Renting an apartment in Sweden and other advice on moving to and living in Sweden

First let me start out by saying this article is not designed to be critical. This is simply a guide to the realities of the Swedish rental market as I experienced them which in many ways is similar to the controlled markets of countries like the Czech republic. One thing above all should be stressed: There is an acute shortage of rental accomodation in Swedish cities and if you don't believe me then go to this swedish housing pressure group's website (their website address translates to 'I want to have somewhere to live now').

A recent article written by a Swede in Stockholm describes "moving every month, living illegally, and paying double the actual rent" in order to have somewhere to live. Many foreign students are attracted by the low cost of Swedish universities but are unaware of the housing crisis and many others blithely assume that such unpleasant things such as queues and cash payments belong in less 'civilised' parts of the world.

Sweden's rarely mentioned dark underbelly is the rental property market where large sums of cash change hands daily in exchange for rental contracts. Housing shortages are caused by three factors:
A. Rental levels and rent increases are tightly controlled
B. The rent for an apartment is based on it's 'use' above all else and not it's location. The word 'Use' in this context can usually be interpreted as the apartment's size. So an apartment will probably cost the same to rent whether it's in central Stockholm or a 1000 kms away in the middle of nowhere. Rents do tend to beslightly higher however for recently built or renovated apartments. The Swedish rental system gives little benefit to those that choose to rent in the countryside.
C. Renting can often be cheaper than buying an apartment

I want to stress that this article is aimed at fairly average income earners (a swedish postman earns about 13,500sek a month before tax). However any legal foreign resident has the same rights when it comes to renting so it doesn't have to necessarily cost more than a Swede would pay but you will have the same problems. An excellent free website to find something to rent anywhere in Sweden or to just look at costs is Blocket. I also want to add that finding a short term rental of a couple of months with a second-hand contract (see below) is not that difficult, it's long term rentals that are the problem. I would also recommend the Integrationsverket's book 'Information About Sweden' which discusses aspects of renting in English.

I moved to Sweden to work and lived in a company apartment for a month. When I started looking for a flat I got an uneasy feeling because I had a problem finding anything. I looked in the local paper's small ads and there was nothing. Eventually I found an ad that was in English that was accidentally in the wrong section. It was an English girl who placed the ad and I just happened to be the only one who spotted it. I went around and immediately said I would take the place because I was getting desperate. She was going away for 6 months and I could have a second hand contract.

This is where I started to understand what a second-hand contract was. Basically in Sweden there are two forms of rental contract. A first hand contract which the tenant takes out directly with the owner of the property gives the tenant a high level of security. They can be fairly sure that they can continue to live in the property. But first hand contracts are scarce because apartments in many cities are scarce (mostly the cities where you would want to live).

The second hand contract however is basically a sublet by someone who has a first hand contract and doesn't want to loose it. Maybe there are going away on holiday, maybe they are working somewhere else for a while but often they are moving with no intention of ever coming back. You come across Swedes all the time who will tell you about some first hand contract (or contracts) they have on the other side of the country for an apartment they haven't seen in years and which they have no intention of giving it up because.... well they are hard to get aren't they! And only the clinically insane would relinquish a first hand contract in Stockholm (without a substantial cash payment that is).

A first hand contract in a desirable location is so hard to get, people will make an illegal under the table payment to get them ranging from 10,000SEK to much much more. In Stockholm it might cost 150,000SEK in black money to get a central one room apartment. If you look at the adverts in the newspaper you will often see the word 'Hittel�n' and less frequently '�vertag' which is code for an under the table payment. To get around the illegality of this the outgoing tenant leaves somthing behind so that this could be pointed to as the reason for the payment if anyone investigates (which I've never heard of anyone doing). On Blocket.se you find grainy digital pictures of unremarkable washing machines and the blunt question: 'who will give me 30,000sek for my washing machine?'. Welcome to Sweden's massive black economy.

So you think a second hand contract is right for you, there is a standard second hand contract form you can buy from a bookshop that both parties can then fill stating things like duration and a 3 month notice period (invariably 3 months but I've heard of new-arrivals signing up for longer) . There is just one strange thing about this contract, it isn't legal unless the first hand contract holder first gets the permission of the apartment owner and in my personal experience this often isn't done. If you are told permission has been obtained you have to accept this verbally since the building's owner doesn't put it in writing. Maybe one solution is to ring up the owner and ask them if they know about the sublet though I've never heard of that being done. The owners seem to often regard the second hand contract as strictly a matter between you and the first hand holder and unfortunately you will find ultimately that you almost completely at the mercy of the first hand contract holder as I later found out.

After my six month contract expired I moved on to another second hand contract from a guy who was moving in with his girlfriend. I was told I would have at least 3 months so at the beginning of the second month I stupidly went on holiday for three weeks and I told my landlord when I would be back. When I returned there was termination of contract notice waiting for me which was dated 2 days after I left. It could have been put there an hour before I returned for all I know but I had just 10 days to find another aprtment. The message was clear: "I want you out". Ok, I could have taken the guy to court maybe but at what cost? And he had the spare keys to the apartment so could come in when he wants and had already done so while I was away.

