After a period of falling prices driven by increased interest rates, the Swedish housing market is seeing a rebound, particularly in the biggest cities.
However, it’s also taking longer to finalise home sales.
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Recent data from Swedish property listings site Hemnet indicates that while home sales – and housing prices – are on the rise, the time to complete transactions has notably increased.
For instance, the average sale time for an apartment in Sweden increased to 27 days in the first half of the year, up from 22 days during the same period last year. Similarly, houses now take an average of 31 days to sell, compared to 30 days previously.
The slowest market is in the Gävleborg region, where it takes an average of 44 days to sell a home. The fastest transactions occur in Stockholm, with apartments selling in just 16 days and detached homes in 23 days.
This variation in market activity across the country calls for a deeper look into where the best opportunities might lie for homebuyers this summer.
Renewed market confidence in Sweden’s biggest cities
The confidence in the Swedish property market is on its way up in Stockholm, Gothenburg, and Malmö, Erik Holmberg, a market analyst at Hemnet, told The Local.
“I would say that we have seen a weaker market in the last couple of years, almost everywhere in the country, since the Swedish central bank started to increase the interest policy rate, which affected the market a lot,” he said.
“But in the last half of the year or rather in the last year, the confidence has come back in bigger cities – in Stockholm, Gothenburg, Malmö… When we look at price developments last year, in three of Sweden’s biggest cities, we see prices increasing again.”
However, the analyst warned that the opposite is currently true in other areas of the country, which have seen a continued decrease in market activity and flatter developments in the same time interval.
A new trend emerging in Stockholm?
As Hemnet’s analyst explained, in Sweden, housing market trends usually start in Stockholm, when the market begins to change, causing a ripple effect.
“And that’s what we have seen. Now, market activity and prices are increasing again in the bigger cities. Usually, when the market changes, other areas in the country follow, and that could be the case now,” said Holmberg.
“When the rates and inflation situation become clearer, other parts of the country might follow the market in the big cities. Our main scenario is that we will see this spread,” he said, adding that prices in Stockholm have picked up quite fast in the last year but that the demand is still affected by the high interest rates.
“I wouldn’t be surprised if we saw swift price developments in some areas with the highest demand, such as city centres.”
The effect on the rental market
Another aspect to consider is the rental market, which could see significant changes in the short to mid-term.
Holmberg pointed out that properties which fail to sell might enter the rental market.
“What we’ve seen is that it’s harder to sell properties today, so, probably, more people who own homes and can’t sell them will put these unsold homes on the market for a while. This could affect the supply of apartments for rent and, in turn, prices,” the analyst said.
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What different types of homebuyers should know
For buyers, the current market presents a mixed bag.
“In Sweden, we often talk of having a seller’s or buyer’s market. Today, it’s good for buyers that they have a lot to choose from; there’s a record-high supply almost everywhere in the country. That means it’s easy to find something,” said Holmberg.
However, he also cautioned that the slow market makes agreeing on terms with sellers challenging, with sales times at record highs.
“Sales take some time in today’s market, and that’s important to understand for both sellers and buyers, especially for homeowners who are changing homes, meaning they’re both buying and selling something; it’s a tough market for them.
“Today, this group often chooses to sell their home before they buy something new. That makes up a big part of record high sales times; we have people waiting for the right bid before moving from the selling to the buying side…” Holmberg said, noting that the market is different compared to two to three years ago when it was “very hot”.
“So, remember that even if prices grow, it’s still a tough or slow market.”
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On the other hand, first-time buyers might find a silver lining in the form of lower prices compared to a couple of years ago, making it a potentially favourable time to enter the Swedish housing market.
“First-time buyers are in another situation, which may be better because the prices are lower than two years ago, of course, and if you’re just buying something, you don’t need to worry about the selling part,” Holmberg told The Local.
“That’s why this could be a good situation to enter the housing market this summer, but even so, despite supply being really high, it could still be tough because many sellers have put down a listed price but don’t necessarily plan to sell at this price.”
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