoland Residential Market Q3 2016 REAS
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