I was getting desperate with only a few days to go so I took another second hand contract from a women who told me she was moving to her summer cottage for 3 months. Unfortunately she forgot to tell me that after I moved in she would also be dropping by whenever she felt like it. After coming home a few times and finding her sitting at the table I decided enough was enough and started looking again (I think she was interested in a some rent payments in a form other than money - a fantasy for some but I needed somewhere to live!). It also illustrates again that second hand contracts mean you don't have all the keys. Another important point is that a second-hand contract may mean you can't access the lockable storage space in the basement because the first hand contract holder has all their stuff in there. This can be a big problem because often you want to lock up things such as bicycles if there is no special cycle room (bicycle theft is rampant). I would say the second hand contract holder is often regarded more like a 'paying guest'.

To cut a long story short I found quite by chance quite a good first hand contract. What I did is put an ad in the paper saying "Nice englishman seeks apartment.....everything of interest". A guy rang me up who was in a hurry to move out because he had run out of money and he took me personally straightaway to the landlords office and introduced me as the person to take over the contract. The company was a small property management company so they made a decision there and then that I was the kind of guy they wanted as a tenant. Before this point however I got a lot of other calls and did a lot of looking.

First I went to the big property companies. All have websites where they list available properties with first hand contracts but I believe registering an interest this way is often waste of time. Because of the demand in Swedish cities there will be plenty of other people doing the same and the result is a lottery. Properties that you can get from them easily are properties that are due for renovation or demolition and they usually have cheap rents, but not that cheap. There are also apartments with no bath or shower which will still get snapped up. It also seemed that many people I met who had a great apartment 'knew' someone within a property company that had helped them out. As in any society with shortages and queues, knowing the right people can make life a lot easier.

One word of advice: if you are offered ANY affordable first hand contract in a half decent area, consider taking it. What you then have is a bargaining chip which you can use to swap for an apartment you really want. I only appreciate now that being in the game with any first hand contract is better than being outside with none.

Another problem I had was that I am not an employee but a self-employed consultant. One large property company insisted that I must be an employee to get an apartment even though I offered a three month bond. Bonds play no role in Swedish property. I was also asked sometimes to nominate a 'borgesman' (the swedish word for guarantor) which was not something I wanted to ask any friend to take on and besides I felt I didn't need one as money was no problem.

Another strange thing that happened was that I was rung up by a small property company who wanted to offer me a first hand contract. They checked me out and seemed happy and invited me to view the property. What I didn't know is that I was invited along with about 20 other people. It was an annoying waste of time and illustrated how property companies feel they can create a 'beauty contest' out of unwitting participants.

All of the above relates to a medium size town in Sweden whereas Stockholm is another more frightening story. In the capital renting second hand is quite usual and I believe that the average markup on Stockholm rental prices (ie. the difference between first and second hand contract) is about 40%. Also a third hand contract market is emerging.

Dagens Nyheter ran a series of articles in their autumn 2001 papers about the rental crisis in Stockholm. They stated that the current waiting list time for a first hand contract in inner city Stockholm is now 15 years. Many landlords are raising rents by finding excuses to do "much needed renovations" on kitchens and bathrooms when there is no reason for them to do so. The landlords can thereby get rid long term tenants and offer the apartments to the corporate market. It seems the only way to really move into the inner city quickly is to buy a 'bostadr�tt'. A 'bostadsr�tt' means you buy the apartment and can never be asked to leave. This sounds good and the prices can seem reasonable in less desirable areas however the strange thing is that you will still have to pay a monthly fee that may be only a little less than what you would pay in rent on a first hand contract.

So in conclusion my advice on renting is:

• Put an ad in the paper and see what comes up. You might get lucky.
• Don't live in Stockholm unless you've got a really good salary and a lot of patience.
• If you are an overseas student, don't expect any help from your university and be mentally galvanised for the accomodation jungle - it could have you in tears.
• If you have the right contacts in a property company, apartments can appear out of thin air.
• Bostadr�tt if you are desperate and cashed up
• If you've got the money and plan to stay awhile then buy don't rent.
• Expect to pay black money in Stockholm. Pay it in smaller cities only if you find something really great.
• If you are offered any first hand contract, take it, it's a bargaining chip.

Update on Swedish rental law - posted May 2003

A swede who wishes to remain anonymous sent in this comment on rental law:

I don't believe it to be entirely correct that a first contract holder giving permission for second hand rental "almost never happens". The companies who own apartments often make it clear on their websites that second hand rental will normally be approved with reasonable justification, such as an intent to study or work elsewhere for a limited period.

