Will the autumn season of 2025 be an advantageous moment for property purchase in Sweden?
In July, a record 4,200 detached houses were sold in Sweden, marking a strong showing in the real estate market. However, property experts are keeping a close eye on the market's development in August, particularly the apartment sector.
Northern Sweden witnessed a rise in apartment prices, with a 2.3% increase from June to July. This trend, if it persists until the end of the year, would be an unusual development given the drop in interest rates and recovery of consumer purchasing power.
The SEB bank's property price indicator shows a stabilization rather than a new upswing in house price expectations. But the internal financial health of housing associations plays a significant role in determining apartment affordability and market value.
Housing associations in Sweden, known as bostadsrättsföreningar, primarily influence apartment pricing through their control of the building’s collective finances and regulations. These factors affect monthly fees and indirectly impact resale prices.
Buyers typically purchase the right to inhabit an apartment in a housing association, rather than owning the apartment outright. The association’s economic health plays a critical role in the apartment's overall cost.
To analyze the finances of a Swedish housing association before buying an apartment, consider the following tips:
- Review the association’s annual report and financial statements. Check liabilities, reserves, income sources, and expenditures. Large debts or planned expensive renovations may increase future fees.
- Examine the association’s maintenance plan. Confirm if major repairs or upgrades are imminent and how they are financed (via loans or fees).
- Evaluate the stability and trend of monthly fees. Rising fees can signal underlying financial or structural issues.
- Investigate any legal or regulatory issues. Ensure the association isn’t involved in disputes or facing compliance problems.
- Understand the share of each apartment in the association’s total debt. This will determine your proportional responsibility if the debt is restructured or increased.
- Seek the assistance of a real estate agent or legal adviser experienced in Swedish housing associations to interpret complex financial documents and governance structures accurately.
This approach helps gauge not only the current cost but potential future financial burdens indirectly embedded in the apartment price.
While Swedish housing associations differ from rental market dynamics, their internal financial health is a key determinant of apartment affordability and market value. Unlike some regulatory environments that may raise operating costs, housing associations’ management and debt levels are the main drivers of pricing in shared-ownership apartments in Sweden.
Swedish households, in general, expect property prices to rise in the coming year, with 48% predicting an increase. The cost of buying an apartment decreased more than normal from June to July, while the average cost of buying a detached house increased by 0.2%.
Based on SBAB's calculations, apartment prices for 2025 as a whole are expected to be 3% lower than the previous year. The average variable mortgage interest rate in Sweden dropped slightly to 2.83% in July. Skandiabanken currently has the lowest variable mortgage rate at 2.73%, while Ica-bank has the highest at 2.92%.
The decrease in apartment prices was most significant in the greater Stockholm and Gothenburg areas, with prices falling by 3.4% and 4% respectively. SBAB's economist, Robert Boije, suggests that delayed increases in monthly maintenance fees by housing associations could be a reason for the falling apartment prices. Hans Flink, a business development manager for Svensk Mäklarstatistik, attributes the increased sales to deferred demand due to inflation and high energy prices in 2022.
Just 13% of households expect homes to become cheaper. Despite the falling apartment prices, housing associations may still need to adjust fee prices upwards, according to Boije. Understanding the financial health of a housing association is crucial for potential buyers to make informed decisions about their apartment purchases.
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