Also, second hand rental does provide reasonable protection if it's done formally with a written contract, which specifies notice time and such things. Also, if a second hand tenant charges too much (generally defined as more than around 10 % of the original first hand rent, or less if the apartment is not furnished), it's possible to get back the money by going to court -- more specifically, the rental court (hyresr�tten). One has to file a complaint within three months after moving out, in order to be able to get money back retroactively. Out of the big pool of second hand renters, very few go to the trouble of actually doing this, but when a case like this is brought to court the verdict is usually in favour of the second hand renter who is typically given the extra money back along with interest. I believe the court will also help with trying to get the two parties to come to a voluntary settlement before making a formal case out of it.

I can't vouch for the legal accuracy of the above but even if I were a native speaker, going to court is not an option I would countenance.

Update on Stockholm - posted August 2003

Dagens Nyheter reports that there are 85,246 people in the Stockholm housing queue and there have been 75 empty rental apartments to share around during the quarter (I'm not sure if the queue size includes all members of a queuing family). New construction for the quarter was 175 apartments but not a single one of those will be for rental.

Update on student accomodation in Sweden - posted September 2003

Dagens Nyheter report that Sweden needs 50,000 new places for student accomodation.
In Stockholm 22,541 queue for 8,856 places.
In Uppsala 28,746 queue for 7,749 places (the worst).
In Gothenberg 20,634 queue for 6,886 places.
In Lund 9,350 queue for 5,600 places (better than I expected).
No queue system in Umea (!) but DN say they lack 1,000 places.
In the next 3 years only 5,943 places are planned for construction.

Update on Stockholm rental prices - posted November 2003

Dagens Nyheter (Sunday 2nd Nov) report there are now 90,000 people in the Stockholm housing queue but few can afford to rent the new apartments being built. DN cite the Stockholm suburb of Hammarby where rental cost per square meter is 1,500 SEK and a one bedroom 77 m2 apartment costs nearly 10,000 sek per month. Moving in therefore requires a yearly income of at least 350,000 SEK but a third of the people queueing earn less than 200,000 SEK a year. No-one that finally got an apartment in Hammarby waited less than 3 years in the queue.

A student magazine Studentliv has ranked Swedish college towns according to attractiveness as places to study. Sundsval came top while Lund and Stockholm came almost bottom of the 39 town list.

Update on housing queue - posted April 2004

EKOT (Swedish radio news) report that the stockholm housing queue has now reached 100,000. Dagens Industri reports that nearly half of all swedes are prepared to pay black money to get an apartment.

Update on Lund and Malm� - posted August 2004

The free paper "Metro" (Metro Sk�ne edition 26th Aug) ran a large article on the student housing crisis with pictures of bewildered and dazed overseas students who couldn't understand why they had nowhere to live. Apparently Malm� is slightly better than Lund where, according to Metro the queuing time for housing is longer than it takes to complete most courses. There was also a picture of the pre-fab 'barrack' housing that they were using in Stockholm to solve the crisis - imagine a trailer park minus the wheels. (For Stockholm I could jokingly suggest that the best time to apply for student housing is at about age 11, when you start high school).

Update on tenancy law - posted September 2004

I received the following legal contribution from a lady called Lena about Swedish tenancy law:

As a second hand tenant/subletter you are in fact very much protected by the rental law. The tenant is considered the weaker party and has all the rights while the landlord cannot give notice prematurely or increase the rent during the tenancy.
1. Unless your lease agreement is less than 3 months, then the notification period is always 3 months.
2. If you have a lease that states a time period, i.e. 1 year then the tenant can give notice at any time with three months, while the landlord has to honour the lease throughout the entire period. So the tenant is more protected than the landlord. If you have an ongoing lease then the notification period is mutually 3 months and the one giving notice must make sure the other party has received the notification, traditionally done by recommended mail. (you didn't have to move out after your vacation).
3. A second hand tenant can never inherit a firsthand lease with or without payment under the table as the lease is a legal document between the 1 & 2nd hand renter not the 2nd hand renter and the landlord. Sometimes in smaller cities it's possible to ask the property owner if the lease can be transferred into the 2nd hand lesse's name, however it's not something the property owner has to agree to.
4. A leasehold can be kept it year after year if you have good reason for being elsewhere and subletting it. A good reason would be to study or work somewhere else, but also to try a live-in relationship and give it a go for a year or 2. So in fact the rules are generous toward leaseholders to let out the�r property second hand. It's important for the second hand lease holder to make sure that a permission has been issued or the leaseholder can loose his leasehold and the secondhand lease holder has to move fairly quickly.

Update on corruption and Stockholm - posted Nov 2004

SVD reports that about half the apartments in central Stockholm are now 'Bostadsr�tt' which means they are owned not rented. This reflects a massive trend as landlords seek to cash in on sky high sales prices. Result: less to rent in central stockholm.

Shorter queues in Stockholm! - posted Jan 2005

DN reports (12th Jan) that queue waiting times for an apartment in Stockholm have become shorter. The average waiting time for inner city stockholm is now only 11 years while it's down to 5 years for the rest of the city. Things are looking up!

Correction...longer queues in Stockholm! - posted May 2005

Dagens Nyheter (May 10th) reports that the student housing queue in Stockholm has now hit a new record of 30,000 people. Suprisingly there are 160 unoccupied student apartments for rent in places like Kista but the rent is over 4,000sek a month. According to the article most students want to pay no more than 3,500sek a month (it amazed me they can afford that much!). There are 73,000 students in stockholm but only 13,000 live in 'student' accomodation. Apparently the authorities want to do yet more research to 'study' the problem.

Stockholm is expensive...and cheap - posted June 2005

Dagens Industri (June 17th) reports that Stockholm is one of the most expensive cities when buying an apartment. Typical prices in central Stockholm are 36,000sek a square meter with prices going as high as 60,000 for the best. On the hand Stockholm has some of the lowest rents. Which explains perhaps why so many people are joining the rental queue.

Apartment prices skyrocket in Stockholm - posted September 2005

According to Svenska Dagbladet the cost of buying an apartment in Stockholm continues to skyrocket, increasing around 15% in the last 12 months. Per square meter prices are now: �stermalm 40,000, Vasagatan and Kungsholmen 37,000 and S�dermalm 34,000, sek. Despite Sweden being a huge, sparsely populated and beautiful country a large proporation of the population wants to be crammed into the increasingly expensive and congested capital. The government recently decided to move a number of departments out to the provinces with the result that virtually every one of the 3,0000 public-servants involved resigned rather than leave Stockholm.

Commercial rents in Stockholm - posted September 2005

If you want to know what commercial office space costs in Stockholm, here is a list of what goverment departments pay in rent per sq. meter and per month. Dagens Nyheter points out that 79 of 85 government departments have overpriced inner city offices and could save several hundreds of millions in tax-payers money if they moved out of the inner-city. Rents in places like Kista are half inner-city rents.

Bad news for young people in Stockholm - posted October 2005

SVD reports what everyone already knows: young people can't afford to live in Stockholm unless their parents are rich. A couple of new surveys report 1.Few new apartments 2.A comprehensive black market 3.A huge 2nd hand contract market and 4.Ever increasing pace of conversion to Bostadr�tt status. The only surprise is that anyone wastes money producing these reports since almost any renting Stockholmer riding the Tunnelbana could tell you what's going on.

Stockholm gets more expensive - posted October 2005

Just weeks after my last Stockholm apartment price update, Dagens Industri reports that Stockholm apartment prices have reached 40,000sek a square meter! DI compares this with other towns where the cost for a 30 square metre one room apartment is 435,000sek in Lund and in Uppsala 410,000sek.

Apartment price comparison - posted November 2005

SVD's new business site N24 had posted a survey of apartment purchase prices around Sweden and they found the price of an apartment in �stermalm, Stockholm can buy 155 apartments of similar size outside Kramfors (which is actually a very beautiful part of Sweden).

Jens of Sweden, the sad decline of Swedish business- posted November 2005

On another subject: a Swedish MP3 player import/distribution company 'Jens of Sweden' has gone bankrupt, but not, according to the media, before the owner Mr. Jens Nylander set up a new company in Switzerland called JOS and transferred the brand and 4 million kronor to it. The Swedish company then went bankrupt with debts of... 4 million and Mr Nylander continued on with business as usual with JOS. In other words he allegedly took 4 million of goods, made 4 million of sales, put the cash in a Swiss bank account and then went bankrupt leaving the suppliers with...nothing.

All this was reported by astonished jounalists who had previously feted him as the next Ingvar Kamprad. Furthermore Mr. Nylander allegedly had Swedish policeman (who are normally armed) turn up at a meeting when his upset Korean suppliers, Iops, came from Seoul to find out why they weren't being paid. Needless to say the Koreans were upset at armed police greeting them and told their disturbing tale to the press. How the police came to allegedly act as goons I don't know but my wild guess is that Mr Nylander told them he was being threatened by, well... 'foreigners'.

Mr Nylander and his business partner Cecilia Jan�s continue to enjoy a carefree existence in Sweden. It could be speculated they might be now wearing matching orange jumpsuits under the US legal system.

Footnote 2008: Mr Nylander has started a new company to sell earphones called Jay whose losses were almost double its turnover in 2007 (it takes talent to create losses on that scale). A venture capital company called Creandum has apparently put a few million into it. DI asked Creandum if they weren't concerned about Mr Nylander's past and they replied that he was a 'talented entrepreneur'. It seems the people at Creandum aren't too bright. Footnote Early 2008: The tax office have found Mr. Nylander have been using company funds to pay a lawyer to defend him in a personal matter - and didn't delare it.

Student proverty in Stockholm - posted December 2005

An excellent newspaper article written by some Stockholm students bemoans the fact that they can't afford to take public transport because there is no fare rebate for students. They point out that the average student in Stockholm has 7,000sek a month to live on and the average student rent is 3,200sek (yes, it's that expensive!). They point out that it's also hard to find suitable part-time jobs in Stockholm and even then they often bring in only an extra 1000sek a month. Personally I've never understood why students don't get cheaper fares in Sweden, since this forces them to live closer to the university and therefore exacerbate the already acute housing shortage. At least there are no student fees in Sweden... yet!

Malm� and Landskrona, a tale of 2 cities - posted January 2006

The rental shortage in Malm� is becoming acute and more people are choosing to live in Landskrona instead. A recent arrival to Landskrona was interviewed in the local paper and said she was relieved to be able to get a firsthand contract there for a rent of 7,500sek after renting second hand for so long in Malm�. What shocked me was she couldn't find anything for 7,500 in Malm�. Pretty city that Landskrona is, it has a certain 'reputation' which can be illustrated by 2 incidents reported in the press. Some months ago in Landskrona there was an unexpected 2 hour evening power outage which coincided with a very heavy fog. Some doughty citizens siezed this brief opportunity to break into and loot some city-centre shops (anarchy might indeed be just one gunshot away). The second incident is a more recent story of an 85 year old women who tripped and fell on a pavement near the city-center. Witnesses saw a passing Landskrona samaritan stop his car and assumed she would be helped. The good samaritan however only stopped to take the cash from her handbag before driving off again.

The cost of 'buying' a Stockholm rental contract - posted January 2006

An article in N24 reports that the black-money paid for rental contracts in Stockolm amounts to around 1.2 Billion kronor per year. An estimated 4,000 rental contracts are 'sold' each year and half of those are in the inner city. The under-the-table payments now range from 3,000 to 5,000 SEK per square meter and now even even the landlords themselves are taking illegal payments for apartments, which was the case with landlord Rolf Moberg who took between 80 to 120,000sek from would-be tenants.

Housing queues are everywhere - posted Feb 2006

It seems that any swedish population center, that is a town that has basic amenities such as hospital, library, train station, airport (ie. over population 40,000) has a housing queue. Take the case of �stersund which suffers from high unemployment (the government is the major employer) and which also has some of the cheapest property prices in Sweden. The queueing time for rental accomodation owned by the kommun in �stersund is over one year with some 250 applicants for every city apartment. Smaller �rnskoldsvik has a queuing time which is only slightly less. Sundsvall also has big problems (I personally loathe Sundsvall because there is no public transport to the airport and the taxi drivers will try and charge more for a ride into the city than the price of the ticket to fly there in the first place - fly to �stersund, it's a nicer place).

Amazing queues in Helsingborg - posted Mar 2006

Helsingborg just released a new 'transparent' queue system which show how many people are applying for each apartment and how long they have been on the queue. For the best areas of Helsingborg the successful applicants have been on the queue about 21 years. For the worst areas, about 7 years.

Beware of Stockholm real estate agents - posted Mar 2006

SVD reports that you should expect to pay 30% above the advertised price when buying a Stockholm apartment due to competition amongst buyers. Honest agents say that if they advertised a realistic price no-one would come to a showing. Also there have been many reports of agents using fake bids to raise prices.

Swedish apartment prices look set to soar as the new government scraps the income tax that is paid by the cooperatives that own apartment buildings. It looks like owner's monthly payments's will be 500 to 1000sek less. Meanwhile Helsingborg has overtaken Stockholm as the most expensive city for apartments in part fuelled by the Danes who are piling into Swedish real-estate.

The Bubble Gets Bigger - posted March 2007

There has been no let up in the explosion of Swedish home prices. Stockholm city apartments now cost on average 50,000SEK per square meter with some smaller inner city apartments fetching over a 100,000SEK per square meter. Outer Stockholm prices are about 25,000SEK/Sq Meter. Meanwhile, the new right wing government have removed all controls in Stockholm on turning communal apartment blocks into privately owned apartments and it's predicted that within a few years there won't be any communal owned 'hyresr�tt' apartments left in central Stockholm. A tenant with a first hand contract can double their money overnight by buying their apartment and turning it into a bostadsr�tt.

Prices in some areas of Sweden are still affordable. Kramfors still boasts house prices of 350,000SEK although a job might be hard to come by despite the scenic views and bracing air (then again you've got about zero chance of being a victim of crime and they do have great tennis courts).

Apart from making the rich richer, there is now general disillusion with the new government. Nothing has been done for small business and the prime minister is rarely seen or heard from (in contrast to Carl 'Dick Cheney' Bildt, who is hard to avoid in the media).

The Goverment Blows Into The Bubble - posted April 2007

In an extraordinary move, the right wing government is scrapping property tax to make Sweden one of the few developed nations with no such tax. Experts and even the real estate industry have questioned the move since it simply gives more money to people who don't need it and will make the property bubble even bigger. Swedish wealth tax has also been scrapped.

The Copenhagen bubble has perhaps burst with apartment prices there losing some 5% in recent months.

Still Going Up! - posted May 2007

According to Dagens Nyheter bostadsr�tt prices have gone up 21% in the last year and house prices 11% in large Swedish cities, with Stockholm inner city apartment prices just nudging 53,000SEK per square meter.

Infact an aticle in Dagens Industri puts the real price of apartments as 10% higher because apartment buildings are owned by a corporation which the residents have a share in and these companies usually have significant debts. These debts are something buyers rarely consider in the price which is a mistake according to DI.

And Up! - posted June 2007

I can't type fast enough to keep up with this property market! The average bostadsr�tt (apartment) price has risen 25% in the last year across the whole of Sweden and central Stockholm prices are now within a whisker of 60,000sek a square meter. The Swedish central bank seems to be emerging from years of denial and are starting to suggest the property market might be a little inflated. Meanwhile inflation and interest rates look like they are on the way up which seems to be pretty much what's happening around the world. (Oh..and by the way: don't get internet access from bredbandsbolaget, I just changed to it and it sucks - I should have stuck with telia).

New Type of Apartment! - posted July 2007

The goverment has hit on the idea of having a new type of apartment which has a legal framework very much like an apartment in England. You would own the apartment and your neighbours would have little say who lives there and what you do with it. They argue this will encourage investment in building. It will also create a property owning elite who rent to an underclass. Meanwhile the Reinfeld government becomes less popular than ever as swedes wake up to the fact that their country is being recontructed for the benefit of a Stockholm elite.

Prelude to a Meltdown - posted early August 2007

The Swedish reserve bank said the subprime crisis in the US can't happen in Sweden. At the same time the ratings agency Fitch released a league table of countries where house buyers are most indebted - Sweden was in 5th place. And anecdotely it seems that even most of my work colleagues have been buying houses in the last few months. Why? Well because they have to go up, right? Sorry, wrong. As the credit crunch sweeps across the world, it looks like Sweden is in line for a big correction like everybody else. I would predict Stockholm prices will fall 30 to 35% in the next 3 years. We have more or less reached the top.

I can't change the numbers fast enough! - posted middle August 2007

Apartment and house prices in the large cities have risen around 23% (Dagens Industri) in the last year and inner city Stockholm prices have now increased to around 55,000 SEK per square meter. The Malm� market is on fire as the Danes come acrosss the bridge and pile in. Now people from Swedish towns I've never heard of are boasting to me about their local house price appreciation and how it can only go higher. Oh dear...where have I heard this before? Oh yes, London 1988, I remember it well. Time to strap on your hardhat, buckle up, and wait for a cracking sound.

Cracks Appearing - posted September 2007

Dagens Industri published an article demonstrating the insanity of Swedish house prices. They listed all the cities in Sweden and how much income is needed to borrow the money to buy a house in those places. In Stockholm which was of course in first place, an income of just under a million kronor is needed and much smaller Helsingborg (because of all the Danish speculators) followed in second place. And meanwhile in Denmark the Danish version of the subprime crisis has taken hold with a great many recent house buyers around Copenhagen submerging in negative equity as Danish house prices start their long overdue descent.

Cracks getting bigger - Posted October 2007

As predicted the market is now pointing downwards. Auctions in Stockholm have almost ceased and buyers have started advertising the price they want. Copenhagen is well on a downward spiral now and it is almost certain this trend will infect the Swedish market. Swedish building starts are still at highs but that's a lagging indicator.

We're sinking! - Posted November 2007

This picture taken from the top of the Dagens Nyheter website on November 12th pretty much explains the article that accompanied it.

No one wants to sell - Posted December 2007

It's the familiar pattern now of sellers who don't want to admit the sad folly of their investments and buyers who are waiting for them to admit that folly. Stockholm apartments have now declined at least 10% in recent months but if no one wants to sell then there's little trading and therefore no real market to determine the "real" price. More shocking is Copenhagen where, according to Dagens Industri, there are around 12,000 apartments which lie empty because their owners are hoping for better times. In a capital city with a supposedly acute housing shortage, that's a disgrace.

This is getting serious - Posted January 2008

Predictably things only get worse but now it's starting to look like a subprime-like crisis. In Copenhagen property prices are expected to fall another 5 to 10% before they stabilize. That will make an 80 square meter apartment about 2 million danish kronor in the capital city but if you ask me that still seems way too high.

The Stockholm rich get greedier - Posted February 2008

The "Paulinska Donationsfond", a charitable trust set up in 1789 to help female orphans and widows, happens to own a very desirable apartment building in Stockholm's Gamla stan. Unfortunately the rich tenants in the building think they should be able to force the trust into selling the building to them for a knock down price. Luckily the law is on the trust's side but the greed of the tenants knows no bounds as they hire the best legal brains to make sure the widows and orphans suffer. At the head of this effort is the founder of a recently floated clothing label called "Odd Molly". His name is Christer Andersson and he is also one of the people who sold their Odd Molly stock shortly after it was listed even though they weren't allowed to for a year - apparently the lawyers found a way around that too. (source: Dagens Industri)

Up or Down? - Posted March 2008

No, there's no price crash. Quite the opposite according to the real estate agents trade body, prices are still going up. But consider a recent article in the free Metro news-sheet about a 29 year old single guy in Gothenberg. He had bought his 42 square meter bostadsr�tt apartment and was paying over 9,000sek a month in mortgage repayments plus the monthly service fee making a total of 12,000sek a month on a take home salary of just over 20,000sek. And he was really happy with his purchase even though he was paying more than half his income to live in a small box.

Meanwhile the central bank insists there is no sub-prime problem in Sweden, mortgage lending has been done prudently. As long as people who are paying half their salaries to maintain their mortagage have jobs then yes, I suppose it is prudent.

Location, location, location - Posted April 2008

The right-wing government has put forward a proposal to revamp the whole renting system so that apartment rents will be determined by location instead of just "usage". Research shows that this will triple rents in central Stockholm (average rentals for a 2 room apt. will increase by over 8,000sek) and more or less double rents in the middle of other cities. In other words they want to 'ghettoize' cities so the poor live where the ruling elite think they should live - in the worst areas. If the social democrats don't return to power in the next election then this will probably become a reality and Stockholm may lose its housing queues but will also start to resemble almost every other city in the world - segregated.

Everything this government does or thinks seems to favour the rich elites in Sweden. They continue to do absolutely nothing for small business which is the greatest of lost opportunities. They also pay scant regard to the regions. The previous prime minister was a regular vistor at meetings held by the Gothenberg chamber of commerce. This fine collection of the southwest's industry captains decided to tell Sweden how shocked they were when the current incumbent said he wasn't interested in making the trip.

Sell, sell, sell - Posted May 2008

No-one's talking about a house price collapse but the signs seem ominous. Never before have so many properties been for sale in Sweden but it seems that it's houses that are the problem. Apartments are keeping their value, especially in central Stockholm. The market in Sk�ne seems worst effected, probably because it's being infected by the property problems in Denmark. As in the UK, mortgage conditions are getting tougher and the Swedish banks look set to be hit by the collapsing baltic economies and possibly also tarred with the Icelandic brush as that country tries to fight off economic armageddon.

Poised at the edge - Posted June 2008

Sweden's first gated community has just opened its doors in Malm� which indicates A). the rich are segregating themselves, just as they do in South Africa or Brazil and B). there's more poor people who want what they've got. At the same time, Denmark is officially in recession, the central bank will continue to raise interest rates and the amount of property for sale is hitting record after record. On the plus side, unemployment seems stable but the share market is down one quarter on the year. And the future...well look at this house price graph for an answer:

Collapsing Danish Banks - Posted July 2008

Roskilde Bank A/S, a 127 year old Danish bank that made huge profits in the property boom from real estate lending, has had to be rescued from collapse by the government and the other Danish banks. Mirroring the impending collapse of the Bradford and Bingley Bank in the UK, this is the second bank rescue needed in Denmark because of the collapsing property market. Similar banking problems in Sweden can't be far behind.

Second Hand Contract Holders Can Stay as Long as They Like! - Posted July 2008

I have heard of this but here is proof in this SVD article that second hand contract holders can have the right to remain in an apartment. A gentleman in Malm� hired out his apartment for 6 months on a second hand contract to some strangers he found through an advertisement but his new tenants refused to let him back in the apartment when the 6 months were up (I assume they changed the locks or already had all the keys). The new tenants subsequently got the legal right to remain (along with his furniture) because the court said that if the second hand contract holder was there with the full knowledge of the owner (in this case Akelius) and they were paying the rent directly to the landlord then there can be said to be an agreement in existence between them and the owner. Even Akelius were powerless to act to evict the new tenants. This must make anyone who has a second hand contract on a nice apartment very happy and the first hand contract holder very nervous.

The Big Stockholm Rip-off - Posted August 2008

According to SVD, someone advertised a second hand contract on an internet property site for an apartment in a desirable part of Stockholm and many desperate people transferred a deposit of 6,0000 sek straight away to a bank account to secure the contract without seeing the apartment. Some even paid double that amount. The only problem was that the people who lived in the apartment and had the first hand contract had nothing to do with this. The person behind the swindle is still at large but the police say that they expect as many as 50 people may have been ripped off. (Do the math, 300,000sek!) The police also commented (perhaps while yawning) that this usually happens in the late summer when many students are trying to find a place to live. Meanwhile the real residents of the apartment have been receiving notices of a change of address for all the people who think they are about to move in as well as dealing with others bursting into tears when they discover they have become both homeless and a lot poorer. This really is a sad story but illustrates just how desperate the Stockholm housing jungle makes people.

Let's Go To Arjeplog! - Posted August 2008

Arjeplog, a small town in the north of Sweden, situated in pristine country with the mountains as a backdrop, needs YOU! So worried is the town about the declining population that it is offering a tax-free 25,000 SEK to anyone that comes and stays for a year. That's 100,000 kronor for a family of four. What better offer could there be? Lets face it, after walking around the Gamla Stan in Stockholm for an afternoon trying to avoid being pickpocketed, you begin to wonder what else Sweden has to offer and the answer is its fantastic wilderness and where better to appreciate that than in Arjeplog. Apparently, finding a place to live is no problem and there might even be a job connected with the town's famous car winter testing facility that is used by car manufacturers from around the world. But even if you didn't work for a year (assuming you had some spare cash) the winter sports possibilities would be endless and fresher air would be harder to find. (The nearest airport is Arvidsjaur by the way).

Swedish Summer Site Hacking - Posted August 2008

The hacking community have woken up to the fact that most swedish internet servers are unmanned and unchecked during the summer months when most swedes go and live in their summer cottages for a couple of months. Such was the case with the people at Bokia who came back to their deserted office only to find their website delivering viruses to unsuspecting visitors. Luckily, the Google dangerous site warning service alerted some to the problem but it was only fixed when someone bothered to turn up at the office.

Oslo Has Gone Crazy! - Posted August 2008

The apartment rental market has gone crazy because of sinking real estate prices and higher interest rates. You can expect to pay at least double what you would pay in Stockholm to rent in Oslo with a 2 room apartment renting for about 12,000sek.

Meanwhile, a total collapse of sales and new builds has been reported, particularly in Norway's south-west but even so real-estate prices seem to have dropped only around 3.5%.

House Price Aramageddon is Apparently Here - Posted September 2008

For the last month now there have been conflicting reports about property prices. Dagens Industry seems now to have made up its mind and its opinion isn't pretty. In an article published September 21st they list property price drops of a whopping 80% for recently constructed houses in bad suburbs outside Stockholm and also for west coast holiday homes. In Vesteras, apartment prices have fallen by up to 60% and even in faraway Sundsvall apartments are selling for 50% less than the original asking price. These are stunning falls but they possibly reflect desperate sellers who don't want to wait anymore.

If these cases reflect the actual worth of Swedish real estate, I would be shorting the stocks of all Swedish banks because a lot of their borrowers now have a lot of negative equity.

Just One Bank Failure Away from Chaos - Posted October 2008

It's pretty certain now that Swedbank will fail soon if the world's financial and property markets don't improve. People I know have taken their money out of it because of the rumours and its management denies daily there is a problem. DI reports that inner city Stockholm apartment prices have fallen 13% since the start of the summer and in virtually the whole country, the last 2 years of property price appreciation have been erased. Only the desperate are selling and the buyers know it. Unemployment is gradually creeping up but no major industrial bankruptcies have yet occured. Small business bankruptcies however, are starting to rise above trend. the management is coming out with daily

Well, not yet - Posted January 2009

Sweden somehow survived the credit crisis without a single bank failure - so I was wrong. Swedbank continues to breath, indeed the economy as a whole is looking much better than say, the UK. But the property market is still somewhat frozen and sellers haven't got that desperate yet. Maybe this is a bottom but I suspect there will be worse in 2009. The barometers of prices seem fairly unreliable given how few transactions there are.

A new development is that bostadsr�tt owners can now get an income of 12,000 SEK on renting their property before paying tax compared with 4,000 previously. Not really a huge difference

Things are bad - or are they? February 2009

I can't tell you what's happening to Swedish residential real estate since no one really knows. The low interest rates make housing very affordable but no one seems very sure if house prices are in a downward spiral or not. One thing that I do know is that commercial office space rentals have collapsed as GDP collapsed with 16% in the last quarter of 2009. The krona is perhaps 20% undervalued at the moment so if you are an overseas buyer now is a great time to buy.

No they're not! March 2009

Apartment prices are now increasing by a couple of percentage points on a yearly basis! And house prices are looking good too! So mauch for the property crash in Sweden. But with mortgage rates at historic lows and big rental shortages in cities, it makes sense that many would look to buy. Asking prices haven't come down by much but the number of properties for sale is at all time highs which means the choice and the chance to negotiate is better. So what happened to the depression? I guess the Swedish unemployment safety net is making people feel they can take the chance to buy instead of rent. I predict inflation will increase as a result, or rather stagflation since unemployment is clearly rising at an alarming rate.

The bubble reinflates. April 2009

More confirmation that everyone is rushing to lock in the incredibly low mortgage rates. The Swedish central bank just lowered the base rate again to an all time low of 0.5% so money is almost free. Agents report hightened sales activity with the ask/bid spread decreasing. The Danes have followed suit with lowering their rates. This is either a housing bear market trap or a great time to buy.

Meanwhile, someone in Stockholm who had been renting second hand took the first hand contract holder to court when he the moved out. The court, the "Hyresnämnden", decided it was not right that someone had paid more than his neighbours in rent and awarded the plaintiff the difference in kronor between the rent he paid and what he would have paid as a first hand contract holder. BRILLIANT! So take on an outrageously priced second hand contract in Stockholm, find out what the other tenants are paying and after you move out, go to the Hyresnämden and get your money back - affordable second hand contracts in Stockholm are here!

Geocities will soon close - but don't worry I will continue this page as a blog!